Natural Gas as the Backbone of the ...

Natural Gas as the Backbone of the Energy Transition

Discourse on the energy transition is often caught between the ambition of decarbonization and the very real, ever-rising demand for energy. It is widely acknowledged that today's primary energy supply cannot be met instantly by relying on new and renewable energy (NRE) alone. After several years in which global energy stakeholders were fixated on accelerating the development of renewables, investment and policy direction in the sector are now shifting: oil and natural gas (migas) are once again drawing significant attention. This is not, in fact, a retreat from climate commitments, but rather a more realistic recalibration grounded in current conditions. Based on that reality, policymakers and upstream oil and gas industry players are affirming that energy security and decarbonization must move forward together as a mutually reinforcing whole, with natural gas positioned as the backbone for meeting both today's and tomorrow's energy needs.

This view was affirmed by Hiroyuki Mori, Executive Vice President and board member of the Japan Organization for Metals and Energy Security (JOGMEC), speaking at the session "Energy Transition at the Crossroads: Urgency, Reality, and the Road Ahead" at the IPA (Indonesian Petroleum Association) Convention and Exhibition 2026, held recently in Jakarta. According to him, current conditions do not represent a slowdown in the energy transition but rather a structural recalibration in which investment in clean energy and in the oil and gas sector are growing in parallel, driven by the tension between climate ambitions and the uncertainty of global energy supply. This view forms an important foundation for the argument that oil and gas and renewable energy are not competing poles but complementary elements.

Meanwhile, based on analysis from WoodMac presented at the same session, natural gas is now projected to serve as the backbone, contributing up to 30 percent of the primary energy mix in Southeast Asia by 2050. This figure reflects the region's structural dependence on natural gas to maintain energy supply stability throughout the ongoing transition era.

Although Indonesia is known to hold massive renewable energy potential-reaching 3,687 gigawatts and spread across the entire country-tapping that potential will take time; it cannot happen instantly. Yet the country's industrial sectors today still urgently need a stable energy supply. For that reason, natural gas is considered a buffer against potential supply shocks as renewable energy use is scaled up gradually to meet future energy-mix targets. Price affordability and supply reliability are also critical factors for any nation pursuing economic growth.

Adding to this view, Yuzaini Md Yusof, President Director & Country Chairman of Petronas Indonesia, who also spoke at the session, stressed the importance of a realistic approach. "We recognize that the energy transition cannot be approached in a uniform way. We need to take a differentiated approach that prioritizes energy security and affordability. This is critical while progressively reducing emissions," he said.

He added that Petronas has positioned natural gas as a key pillar of energy for the future. "We need to be clear-eyed about natural gas as a transition fuel, and Petronas believes gas and LNG (liquefied natural gas) are the way forward." This commitment also shapes the company's future strategic portfolio direction. "Going forward, we plan to strategically reposition our portfolio toward a more gas-weighted production mix, transitioning from our current roughly 50/50 oil-and-gas split to a more gas-driven portfolio, 25 percent oil and 75 percent natural gas by 2035," Yuzaini added.

Through this framework, natural gas is proving to remain a pillar of economic resilience, one that ensures global emissions-reduction ambitions can be achieved without sacrificing development stability in Indonesia and across Southeast Asia. (*)