Regional Market Report on CNG

  • Indonesia has the largest proven gas reserves in the Asia Pacific region and the eleventh largest in the world
  • Natural gas from the gas pipeline is compressed to CNG at the mother station and is supplied to industries and daughter stations for refueling of NGV
  • Presently, there are 60 CNG stations, of which, 46 have been constructed using state fund

Market Overview

Policies and Regulations in CNG Market

Law No.22/2001

  • Liberalization of the downstream market to direct foreign investment and ending the monopoly of Pertamina

Gas fuel for Transportation Ministerial Decree No. 25/2017

  • The Energy and Mineral Resource Manager has mandated the installation of CNG dispensers at conventional filling stations in Java by 2020
  • The transport of CNG for fuel will be exempted from additional costs, such as toll fees

Regulation 11 of 2017

  • Allocation of natural gas for power generation to PT PLN and IPPs
  • New rule intends to maximize the procurement of natural gas for gas-fired power plants
  • Sets a ceiling price for gas used in IPPs

VAT Exemption Regulation No 52

  • Certain types of natural gas, such as gas transported through pipelines, LNG and CNG has been exempted from VAT

Procurement Strategies

Mother Station

  • It is also know as virtual pipeline network. Piped natural gas is compressed at mother station and the compressed volume is transported via truck to large industries or daughter station
  • Industrial consumers having large and consistent volume prefer this engagement model, as the price majorly depends upon the volume and the distance from mother station

Daughter Station

  • From daughter station CNG is delivered via truck to the small industries. Transportation vehicles also refill CNG from daughter stations
  • There is high competition, as many players are present in this segment