IPA warns of declining investor confidence due to LNG export diversion policy
Tuesday, November 18 2025 - 03:46 PM WIB
By Calvin Purba
The Indonesian Petroleum Association (IPA) highlighted that the government’s policy of diverting LNG cargoes originally allocated for export to meet domestic needs could disrupt the long-term investment climate.
Marjolijin Wajong, Executive Director of the Indonesian Petroleum Association (IPA), said the government is focusing only on the short-term goal of fulfilling domestic LNG requirements without considering the long-term impact on the investment climate.
“Right now, the LNG market has less confidence in us because we act arbitrarily—if we want to stop, we stop; if we want to reduce, we reduce. So there is no certainty,” Wajong said at the Aspebindo Energy Executive Forum on Monday (17/11). “This is what I mean: there are many short-term issues that are disrupting the long term. We are too focused on short-term concerns and not thinking about the long-term implications.”
Wajong also questioned the lack of clarity in Indonesia’s gas balance. She stated that Indonesia’s current gas demand remains unclear.
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“The gas demand is uncertain. A few weeks ago, I met with the government, with the Director General of Oil and Gas, and they still want to review it,” Wajong said. “There used to be what we called a gas balance, but for the past two years, it hasn’t existed.”
The absence of a gas balance explaining Indonesia’s LNG requirements is reflected in a shortfall of around 20 cargoes, caused by higher-than-expected domestic demand.
Minister of Energy and Mineral Resources, Bahlil Lahadalia, said the shortage was caused by an inaccurate projection of domestic LNG demand. Therefore, the government will defer part of its export commitments to 2026.
“We plan to delay some of our export obligations to 2026,” Bahlil said during a hearing with Commission XII of the House of Representatives (DPR RI) on Tuesday last week.
The upstream oil and gas regulator, SKK Migas, estimated in July that Indonesia would export around 150 LNG cargoes this year. However, the agency had warned that several shipments might be redirected to domestic consumers amid rising demand from state-owned power utility PT PLN (Persero).
Editing by Alexander Ginting