PGN (PGAS) Accelerates $15.4 Billion Coalbed Methane Project to Unlock Indonesia's Next Energy Frontier

JAKARTA, Investortrust.id — PT Perusahaan Gas Negara Tbk (PGAS), better known as PGN, Indonesia's state-owned natural gas distributor and the gas subholding of PT Pertamina, is accelerating development of a major coalbed methane (CBM) project in South Sumatra that could unlock an estimated $15.4 billion in domestic energy value.

The Tanjung Enim project is expected to become one of Indonesia's largest unconventional gas developments, supporting the government's drive to reduce energy imports while strengthening long-term energy security.

Indonesia faces declining production from mature conventional gas fields even as domestic demand continues to rise.

If successfully commercialized, Tanjung Enim's vast CBM resources could become a significant new source of domestic gas, reducing import dependence while supplying fuel for industries, power plants, and future economic growth.

The project received a boost after Dudung Abdurachman, head of Indonesia's Presidential Staff Office, visited PGN's Pagardewa Gas Receiving Station and Compressor Station in South Sumatra on Friday to review development progress.

The Presidential Staff Office, which oversees implementation of the government's strategic priorities, is pushing to accelerate projects that expand domestic energy production and reduce Indonesia's dependence on imported fuels.

Dudung said several administrative issues remain, including revisions to regional spatial planning, but added that all stakeholders had agreed to expedite the remaining regulatory process.

"The remaining administrative matters will be resolved in accordance with applicable regulations," he said.

The Presidential Staff Office is also coordinating with multiple government agencies to remove cross-sector bottlenecks so the Muara Enim CBM project can move into commercial production as quickly as possible.

PGN has already prepared both the technical and commercial framework for the development.

Gas deliveries are expected to increase gradually from 1 million standard cubic feet per day (MMSCFD) to 25 MMSCFD, supplying industrial customers and power generation facilities across the region.

According to Indonesia's Directorate General of Oil and Gas, the Tanjung Enim field contains approximately 9.7 trillion cubic feet (Tcf) of original gas in place, making it one of the country's largest untapped unconventional gas resources.

PGN President Director Arief K. Risdianto said support from the Presidential Staff Office would help resolve infrastructure and regulatory challenges surrounding the project.

Beyond coalbed methane, PGN is pursuing two additional domestic gas sources—biomethane produced from palm oil waste and synthetic natural gas (SNG)—as part of a broader strategy to diversify Indonesia's energy supply.

The company is developing a new gas injection hub in South Sumatra that will collect supplies from CBM, biomethane, and other future sources before feeding them into Indonesia's existing transmission pipeline network.

According to Arief, integrating both pipeline and non-pipeline infrastructure will maximize utilization of domestic energy resources while improving supply reliability.

As Pertamina's gas subholding, PGN plans to leverage its nationwide gas transmission and distribution network to connect new production with industrial consumers while maintaining strong corporate governance standards.

Although technical preparations are largely in place, the company emphasized that successful execution will require continued coordination among central and regional government agencies.

PGN said the Tanjung Enim project represents a long-term commitment to supporting Indonesia's national energy policy by delivering cleaner, more reliable domestic energy while generating wider economic benefits for South Sumatra and the broader Indonesian economy.