Jakarta. State electricity company PLN expects natural gas demand for its power plants to increase by an average of 4.5% annually through 2034, driven by rising electricity consumption from industrial expansion, transport electrification, and rapidly growing data centers.

PLN projects gas demand to rise from 1,748 billion British thermal units per day (BBTUD) in 2026 to 2,490 BBTUD in 2034. Liquefied natural gas (LNG) is expected to account for a larger share of supply, increasing from 57% to 67% over the same period.

"The demand for electricity in Indonesia will continue to grow. Therefore, we need an energy supply that is secure, reliable, and flexible. In this context, gas is not only a transition fuel but also an essential component in maintaining the reliability of the national power system," Rakhmad Dewanto, PLN's Director of Corporate Planning and Business Development and acting president director of PLN Energi Primer Indonesia (PLN EPI), said on Thursday.

To secure future supply, PLN EPI has signed long-term gas and LNG agreements with West Natuna Exploration Limited (WNEL), Mubadala Energy, INPEX, and South Hub.

The agreements cover gas supplies of up to 300 BBTUD and LNG contracts totaling more than 49 million tons, providing long-term certainty for the country's electricity system, Rakhmad said.

PLN EPI is also accelerating LNG infrastructure development, including floating storage and regasification units (FSRUs) in West Java, East Java, Bali, and Cilegon. The company is expanding gasification clusters in eastern Indonesia while increasing national LNG storage capacity to around 1.2 million cubic meters and targeting regasification capacity of 3,850 million standard cubic feet per day (MMSCFD).

According to Rakhmad, the infrastructure expansion will improve LNG distribution flexibility and strengthen energy supply chain resilience amid global geopolitical uncertainties.

"We will continue expanding renewable energy. However, the power system must also remain reliable. This is where gas plays a strategic role in balancing energy security, affordability, and sustainability," he said.

Rakhmad said the strengthening of long-term supply contracts, faster LNG infrastructure development, and greater diversification of primary energy sources form part of PLN's strategy to build a more resilient, flexible, and sustainable energy system while supporting Indonesia's net-zero emissions target and environmental, social, and governance (ESG) commitments.

He added that domestically produced LNG, which he described as the cleanest fossil fuel, will play an increasingly important role in supporting both energy security and the country's energy transition.

PLN expects electricity demand growth to outpace overall primary energy consumption. While national primary energy demand is projected to grow by around 2% annually, electricity demand is forecast to increase by 4.6% to 5.4% each year.

Data centers are expected to become a major driver, with electricity demand from the sector alone projected to increase by around 15 gigawatts over the next five years.

Under PLN's 2025–2034 Electricity Supply Business Plan (RUPTL), national electricity generation is projected to nearly double from 304.4 terawatt-hours (TWh) to 584.3 TWh. During the same period, coal-fired generation is expected to account for 47% of the power mix, while renewable energy's share is targeted to rise to 33%.

"In this scenario, LNG will remain the balancing fuel that ensures system reliability when electricity generation from solar and wind fluctuates," Rakhmad said.

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