Despite current assurances of stable gas production, Indonesia faces a potential supply deficit within the next seven years, according to EY Indonesia. While the nation currently maintains a secure position, evident from its ongoing gas exports, this outlook is tempered by future projections from consulting experts.
Eric Listyosuputro of EY Parthenon EY Indonesia warns that a gas supply shortfall could emerge as early as 2032-2033. This critical situation is contingent on a lack of new investment, particularly as Indonesia’s peak gas production is anticipated to occur around 2030. “A deficit could materialize by 2032-2033 because domestic demand will grow significantly,” Eric explained during the Energy Insight Forum, titled ‘Gas Outlook 2026: Powering Energy Resilience With Strong Governance,’ held in Jakarta on Thursday, December 4.
Indonesia possesses considerable untapped upstream gas potential. However, capitalizing on these valuable reserves presents several intricate challenges. The primary obstacle lies in the geographical disconnect between gas sources and major demand centers. A significant portion of Indonesia’s upstream gas potential is concentrated in its eastern regions, whereas the bulk of gas demand, driven by vital industrial needs such as smelters in Sulawesi, is located on the islands of Java, Sumatra, and Sulawesi.
Further compounding these issues are the complexities inherent in the midstream sector. Bridging the gap between production and consumption necessitates substantial investment in regasification facilities, extensive pipeline networks, and efficient distribution channels to reach end-users effectively. To overcome these hurdles, Eric emphasizes the urgent need for robust policies that ensure the simultaneous and coordinated development of both midstream and downstream segments.
“Significant investment is absolutely crucial,” Eric stated. “The future scenario for Indonesia indicates rapid demand growth that will outpace the availability of supply and supporting infrastructure.” This highlights a looming imbalance that requires proactive strategic intervention in the nation’s energy planning.
Indonesia’s Production Lags Behind Malaysia
Expanding on the regional context, Eric pointed out that Indonesia’s gas production for 2024 and 2025 remains considerably lower than that of neighboring Malaysia. Nevertheless, a unique opportunity might arise from the differing timelines for peak production: Malaysia is projected to reach its zenith in 2027, while Indonesia’s peak is not expected until 2030. “This could present an opportunity for Indonesia to expand its international market presence through exports,” Eric suggested. He underscored that while this prospect offers significant potential advantages for Indonesia, realizing them will demand robust government support to navigate the complex landscape of challenges ahead and unlock the nation’s full energy potential.
Summary
Despite current stability and ongoing exports, Indonesia is projected to face a potential gas supply deficit by 2032-2033, according to EY Indonesia. This anticipated shortfall stems from significant domestic demand growth and a lack of new investment, especially as the nation’s gas production is expected to peak around 2030. Indonesia possesses considerable untapped gas potential, primarily located in its eastern regions, far from major industrial demand centers in Java, Sumatra, and Sulawesi.
Addressing this challenge requires substantial investment in midstream infrastructure, including regasification facilities, pipeline networks, and distribution channels. Robust policies are crucial for the coordinated development of both midstream and downstream sectors. While Indonesia’s current gas production trails Malaysia’s, its later peak production in 2030 could present an opportunity to expand its international market presence, though this would necessitate strong government support.
