Indonesia taps eastern LNG to shield Java industry from cost hikes

Tuban, East Java (ANTARA) - Indonesia will redirect liquefied natural gas (LNG) from its central and eastern islands to power industrial hubs in Java, as declining production triggers regional price surges and threatens widespread factory layoffs.

Energy and Mineral Resources Minister Bahlil Lahadalia announced the strategy on Thursday following the inauguration of a mini LNG plant in Tuban, East Java.

The move targets manufacturing sectors in West Java, Banten, and Jakarta, where a drop in localized gas lifting has choked pipeline supplies and driven up operational costs.

To prevent an industrial crisis, the government will tap fields in Maluku, Sulawesi, Papua, and Kalimantan. Despite the domestic reallocation, Bahlil guaranteed that international buyers would not be affected.

"Everything is under control. There will be no reduction in LNG exports," the minister stressed, ruling out a repeat of the export quota cuts seen in 2025.

The domestic supply crunch has sparked urgent intervention from labor groups and lawmakers.

The Confederation of Indonesian Labor Unions (KSPSI) warned that sustained high gas prices could trigger layoffs for more than 50,000 workers, notably within major ceramic manufacturing hubs like Bekasi.

In response, parliamentary leaders confirmed plans to meet with state energy firm Pertamina to negotiate price mitigations and protect manufacturing employment.

Translator: Putu Indah, Tegar Nurfitra

Editor: Aditya Eko Sigit Wicaksono

Copyright © ANTARA 2026