From Resource Development to System Governance: Rethinking Indonesia's National Gas System

Indonesia's natural gas sector is undergoing a fundamental transformation from an export-oriented industry into an integrated national energy system that simultaneously supports energy security, industrial development, domestic value creation, and the transition to a lower-carbon economy. Existing studies generally examine upstream production, LNG exports, infrastructure, pricing, or domestic utilization separately, providing limited understanding of how these components interact within a unified governance system. This study addresses this gap by proposing the National Gas System Framework (NGSF), an integrated political economy framework that conceptualizes Indonesia's gas sector as a system of seven interdependent dimensions: resource availability, infrastructure integration, market organization, institutional governance, gas allocation, energy transition, and strategic national outcomes. Employing a qualitative Strategic Policy Assessment (SPA), the research draws upon documentary analysis of government policies, industry reports, and international literature to examine how interactions among these dimensions shape long-term gas governance. The analysis demonstrates that Indonesia's principal challenge has shifted from maximizing natural gas production and LNG exports toward optimizing national value creation through coherent system governance. The findings further show that sustained competitiveness depends less on geological resource abundance than on effective institutional coordination, integrated infrastructure, transparent market organization, balanced domestic and export allocation, and the incorporation of low-carbon technologies such as biomethane and carbon capture and storage. The study contributes to the literature by extending political economy perspectives on natural resource governance beyond conventional value-chain analysis and introducing the NGSF as a transferable analytical framework for resource-rich economies facing similar structural transitions. It concludes that integrated governance, rather than resource endowment alone, will increasingly determine the long-term competitiveness, resilience, and sustainability of national gas systems.

National Gas System Framework (NGSF); natural gas governance; LNG; political economy

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