Natural Gas: Pillar of Indonesia’s Energy Security in the Transition Period

In an effort to maintain Indonesia’s energy security, natural gas plays an important role as an ideal energy source in the transition period towards the use of renewable energy.

Natural gas offers a short-term solution that is more environmentally friendly than other fossil fuels, such as coal, while supporting steps towards a greener and more sustainable future.

Therefore, oil and natural gas development strategies in Indonesia must be directed at maximizing this potential.

Apart from that, downstream oil and gas is a crucial strategic step. Downstreaming aims to increase the added value of oil and natural gas through the development of the petrochemical industry.

The petrochemical industry has a longer value chain compared to oil and natural gas refining alone. Products produced from this downstreaming, such as urea, propylene, resins and fuel blending, have much higher added value and can support various industrial sectors.

PT. Pertamina, as a national energy company, is expected to be a pioneer in oil and gas downstreaming. By strengthening the domestic chemical industry, Pertamina can help reduce Indonesia’s dependence on imports of chemical products, which are still high.

Indonesia’s trade balance for chemical materials and products is currently still negative, because the majority of domestic chemical product needs are met through imports. Reducing this dependency will strengthen the national economy and support the resilience of domestic industry.

The role of the chemical industry in the Indonesian economy is very significant. The chemical industry is the backbone for various other industrial sectors.

For example, basic chemicals (other than fertilizer) are used by 122 of the total 180 economic sectors in Indonesia. Without a strong chemical industry, the manufacturing sector will not be strong.

The saying “Chemical Industry is the Heart of Manufacturing Industry” describes how important the role of the chemical industry is in supporting the manufacturing sector and the economy as a whole.

The development and utilization of natural gas as well as the downstreaming of oil and natural gas are strategic steps that Indonesia must take to maintain energy security and reduce dependence on imported chemical products.

With the right strategy, Indonesia can strengthen its position on the global energy map.

Source: Bappenas