Indonesia has been an important liquefied natural gas (LNG) player in the past 40 years. Its domestic LNG demand continues to grow at a fast pace in the near to medium term, in line with the country’s robust economic growth outlook and the commencement of gas-fired power plants in the next decade.

Feed gas from legacy fields supplying major LNG plants in Indonesia is showing a steady declining trend through 2030. Unlocking gas reserves in the eastern regions will be crucial to both continuing exports and supplying the domestic market, a pickup of the feed supply from the mid-2020s will depend on the success of two proposed mega natural gas and LNG projects, Gendalo-Gehem and Abadi.

LNG export has been falling due to domestic demand growth and expiring contracts with overseas buyers. Several new projects are scheduled to come online in the hope to maintain and lift Indonesia’s gas and LNG output. The commencement of Eni-operated Jangkrik Complex in 2017 has slowed down the decline of feed gas supply to Badak LNG in recent years. Eni also sanctioned the Merakes field in 2018, which will be tied back to Jangkrik to provide backfill from Q4 2020.

Gendalo-Gehem, the second phase of Chevron-operated Indonesia Deepwater Development, could provide significant new supply to Badak LNG but it pushed back its production commencement to Q4 2025 and lowered down the peak gas output estimate to approximately 700 million cubic feet of gas per day (MMcfd).

Figure: Indonesia LNG Plants Feed Gas Supply (2019-2030). Credit: GlobalData.

Construction is progressing on the BP-operated Tangguh expansion project, which will add a liquefaction unit of 3.8 million tonnes per annum (Mtpa) of production capacity to the existing LNG facility in Indonesia’s Papua Barat Province, bringing the total capacity up by 50% to 11.4Mtpa in 2022.

After being stalled for years since the discovery in 2000 and rejection of the floating liquefied natural gas (FLNG) development concept in 2016, the Abadi field will now be developed through a 9.5mtpa onshore LNG plant, approximately 1,200MMcfd at peak production, with an additional domestic gas supply of 150MMcfd. If the project moves forward, a jump in Indonesia’s LNG supply will be observed in the late-2020s.