Making Domestic Needs of Gas a Priority

To ensure that fulfillment of the domestic demand for gas is prioritized before being exported or used for other purposes, the Minister of Energy and Mineral Resources has issued Regulation No. 03 of 2010 on Allocation and Usage of Gas for Domestic Needs.

Although the amount that must be allocated for domestic purposes will be reviewed annually, at least for now, this regulation obliges 25% of the gas production in Indonesia to be set aside for domestic purposes. Only after satisfying that requirement can gas be used for other purposes. Thus, as a result of this regulation, both the government and those involved in gas exploration, extraction, and production activities are responsible to uphold the national interest in a sustainable gas supply - now and in the future.

In future determinations for the domestic allocation of gas, the Minister of Energy and Mineral Resources is required to consider: gas reserves, available infrastructure, gas prices, any prevailing national energy policy, imports, and the public interest. In such considerations, the Implementation Body for Oil and Gas Upstream Activity, or ‘BP Migas’, can provide advice. Priority areas include: the fertilizer industry, electricity services, and the overall natural gas usage.

This Regulation has been in force since 27 January 2010.

Previously, the Minister has issued Regulation No. 34 of 2009 to prioritize domestic needs of mineral and coals. For a brief overview of the latter regulation, see: ILB No. 1281 19/1/2010.