OPINION : “Lessons in Gas and LNG Governance: ‘Anchor Buyer’"

At The 5th IndoPacific LNG Summit 2026, organized by the Indonesian Gas Society (IGS) in Bali on July 21–22, 2026, there was one presentation that I found particularly interesting. Not merely because of the magnitude of the figures presented, but because it illustrated how the role of LNG in Indonesia's electricity system is changing, as PLN becomes an "anchor buyer" of LNG in Indonesia while seeking to secure gas supplies amid global energy geopolitical volatility.

The presentation was delivered as a keynote by Rakhmad Dewanto, Director of Corporate Planning and Business Development at PT PLN (Persero), under a theme highly relevant to today's global conditions: "Securing Supply in an Era of Geopolitical Volatility."

The message was simple, but its implications were significant: LNG can no longer be viewed merely as an energy commodity. LNG has become an instrument of energy security.

And as PLN's gas requirements continue to increase, I believe PLN, through PLN Energi Primer Indonesia (PLN EPI), is gradually emerging as one of the most important anchor buyers for the development of Indonesia's domestic gas and LNG industry.

Energy Is Pulled in Three Directions

Indonesia faces an energy trilemma: energy must be reliable, affordable, and sustainable at the same time. The problem is that these three objectives do not always move in the same direction.

PLN identifies at least four increasingly significant global pressures: geopolitical uncertainty, fuel price volatility, rising electricity demand, and the pressures of the energy transition.

At the same time, global LNG supply chains are changing due to geopolitical uncertainty and market volatility.

The solution cannot simply be to build more power plants.

What must be secured is the entire primary energy supply chain: ensuring domestic coal and gas supplies, strengthening gas and LNG infrastructure, optimizing the fuel mix and logistics, while reducing dependence on petroleum-based fuels.

The strategy must combine supply diversification, infrastructure readiness, and flexibility in fuel utilization.

This is where LNG assumes an increasingly strategic role.

Energy Demand Is Rising, with Electricity Growing the Fastest

The charts presented by PLN are particularly interesting to examine.

Indonesia's primary energy demand under the Continued Momentum scenario is projected to increase from approximately 9.6 million TJ in 2025 to 11.7 million TJ in 2035, representing growth of around 2% annually.

More importantly, the electricity sector accounts for the largest share of that growth.

The electricity sector's share of primary energy demand, estimated at approximately 28% in 2025, is projected to increase to around 38% by 2035.

Growth in the power sector is projected at approximately 5.4% CAGR during 2025–2030 and 4.6% during 2030–2035.

This means that Indonesia's future energy challenges will increasingly become challenges associated with electricity.

And as electricity demand continues to grow, the availability of energy sources capable of providing flexibility will become increasingly important, particularly as renewable power generation from sources such as solar and wind gains a larger share of the system.

PLN explicitly stated that LNG will continue to play a strategic role in providing power system flexibility while enabling higher penetration of renewable energy.

In other words, LNG is not an opponent of renewable energy.

Within the configuration of Indonesia's power system, the two can actually complement each other.

Gas as a "Bridge" in the Energy Transition

The 2025–2034 Electricity Supply Business Plan (RUPTL) provides a more concrete picture.

In 2024, PLN's electricity generation amounted to approximately 283.7 TWh, with coal still dominating at around 189.6 TWh, or 67%.

Gas accounted for approximately 47.6 TWh, or 17%, while renewable energy contributed around 33.8 TWh, or 12%.

Looking ahead, this composition is expected to change.

Under the 2034 projections, electricity generation is expected to increase to approximately 580–584 TWh. In the ARED scenario, renewable energy reaches approximately 190.9 TWh, or 33%, while coal accounts for around 271.9 TWh, or 47%, and gas contributes approximately 106.9 TWh, or 18%.

These figures explain something that is often overlooked in discussions about the energy transition. Increasing the share of renewable energy does not automatically eliminate the need for gas.

On the contrary, as the proportion of intermittent power generation increases, the system requires more power plants capable of responding quickly to changes in electricity demand.

Gas and LNG have characteristics well suited to this function.

This is why PLN describes LNG as a critical transition fuel that provides the flexibility and reliability needed to support greater renewable energy penetration.

PLN's Gas Requirements to Reach 2,490 BBTUD

This is where the figures become even more interesting.

According to the 2025–2034 RUPTL presented by PLN, the company's gas requirements are projected to grow by approximately 4.5% annually. In 2026, demand is estimated at approximately 1,464 BBTUD.

It is projected to increase to 1,748 BBTUD in 2027, followed by 1,959 BBTUD in 2028, 2,022 BBTUD in 2029, and 2,193 BBTUD in 2030.

By 2034, gas requirements are projected to reach approximately 2,490 BBTUD.

This means that in less than a decade, PLN's gas requirements will increase by more than 1 BBTUD compared with 2026.

However, what I find even more interesting is not simply the volume.

The composition of supply is changing dramatically.

In 2026, approximately 43% of PLN's gas requirements are supplied through pipeline gas, while 57% comes from LNG.

By 2030, the composition is projected to be approximately 45% pipeline gas and 55% LNG.

However, by 2034, the share of pipeline gas is expected to decline to only around 33%, while LNG increases to approximately 67%.

LNG cargo requirements are also expected to surge.

From approximately 103 cargoes in 2026, demand is projected to increase to 143 cargoes in 2027, 167 cargoes in 2030, 185 cargoes in 2032, 192 cargoes in 2033, and approximately 214 LNG cargoes annually by 2034.

Two hundred and fourteen cargoes a year.

Almost one cargo every one and a half to two days.

At that point, PLN will no longer be merely a gas consumer.

PLN will become one of the key players shaping Indonesia's domestic LNG ecosystem.

PLN as an "Anchor Buyer"

For me, this has significant implications for the development of Indonesia's gas fields.

The challenge in developing gas fields is not simply discovering reserves.

Gas must have a market.

Upstream projects require certainty of offtake.

Midstream infrastructure requires certainty of throughput.

LNG plants require certainty of feed gas supply and buyers.

Banks and investors require certainty of cash flow.

In simple terms: discovery requires bankability, and bankability requires a market.

This is where PLN's growing requirements can serve as anchor demand for national gas projects. And PLN EPI appears to be moving in that direction.

Securing Long-Term Contracts

During 2025–2026, PLN EPI secured several long-term gas and LNG contracts.

With West Natuna Exploration Limited (WNEL), PLN EPI signed a Gas Sales Agreement on July 11, 2025, for a volume of 111 BBTUD over a period of 10 years.

With Mubadala Energy, a Natural Gas Sales Agreement was signed on July 6, 2026, for a volume of 160 BBTUD, potentially increasing to 300 BBTUD, with a contract duration of 15 years.

With INPEX, the contract covers 37.5 MTPA, or approximately 640 LNG cargoes, over 15 years.

Meanwhile, the contract for the South Hub, comprising Muara Bakau, East Sepinggan, Ganal, and West Ganal, covers 11.5 million tonnes, or approximately 190 LNG cargoes, over 10 years.

These are important steps.

Energy security cannot be established only when a crisis has already occurred.

Contracts, infrastructure, vessels, storage, and regasification facilities must be prepared years in advance.

LNG Is Not Just About Molecules, but Infrastructure

Securing LNG contracts alone is not enough. Indonesia is an archipelagic country. Gas resources are not always located close to electricity demand centers.

Therefore, Indonesia's greatest LNG challenges often lie in midstream and last-mile infrastructure.

The infrastructure map presented by PLN illustrates the scale of these challenges.

The LNG supply chain must reach Sumatra, Kalimantan, Java-Bali, Nusa Tenggara, Sulawesi, Maluku, and Papua through a combination of LNG carriers, Floating Storage Units (FSUs), Floating Storage and Regasification Units (FSRUs), Onshore Regasification Units (ORUs), pipelines, and LNG terminals.

For the Nusa Tenggara cluster, for example, two LNG carriers and six ORUs are planned.

The Sulawesi–Maluku cluster requires two LNG carriers, five ORUs, one FSU, and two FSRUs.

North Papua is planned to have two ORUs and two FSRUs.

Meanwhile, the Sumatra–Kalimantan cluster includes one LNG carrier and three FSRUs.

Overall, the infrastructure outlined in the presentation has a regasification capacity of approximately 3,850 MMSCFD and total LNG storage capacity of around 1.2 million m³.

Therefore, LNG security is not merely a matter of upstream security.

It is a combination of:

molecules + liquefaction + shipping + storage + regasification + pipelines + power plants.

If even one link in this chain is unavailable, the entire system could be disrupted.

Nias: Replacing Petroleum-Based Fuels with LNG

A concrete example can be seen in Nias. PLN is developing midstream LNG infrastructure to supply the 34.45 MW Nias gas engine power plant (PLTMG), the 20 MW Nias 2 gas engine power plant, and the 5 MW Nias 3 gas engine power plant.

The permanent system is planned to use an LNG carrier with a capacity of approximately 3,000 m³, with its Commercial Operation Date (COD) scheduled for the second quarter of 2029.

The impact is significant.

This conversion to gas is expected to reduce petroleum-based fuel consumption by approximately 155,000 kiloliters annually.

Fuel cost savings are projected to reach Rp72.4–153.0 billion per year, while reducing emissions by approximately 29,000–47,000 tonnes of CO₂ annually.

This demonstrates that gas conversion programs are not merely an environmental initiative. They also deliver tangible economic value.

Tarakan Provides Evidence

Tarakan has already provided an example of implementation. The LNG infrastructure in Tarakan, North Kalimantan, supplies the 16.6 MW Gunung Belah gas engine power plant and the 14 MW Kampung Satu power plant.

Its regasification facility has an average capacity of 2.51 BBTUD, with swing capability of up to 5 MMSCFD, and achieved COD in 2024 and 2025.

As a result, petroleum-based fuel consumption has been reduced by approximately 32,000 kiloliters annually, with cost efficiencies of around Rp74–147 billion per year, while also strengthening the reliability of the electricity system.

If this model can be replicated across dozens of isolated electricity systems in Eastern Indonesia, the aggregate benefits would certainly be much greater.

Do Not Forget Pipelines

Interestingly, PLN's strategy does not mean that everything must be converted to LNG. For certain distances and locations, pipelines remain the most economical solution.

One example is the WNTS–Pemping Gas Pipeline project. At the time of the presentation, EPC progress on the project had reached 89.99%, with mechanical completion targeted for September 2026 and COD scheduled for the fourth quarter of 2026.

The pipeline has a design capacity of 300 MMSCFD. Once completed, gas from Natuna is planned to be transported to Batam, central and southern Sumatra, and western Java.

This, in my view, should become the guiding philosophy for developing Indonesia's gas infrastructure:

pipeline where possible, LNG where necessary.

It is not about positioning pipelines against LNG, but about choosing the most economical, flexible, and secure mode of gas transportation for each market corridor.

From "Gas Allocation" to "Gas Architecture"

There is an important lesson from PLN's presentation.

Indonesia has too often discussed gas from an allocation perspective: how much for domestic consumption, how much for export, how much for fertilizers, industry, electricity, and so on.

However, our challenges have become far more complex.

What we need now is a national gas architecture.

Gas resources in Natuna, Andaman, Kalimantan, Papua, or Masela must be viewed as part of one integrated system, together with LNG plants, FSRUs, receiving terminals, LNG carriers, ORUs, pipeline networks, and demand centers.

With this perspective, the questions we ask begin to change.

No longer simply:

"How much gas is available?"

But rather:

"Where is the gas located, who needs it, when is it needed, how much is required, how will it be transported, and what is its delivered cost?"

That is the true essence of gas governance.

Right Molecule, Right Infrastructure, Right Market

From PLN's presentation, I took away one particularly powerful message. Energy security cannot be built merely by possessing gas reserves underground. Those reserves must be produced. Production must have buyers. Buyers must have infrastructure. Infrastructure must be available when gas begins to flow. And the entire chain must result in electricity prices that remain affordable for the public.

Therefore, in my view, Indonesia's future LNG strategy must be guided by the principles of:

Right Molecule; Right Infrastructure; Right Market; and Right Timing.

PLN holds a highly strategic position within this architecture.

With gas requirements projected to reach 2,490 BBTUD by 2034, approximately 67% of which will be met through LNG, and demand for around 214 cargoes annually, PLN has the potential to become an anchor buyer that helps create market certainty for the development of Indonesia's gas fields.

Ultimately, energy security is not about possessing the greatest possible amount of energy.

It is the ability to deliver energy to the right place, at the right time, in the right quantity, and at the right price.

And amid increasingly unpredictable global geopolitics, it is this capability that will determine whether Indonesia merely possesses gas resources or truly achieves national energy security.