ByTsvetana Paraskova– Mar 07, 2025, 6:15 AM CST
Indonesia has started replacing diesel as a fuel in dozens of power plants with LNG, which is set to boost demand for natural gas in one of the world’s top LNG exporters.
Following a decade of delays, Indonesia finally launched a $1.5 billion project to distribute LNG on a small scale to power dozens of plants that currently run on diesel, Reuters reports.
‘;
document.write(write_html);
}
PLN EPI, a fuel procurement and transportation operator for Indonesia’s largest power company, PLN, is leading the project.
Last year, Japan’s JERA signed a collaboration agreement with PLN EPI to collaborate in LNG procurement, optimization, and the development and operation of LNG receiving terminals in anticipation of growing demand for LNG in Indonesia. By utilizing JERA’s LNG expertise, JERA and PLN EPI will establish an LNG value chain for the power segment in Indonesia, the companies said.
The project will need more LNG supply in the future, and could lead to Indonesia turning to LNG imports later this decade, according to estimates reported by Reuters.
“We are obliged to provide the LNG … And we are keen on securing more domestic LNG for the project,” Rakhmad Dewanto, director of fuels and gas at PLN EPI, told Reuters.
Early this year, Indonesia reportedly asked its buyers to accept delays to Indonesian LNG cargo exports this year, as the Southeast Asian country looks to meet rising domestic energy and gas demand.
Indonesia has one major LNG project planned for later this decade.
Japan’s oil and gas producer Inpex owns 65% of the Abadi gas project and plans a final investment decision (FID) for the $20-billion Abadi LNG project by 2027.
Abadi LNG has seen years of delays as it has had to change design concepts and then reorganize after supermajor Shell withdrew from the project nearly two years ago.
The Abadi LNG project in Indonesia has received interest from potential buyers to purchase gas from the facility in volumes exceeding the facility’s design capacity, according to Inpex.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com
Join the discussion | Back to homepage
