BPH Migas Promotes CNG Distribution via Pipelines
The Oil and Gas Downstream Regulatory Agency (BPH Migas) is promoting the utilisation of Compressed Natural Gas (CNG), or compressed natural gas, based on pipelines, and accelerating the development of mini-liquefied natural gas (LNG) for household needs. According to Fathul Nugroho, a member of the BPH Migas Committee, this step will reduce dependence on LPG imports, which continue to rise.
Fathul stated that developing CNG-based gas networks and mini LNG will expand energy options for the public beyond subsidised LPG. “These energy choices can enhance the effectiveness of gas distribution and support the government’s targets in converting to safer, cleaner, and more efficient energy,” he said, as quoted from a written statement on Saturday, 9 May 2026.
According to Fathul, household energy needs are currently dominated by subsidised LPG, which burdens the state finances. Indonesia’s LPG imports have reached about 81% of total national needs.
Fathul said that the utilisation of CNG is actually starting to develop in the commercial sector, such as hotels and restaurants. In the National Medium-Term Development Plan 2025–2029, the government targets building household gas networks to reach 350,000 connections by 2029.
To achieve this target, BPH Migas is requesting acceleration of regulations related to building CNG mother stations and mini LNG terminals so that investments can enter more quickly.
Fathul also encouraged accelerating the use of CNG and LNG through the Government and Business Entity Cooperation (KPBU) scheme. This approach can support gas infrastructure development, especially in eastern Indonesia, which faces greater geographical challenges.
“To expand the reach of household gas using CNG, it can be done by converting Gas Fuel Filling Stations (SPBG) into Mother Stations. Meanwhile, for non-pipeline household gas distribution, mini-LNG can be used,” said Fathul.
Previously, the Ministry of Energy and Mineral Resources (ESDM) targeted the utilisation of CNG or compressed natural gas for household needs to be implemented in August 2026, replacing LPG.
According to calculations by the Ministry of ESDM, substituting LPG with CNG can save up to 30% of the total subsidy budget. “With the same price as 3-kilogram LPG, the state can save 30% because its subsidy is lower than the LPG subsidy,” said the Director General of Oil and Gas at the Ministry of ESDM, Laode Sulaeman, on Tuesday, 5 May 2026.
Laode said that the utilisation of compressed natural gas will reduce Indonesia’s dependence on imports of liquefied natural gas or LPG. So far, LPG imports have been a major burden on the state budget, with subsidy values reaching Rp 80.3 trillion per year.
What is the difference between CNG and LPG? Although both are gases, they differ from the material side to the process of obtaining them. CNG comes directly from natural gas, which mostly contains methane, then purified, and compressed at high pressure without changing its form to liquid.
Meanwhile, LPG is obtained from the processing of crude oil or natural gas separated into propane and butane produced in refineries, then liquefied to make it easier to store and distribute.
Because the way of obtaining them differs, CNG remains in gas form in high-pressure cylinders. Whereas LPG is stored in liquid form and turns into gas when used.
In Indonesia, LPG is more practical for household needs because it is easy to distribute in cylinders. Whereas CNG is generally distributed using pipeline networks because it is used for manufacturing industries and urban gas networks.
Nevertheless, Laode said that CNG distribution does not have to rely on pipeline networks. As an alternative, CNG can be channelled using high-pressure cylinders. Those cylinders are designed with special materials to withstand the compressed gas.
According to him, this scheme is actually not new because the use of CNG in cylinders has been applied on a limited basis earlier, especially in the commercial sector, such as restaurants and hotels.
From a safety perspective, he assured that current CNG cylinder technology has developed to the fourth generation, making it quite reliable. “The most important thing is that it has been patented. I target obtaining the patent within three months. So, it’s not making new and assembling cylinders,” said Laode.