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Jakarta, Indonesia

Purwanto W.W.,University of Indonesia | Muharam Y.,University of Indonesia | Pratama Y.W.,University of Indonesia | Hartono D.,University of Indonesia | And 2 more authors.
Journal of Natural Gas Science and Engineering | Year: 2016

Indonesia has been facing dramatic changes in natural gas industry development, which contributes to economic prosperity and reduces reliance on petroleum fuels. This paper reviews the current state of the natural gas industry in Indonesia, including reserves, supply and demand, infrastructure, pricing and regulation; discusses the outlook and path forward for the country's gas sector and identifies the barriers to and regulatory remedies for further development. The government has struggled to balance domestic demand with exports with respect to the country's natural resource management and to respond to sensitive issues involving changes in oil and gas law that aim to prioritize gas for domestic usage. Meanwhile, the speed of gas infrastructure development has been slow and gas production is declining due to aging gas fields without significant new gas production. The projection results show that the domestic gas demand will increase significantly, with gas demand in 2025 being approximately double to triple that in 2013. To fulfill that demand, Indonesia needs to attract substantive investment for future gas infrastructure and upstream gas exploration and exploitation of new gas fields. Systematic support and clear policy guidelines, legal clarity and certainty, good bureaucratic performance, and effective domestic gas pricing mechanisms are necessary to assure the successful expansion of gas utilization in the country, achieve a cleaner energy mix portfolio and assist in moving away from oil subsidies. © 2016 Elsevier B.V.

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