Indonesia has recently faced a significant LPG shortage, particularly affecting the availability of subsidized 3-kilogram canisters relied upon by low-income households. This scarcity has been exacerbated by policy changes restricting sales to official distributors, leading to long queues and public frustration. In response, the government reversed the policy, allowing small retailers to resume sales to alleviate the shortage (The Jakarta Post).

One of the major challenges in Indonesia’s LPG supply chain is its heavy reliance on imports. In 2023, Indonesia consumed around 8.7 million tons of LPG, but 6.9 million tons came from imports. To reduce this dependency, the government plans to boost domestic LPG production by approximately 1 million metric tons annually by developing 15 identified gas fields over the next three to four years. This initiative aims to double current production levels, ensuring a more self-sufficient supply (Reuters).

LPG, primarily composed of propane (C₃H₈) and butane (C₄H₁₀), is separated from natural gas and crude oil during processing. To increase domestic production, Indonesia needs to optimize its natural gas processing facilities and improve gas fractionation efficiency. This involves upgrading gas processing plants such as those at Bontang, Badak, and Tangguh, ensuring higher extraction rates of LPG from raw gas.

One of the key technical challenges is removing impurities like CO₂, H₂S, and water vapor from raw gas before fractionation. Indonesia’s gas fields, particularly in Sumatra and Kalimantan, have varying compositions of wet and sour gas, which require advanced gas sweetening and dehydration processes. Technologies such as amine gas treating, molecular sieves, and cryogenic separation play a crucial role in improving LPG recovery efficiency.

Moreover, increasing LPG yield from condensate-rich gas fields requires enhanced natural gas liquids (NGL) recovery techniques such as turboexpander cryogenic processing. These systems use Joule-Thomson (JT) expansion and cryogenic cooling to separate heavier hydrocarbons, ensuring higher propane and butane recovery rates.

Beyond production, effective storage and distribution are critical to reducing supply disruptions. Indonesia is investing in floating storage and regasification units (FSRUs), particularly in Java and Sumatra, to improve logistics flexibility. Expanding the pipelines and pressurized LPG storage terminals will also ensure a more stable supply to key demand centers.

Additionally, mini-GTL (Gas-to-Liquids) and small-scale LNG plants could provide alternative sources of LPG by converting stranded or flared gas into marketable fuels. Such technologies are already being explored in remote gas fields to improve overall energy efficiency and reduce reliance on imports.

By leveraging advanced gas processing technologies, optimizing field development, and improving distribution infrastructure, Indonesia aims to achieve greater LPG self-sufficiency in the coming years. While challenges remain, continued investment in these technical solutions will help ensure a stable and reliable domestic LPG market.

Author: Syahreza A. Mahmudi.