Insights into Small-Scale LNG Supply Chains for Cost-Efficient Power Generation in Indonesia

Mujammil Asdhiyoga Rahmanta (), Anna Maria Sri Asih, Bertha Maya Sopha, Bennaron Sulancana, Prasetyo Adi Wibowo, Eko Hariyostanto, Ibnu Jourga Septiangga and Bangkit Tsani Annur Saputra
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Mujammil Asdhiyoga Rahmanta: PT. PLN (Persero) Puslitbang Ketenagalistrikan (Research Institute), Jl. PLN Duren Tiga No. 102, Pancoran, Jakarta 12760, Indonesia
Anna Maria Sri Asih: Department of Mechanical and Industiral Engineering, Universitas Gadjah Mada, Jl. Grafika No. 2, Yogyakarta 55281, Indonesia
Bertha Maya Sopha: Department of Mechanical and Industiral Engineering, Universitas Gadjah Mada, Jl. Grafika No. 2, Yogyakarta 55281, Indonesia
Bennaron Sulancana: PT. PLN (Persero) Puslitbang Ketenagalistrikan (Research Institute), Jl. PLN Duren Tiga No. 102, Pancoran, Jakarta 12760, Indonesia
Prasetyo Adi Wibowo: PT. PLN (Persero) Puslitbang Ketenagalistrikan (Research Institute), Jl. PLN Duren Tiga No. 102, Pancoran, Jakarta 12760, Indonesia
Eko Hariyostanto: PT. PLN (Persero) Puslitbang Ketenagalistrikan (Research Institute), Jl. PLN Duren Tiga No. 102, Pancoran, Jakarta 12760, Indonesia
Ibnu Jourga Septiangga: Department of Mechanical and Industiral Engineering, Universitas Gadjah Mada, Jl. Grafika No. 2, Yogyakarta 55281, Indonesia
Bangkit Tsani Annur Saputra: Department of Mechanical and Industiral Engineering, Universitas Gadjah Mada, Jl. Grafika No. 2, Yogyakarta 55281, Indonesia

Energies, 2025, vol. 18, issue 8, 1-29

Abstract: This study demonstrates that small-scale liquefied natural gas (SS LNG) is a viable and cost-effective alternative to High-Speed Diesel (HSD) for power generation in remote areas of Indonesia. An integrated supply chain model is developed to optimize total costs based on LNG inventory levels. The model minimizes transportation costs from supply depots to demand points and handling costs at receiving terminals, which utilize Floating Storage Regasification Units (FSRUs). LNG distribution is optimized using a Multi-Depot Capacitated Vehicle Routing Problem (MDCVRP), formulated as a Mixed Integer Linear Programming (MILP) problem to reduce fuel consumption, CO 2 emissions, and vessel rental expenses. The novelty of this research lies in its integrated cost optimization, combining transportation and handling within a model specifically adapted to Indonesia’s complex geography and infrastructure. The simulation involves four LNG plant supply nodes and 50 demand locations, serving a total demand of 15,528 m 3 /day across four clusters. The analysis estimates a total investment of USD 685.3 million, with a plant-gate LNG price of 10.35 to 11.28 USD/MMBTU at a 10 percent discount rate, representing a 55 to 60 percent cost reduction compared to HSD. These findings support the strategic deployment of SS LNG to expand affordable electricity access in remote and underserved regions.

Keywords: small-scale LNG; LNG supply chain; LNG inventory; floating storage regasification unit; multi-depot capacitated vehicle routing problem; MILP (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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