By Alexander Ginting
Indonesia, Southeast Asia’s largest natural gas market, may encounter domestic gas supply deficits by 2033 unless it accelerates development of new resources, according to a recent analysis by Wood Mackenzie released on Wednesday.
Despite ambitious national targets to produce 1 million barrels of oil per day and 12 billion cubic feet per day (bcfd) of gas by 2030, Indonesia’s domestic gas supply is projected to decline due to maturing fields. The research stresses that while sufficient gas resources exist, estimated at over 35 trillion cubic feet (tcf) across key discoveries like Abadi, Geng North, Tangkulo, and Layaran, an estimated investment of US$50 billion is required to develop these fields and untapped resources.
Joshua Ngu, Vice Chairman for Asia Pacific at Wood Mackenzie, said, “Indonesia has sufficient resources to meet existing demand but needs clear, consistent, and long-term policies to attract investment and expedite development. Without this, the country risks a gas crisis and increased reliance on expensive LNG imports or less environmentally friendly coal alternatives.”
Read also: Gas demand set to surpass oil, coal in SE Asia by 2050, Wood Mackenzie report reveals
Wood Mackenzie forecasts that Indonesia’s gas demand, including exports, will remain steady at around 6 bcfd until 2035. However, without new supply developments, domestic shortfalls could drive dependence on imports and impact industrial feedstock availability.
To avoid this, Wood Mackenzie recommends regulatory assurances safeguarding contract terms, adaptive gas pricing mechanisms tailored to project-specific risks and commitments, and greater market flexibility allowing producers to redirect gas sales if buyers reduce offtake.
Aruna Mannie, Director of Consulting at Wood Mackenzie, added, “By implementing effective policies and incentives, Indonesia can maintain competitiveness and attract continued investment from international operators equipped with the capital and expertise necessary for large-scale projects.”
Editing by Reiner Simanjuntak
