Indonesia finalizes diversion of April-May export LNG cargoes to domestic market: sources

Indonesia has finalized the diversion of export LNG cargoes for April and May to the domestic market, totaling seven cargoes, in response to strong gas demand, sources familiar with the matter told Platts, part of S&P Global Commodity Insights, on March 27.

The seven export LNG cargoes allocated to the domestic market for April and May are from the Bontang and Tangguh LNG projects, the sources said.

It was not immediately clear how the cargoes would be split between each project over the two months or how many export LNG cargoes would be allocated to the domestic market after June.

Platts reported March 25 that Indonesia has diverted two export LNG cargoes each for April and May to the domestic market in response to robust gas demand.

"SKK Migas has made every effort to meet domestic LNG needs until May 2025, with supplies coming from Bontang and Tangguh," Hudi Suryodipuro, the upstream regulator's spokesperson, told Platts on March 27.

The move comes as Indonesia had yet to clarify its LNG exports beyond the first quarter of 2025, following a review of domestic natural gas demand, sources familiar with the matter told Platts earlier.

The country's allocation of export LNG cargoes to the domestic market also comes at a time when its customers in East Asia are entering the lower-demand shoulder months.

Using LNG

PGN, the gas subsidiary of Indonesia's Pertamina, will use LNG initially allocated for export -- either from Tangguh, Bontang or Donggi Senoro -- to cover a supply shortfall from Medco's Corridor block in South Sumatra due to natural decline, a senior PGN official said March 12.

"For LNG supply, there are some challenges. The LNG that is going to be allocated to us comes from canceled export commitments," PGN President Director Arief Setiawan Handoko told a parliamentary hearing broadcast on YouTube.

"For example, Tangguh has contracts with foreign buyers, but these are being reduced to meet domestic needs. This, of course, increases costs for PGN," he said.

Looking ahead, Handoko said he hoped domestic gas supply and LNG sources would offer a long-term solution, especially for markets not yet connected to infrastructure or located in remote areas.

Ministry directive

Indonesia's Ministry of Energy and Mineral Resources has also directed that all gas production from the Mako gas field, with a plateau sales gas rate of 111 billion Btu/day, be made available for the domestic market in Batam, the field's operator, Conrad Asia Energy, said March 12.

Under the directive, the MEMR requested that all output from the Mako gas field be purchased by PLN Energi Primer Indonesia, a wholly owned subsidiary of PLN Persero, due to the "very strong growth in domestic demand for gas in Indonesia."

The Mako gas field's plateau gas sales of 111 billion Btu/day equate to around 800,000 mt/year of LNG.

Indonesia is one of the world's top 10 LNG producers and a key supplier to consumers in Japan, South Korea, China and Taiwan through its three main projects.

The country exported 17.5 million mt of LNG in 2024, according to Commodity Insights data.