SKK Migas: Gas production prioritized for domestic needs - ANTARA News
Please see the above article in Antara News 14 August 2023 - Translated by Google below -

SKK Migas: Gas production prioritized for domestic needs

Monday, 14 August 2023 19:12 WIB

Jakarta (ANTARA) - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) is committed that natural gas production from oil and gas fields in Indonesia will be prioritized to meet domestic needs first.

"Regarding gas, including LNG (liquefied natural gas), the upstream oil and gas sector is committed to meeting domestic needs first," said Head of SKK Migas Dwi Soetjipto in his statement in Jakarta on Monday.

Indonesia is currently in a transition period towards the use of clean energy by launching a net zero emission (NZE) target in 2060. In line with this, the share of clean energy in the national energy mix continues to increase.

However, the use of energy sourced from fossil energy, such as oil and gas (oil and gas) will still be used. Until the NZE target is achieved in 2060, energy sourced from hydrocarbons, especially natural gas, still plays an important role as a support for national energy security.

SKK Migas noted that in terms of reserves, Indonesia's natural gas potential is still promising to meet domestic needs. Based on data from the Ministry of Energy and Mineral Resources (ESDM) as of May 2023, Indonesia's natural gas reserves reached 54.83 TCF. If gas field development projects go according to plan, Indonesia is expected to be able to meet domestic gas needs.

"After 2030, the upstream oil and gas industry's support capability to meet domestic gas needs will become stronger along with the completion of the Abadi Masela Project which is scheduled to be onstream in 2029," said Dwi.

Meanwhile, SKK Migas Deputy of Finance and Commercialization Kurnia Chairi revealed that gas production from oil and gas fields in Indonesia is still very possible to be utilized by the domestic market, including the industrial sector which has a major role in moving the wheels of the economy.

According to him, the guarantee of the availability of gas supply for industry, especially the processing industry, is one of the factors considered by investors before investing in an area or region in Indonesia.

"We will continue to encourage the domestic industry to be able to utilize our gas," Kurnia said.

Meanwhile, Country Head of Indonesia Rystad Energy Sofwan Hadi stated that there are still several challenges so that national gas production can be optimally absorbed by the domestic sector. Strengthening infrastructure capable of supporting gas processing, distribution, and receipt to the domestic market is still needed.

In addition, there is also a need for policies that support the development of gas fields so that natural gas needs during the energy transition period can be met.

"If investment in gas development, including supporting infrastructure, does not start now, at one point in the future, Indonesia can become a net importer of gas," Sofwan said.

Referring to the National Energy General Plan (RUEN), natural gas is mandated to be used optimally. This is because natural gas is seen as a fossil energy source that is relatively cleaner than petroleum. In the 2015-2050 energy mix target, the percentage Natural gas utilization is set to be at least 22 percent in 2025 and at least 24 percent in 2050.

Based on projections contained in the RUEN, gas demand in 2025 is estimated to reach 44.8 million tons of oil equivalent (MTOE). In 2050, the volume of gas demand is expected to increase to 113.9 MTOE. To meet these needs, natural gas supply of 89.5 MTOE or equivalent to 9,786.7 million standard cubic feet per day (MMSCFD) is needed in 2025 and 242.9 MTOE or equivalent to 27,013.1 MMSCFD in 2050.

In order to ensure the supply of energy sourced from natural gas, RUEN mandates a reduction in the portion of natural gas exports to less than 20 percent in 2025 and a halt to natural gas exports no later than 2026.

The mandate is carried out by ensuring the absorption of domestic gas production for integrated upstream-downstream industries, transportation, and other sectors. So far, natural gas produced by oil and gas fields in Indonesia has been absorbed by 65 percent for the domestic sector.