Abstract

Indonesia is entering a period which is called the country's development "take off". Given this condition, the country will require significant new additions of gas reserves as well as electrical power generation capacity to support the challenging national development targets into the 21st century.

In brief, natural gas has been positioned as one of the key petroleum-alternative energy resources, and, therefore, it is expected that the role of natural gas as a basic energy source will expand further. In line with this challenging target, it is necessary to establish an effective gas development scenario which will encourage both the upstream and the downstream energy industries to satisfy this fundamental need to support The National Development Strategy.

Understanding the financial and operational needs of both producers and consumers is very important as a basic approach in encouraging the upstream activities and to ensure a competitive product price as well. However, to guarantee the security of supply, particularly for a long term commitment, any gas utilization must offer the producers sufficient economic incentive to maintain production capacity and to find and develop additional gas reserves.

This paper will review the background and examine the dynamics of the gas development plan to meet the optimal gas utilization demand for domestic and export purposes.