JAKARTA: Indonesia’s recent decision to trim pipeline gas exports to Singapore is too marginal to ease supply gaps facing industrial plants in Java, with export capacity set to keep shrinking as demand outpaces production.
Localised shortages are projected to widen sharply through 2028.
Domestic gas demand rose 4% year-on-year in the January to July period, while production fell 3.7%, according to data from the Joint Organisations Data Initiative coordinated by the International Energy Forum and backed by the International Energy Agency and the Organisation of the Petroleum Exporting Countries.
Statistics Indonesia recorded a nationwide liquefied natural gas (LNG) export volume of 6.2 million tonnes from January through September, down 23% from the same period in 2025 as shipments are reduced to safeguard domestic supply.
Yayan Satyakti, an energy economist at Universitas Padjadjaran, expects the volume of gas available for export to continue to shrink as production declines and demand rises.
“Our calculations indicate that LNG export capacity will fall from approximately 1,490 million standard cubic ft per day (mmscfd) in 2025 to around 950 mmscfd by 2027, assuming domestic needs are met first. This projection does not yet account for the Eni project,” Yayan said, referring to the Italian company’s deep-water gas projects offshore East Kalimantan.
As of Oct 24, the government curtailed pipeline gas exports to Singapore by 31 mmscfd, approximately 8% of the previous 409.5 mmscfd volume.
The gas exported to the neighbouring city-state originates from the Natuna Field, and the amount freed up by the reduced shipments is now channeled to a power plant run by state electricity company in Batam, Riau Islands.
No pipeline infrastructure currently connects Natuna to energy-hungry Java.
“The reduction is marginal and will not benefit industrial plants in Java,” Yayan said, noting that the looming national gas deficit far outweighed the volume recovered through these cuts.
Yayan’s economic projection model indicates a national shortfall of approximately 200 mmscfd in 2027 and 330 mmscfd in 2028, assuming LNG exports remain at 2026 levels.
Yayan added that the root of the problem lay in misdirected investment rather than a simple lack of capital.
While overall upstream investment has risen to US$15.4 bil as of 2025, exploration spending accounts for less than 10%of that total. The number of exploration wells has fallen from 41 in 2023 to 35 in 2025. For 2026, only five of a planned 39 had been completed by the end of May.
Indonesia’s gas production has declined by an average of 1.9% a year between 2015 and 2025, according to the Energy Institute, and this decline has yet to be offset by the development of new fields.
While upstream investment rose from US$10.9bil in 2021 to US$15.4bil in 2025, the highest level in a decade, exploration spending stood at only US$1.3bil in 2024, less than 10% of the total.
Data from Wood Mackenzie showed 499 undeveloped discoveries, with a median size of just three million barrels of oil equivalent.
Approximately 78% of these are considered too small to be economically viable under current price levels and regulatory frameworks.
Substantial relief was not expected until 2028-2029, when Eni’s North and South Hub projects begin production, reaching a capacity of 2,000 mmscfd by 2029, Yayan added. — The Jakarta Post/ANN
