CNG Set to Replace LPG, Spotlight on Indonesia's Gas Giants

The government is currently studying the use of 3 kg compressed natural gas (CNG) canisters as an alternative to LPG. The programme is directed at reducing LPG imports, easing the subsidy burden, and optimising the utilisation of domestic gas. However, the programme remains in the testing and roadmap development phase. Investors therefore need to distinguish between issuers that already derive revenue from CNG and companies that only have potential involvement if the government programme is realised commercially. Based on a presentation by the Ministry of Energy and Mineral Resources, CNG is stored at a pressure of around 200-250 bar and is estimated to provide energy cost savings of up to 30%. The government is also developing cluster-based CNG and household gas networks as part of efforts to reduce LPG consumption. The government’s gas diversification policy could impact several issuers on the Indonesia Stock Exchange (BEI), including PT Super Energy Tbk (SURE) and PT Citra Nusantara Gemilang Tbk (CGAS). Among listed issuers, SURE has the most transparent CNG revenue contribution. CGAS possesses a strong CNG distribution business model but does not separate CNG revenue from other gas sales. Other issuers include PT Rukun Raharja Tbk (RAJA), which trades CNG, and PT Perusahaan Gas Negara Tbk (PGAS), which has the most complete gas ecosystem but does not disclose CNG revenue separately. Valuations in this article use intraday share prices on 13 July 2026 around 15.11-15.25 WIB. The PER uses net profit attributable to parent entity owners for FY2025, while PBV uses parent entity equity. Figures for RAJA and PGAS reported in US dollars are converted at an exchange rate of Rp18,064/US$. SURE has the purest revenue correlation to CNG. In 2025, 92.73% of the company’s revenue came directly from CNG sales. This business is operated through several subsidiaries that run CNG Mother Stations in Tapen, Subang, and Rembang. Its operational activities include compressing gas into tube skids, transporting it by truck, and providing and operating pressure reducing stations at customer sites. Despite the purity of SURE’s CNG business, its fundamentals are weak. The company is still loss-making, carries a heavy financial burden, and has negative parent entity equity. Consequently, conventional PER and PBV metrics are not relevant. SURE’s shares are the most sensitive to an increase in CNG sales but also carry the greatest financial risk. The potential from the government programme will only open up if the company can expand distribution from industrial customers to commercial clusters or households. CGAS is engaged in gas trading and distribution, CNG facility construction, filling stations, installations, and gas distribution services to industries and MSMEs. The company uses a virtual pipeline model to reach customers not yet connected to the pipeline network. This model relies on filling facilities, gas transport vehicles, and receiving installations at customer locations. CGAS is also developing a CNG Station in Gresik and Grobogan, as well as an LNG Station in Karawang. Its business scope makes CGAS quite flexible to follow cluster-based CNG projects, but the financial reports do not yet separate CNG and LNG revenue. Compared to SURE, CGAS has a lighter balance sheet and is already profitable. However, its business scale is smaller and net margins remain thin. An increase in CNG demand could be more material for CGAS because its revenue base is not yet large. Nonetheless, this relationship will only turn into a measurable catalyst if the company secures contracts, gas allocations, or distribution areas within the government programme. RAJA has a broader business scope than SURE and CGAS. The company is involved in oil and gas lifting, compression, transmission, gas transportation, LPG terminals, EPC, infrastructure operations, and natural gas and CNG trading. Natural gas and CNG trading is carried out through PT Energasindo Heksa Karya in Jambi, Riau, West Java, and Banten. RAJA also possesses midstream infrastructure that can support increased gas supply and distribution. RAJA’s CNG business already generates commercial volume, but it is only one part of an integrated energy portfolio. Therefore, CNG growth does not necessarily have as large an impact as it would on a purer play. RAJA’s fundamentals are stronger than the two previous issuers, but its share price already reflects a growth premium. The market is not only pricing in the CNG business, but the entire gas portfolio, infrastructure, upstream oil and gas, and strategic holdings. RAJA has the potential to be involved through gas trading, compression, or infrastructure development. However, the impact of the 3 kg CNG programme is likely to be more diversified at the consolidated level. PGAS possesses the most complete gas ecosystem. Its business scope includes transmission, distribution and trading of gas, LNG, regasification, household gas networks, and gas filling stations. The CNG business is run through PT Gagas Energi Indonesia with the Gaslink and C-Cyl products. This model serves customers not yet connected to the pipeline network using vehicle-based distribution. As a Subholding Gas of Pertamina, PGAS holds a strategic position if the government requires integration of supply, infrastructure, and distribution. However, the large scale of the business means the impact of a household CNG project may not be as significant in percentage terms compared to smaller issuers.