Indonesia\u2019s substantial gas resources and reserves have not been\nfully matched by their utilisation for domestic needs. The geographical\ngap between gas sources and demand centres, limited infrastructure,\nprice structures, and uncertainty over absorption remain challenges that\ndetermine the economic viability of gas project development.<\/p>\n
Oil and gas practitioner Benny Lubiantara said that optimising\ndomestic gas cannot rely solely on the availability of reserves. Field\ndevelopment requires infrastructure support and market certainty so that\ngas can be produced, distributed, and absorbed sustainably.<\/p>\n
\u201cThe drivers are the availability of infrastructure and the market,\nwhich will ultimately determine the economics of the project,\u201d Benny\nsaid on Tuesday (25\/8\/2026).<\/p>\n
According to him, this condition also influences the direction of\nglobal oil and gas exploration. Gas prospect development increasingly\nconsiders proximity to existing infrastructure or infrastructure that\ncan be built economically.<\/p>\n
Therefore, Benny said, an Infrastructure-Led Exploration approach\ncould be one strategy to accelerate the monetisation of gas discoveries.\nThis strategy is considered increasingly relevant for regions that have\ngas potential but are not yet supported by adequate infrastructure.<\/p>\n
\u201cTo encourage massive exploration, particularly in unexplored basins,\nfiscal breakthroughs and policies capable of improving project economics\nare needed,\u201d he said.<\/p>\n
Benny assessed that the fiscal aspect is not the only factor\ndetermining investment decisions. Ease of doing business, regulatory\ncertainty, infrastructure availability, and market prospects must also\nbe ensured simultaneously.<\/p>\n
On the other hand, domestic gas policy needs to maintain a balance\nbetween the interests of consumers and producers. Gas prices must be\ncompetitive for industrial users while still providing an adequate rate\nof return for producers and investors.<\/p>\n
\u201cWithout that balance, the development of new fields and\ninfrastructure investment risks being delayed,\u201d Benny said.<\/p>\n
Oil and gas practitioner and former Secretary General of the\nIndonesian Association of Petroleum Engineers (IATMI), Hadi Ismoyo, said\nanother issue that needs to be addressed promptly is the connectivity\nbetween production centres and demand centres.<\/p>\n
According to Hadi, gas infrastructure development must be designed as\na single supply chain that takes into account both supply availability\nand end-user needs.<\/p>\n
\u201cPipeline networks remain the backbone of gas distribution, but for\nareas where pipeline construction is not yet geographically or\neconomically feasible, CNG, mini LNG, LNG, and regasification facilities\ncan serve as alternatives,\u201d Hadi said.<\/p>\n
He stressed that these various infrastructure options cannot be\ndeveloped in isolation. Infrastructure must be integrated with gas\nsources and user markets to deliver optimal economic benefits.<\/p>\n
Beyond infrastructure, market certainty is also a critical factor.\nCertainty of buyers, absorption volumes, price formulas, and long-term\ncontracts are needed to provide a stronger basis for businesses and\nfinancing institutions in making investment decisions.<\/p>\n
\u201cGas is not enough just to be discovered and produced. Gas must be\nmonetised and reach users at a competitive cost,\u201d Hadi said.<\/p>\n
According to him, strengthening domestic gas utilisation needs to be\ndriven from the downstream side, particularly through infrastructure\ndevelopment and increased gas use by industry.<\/p>\n
With markets and infrastructure prepared in an integrated manner, gas\nfrom production areas can be channelled to demand centres and provide\ngreater added value domestically.<\/p>\n
\u201cSynergy between upstream and downstream is a necessity. When\ninfrastructure and the domestic market are prepared in an integrated\nmanner, more gas can be utilised domestically,\u201d he said.<\/p>\n
Hadi assessed that going forward, efforts should be made to direct\n80\u201390 percent of technically and economically viable gas potential\ntowards meeting domestic needs.<\/p>\n
Issues of pricing, infrastructure readiness, absorption certainty,\nand the economic sustainability of gas field development will be key\ntopics at the 2026 Upstream Oil and Gas Economic Forum (FOREK).<\/p>\n
FOREK 2026 is expected to bring together the government, upstream\nbusinesses, infrastructure and midstream providers, gas buyers, end\nusers, and other stakeholders to build a common perspective and\nformulate applicable solutions.<\/p>\n
One of its focuses is integrating supply sources with demand centres,\nboth through pipeline network optimisation and the use of LNG\ninfrastructure, including regasification facilities, storage, and\nsmall-scale LNG distribution.<\/p>\n
Ultimately, the domestic gas challenge is not merely about the size\nof available reserves, but how that gas can be allocated, distributed,\nabsorbed, and commercialised optimally. These efforts must proceed while\nmaintaining energy security, project economics, and the sustainability\nof upstream oil and gas investment.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/domestic-gas-optimisation-hampered-by-infrastructure-and-market-certainty-1787644327", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }