PLN is revising a long-term power supply plan to build 80 GW of new generation capacity, with a quarter to be powered by gas instead. — Reuters
JAKARTA: Indonesia’s state power utility is expecting its natural gas demand to nearly double by 2040 as it aims to build 20 gigawatt (GW) of gas-fired power plants, a company official says, in the quest to reach net-zero emissions by 2060.
Perusahaan Listrik Negara (PLN), which has pledged to stop expanding coal-fired capacity, is revising a long-term power supply plan to build 80 GW of new generation capacity, with a quarter to be powered by gas instead.
Its demand for gas, seen as a transitional fuel in the move to renewables from coal, is estimated at 1.2 trillion British thermal units (TBTU) this year, and could increase to 1.5 TBTU in 2027, as PLN converts diesel-fired power plants to liquefied natural gas (LNG), said Rakhmad Dewanto, a director of PLN Energi Primer Indonesia.
Gas demand is expected to reach 2.3 TBTU in 2040, Rakhmad, tasked with making PLN’s fuel purchases, told delegates at the Indonesia Petroleum Association conference.
“These are still conventional numbers, because we have potential upside coming from additional demand from smelters,” he said, a prospect that could boost PLN’s gas consumption to 3.4 TBTU in 2040.
Indonesia’s smelting sector has expanded massively in recent years as investment poured into the nickel processing industry to meet surging global demand for batteries.Coal is the dominant power source for its operations, but some companies are building gas-fired units instead. Much of that gas demand is expected to be met by LNG, Rakhmad said, as supply from existing pipelines falls.
This year PLN’s LNG consumption has surpassed gas supplied through pipes, Rakhmad said. LNG consumption in 2024 is seen at around 82 to 84 cargoes, up to 23% from last year as supply.
Out of the estimated required cargoes this year, 76 have been secured, he said, adding that PLN has requested import permits from the government.
“At least we need to secure the import quota first. If domestic supply is available, we will not need to import,” he added.
In 2025, LNG demand by the utility firm expected to between 84 cargoes to 90 cargoes, he said.
Most of Indonesia’s future gas supply is expected to come from its eastern region, while demand is centred in the west.
If LNG meets all the gas needs for the 20 GW of capacity by 2040, that could translate into 400 cargoes of LNG per year, Rakhmad said. That figure compares with Indonesia’s current production of fewer than 200 LNG cargoes a year.
To meet future demand, the government is pushing for quick development of recent discoveries such as Italy’s Eni in the Kutai basin and the United Arab Emirates’ Mubadala Energy in the South Andaman block.Consultancy Wood Mackenzie said Indonesia was expected to be a net importer of gas by 2040, though significant new discoveries could alter that scenario. — Reuters
