Enhancing Small-Scale LNG supply Chains: Risk mitigation strategies and frameworks for archipelagic distribution

Abstract

The distribution of Small-Scale Liquefied Natural Gas (SS-LNG) across Indonesia’s archipelagic regions faces complex challenges due to limited infrastructure, remote geographical conditions, and operational as well as maritime safety risks. This study aims to develop a risk-based SS-LNG supply chain scheme integrated with mitigation strategies to enhance the reliability and sustainability of energy supply. Employing the Delphi method, the research engaged 32 experts from academic and industrial sectors to reach a consensus on supply chain schemes, activities, and risk mitigation strategies. Validation results identified a model comprising multi-source routes, small-scale vessels, terminal clustering, and contractual flexibility as the most adaptive to Indonesia’s geographical characteristics. To minimize risks associated with each activity, a comprehensive mitigation strategy was formulated, encompassing: work practice adjustments, development of early warning systems, establishment of alternative routes, contingency planning, optimization of order policies, and enhancement of supply flexibility. The research highlights the importance of integrating technical, regulatory, and sustainability aspects in designing SS-LNG supply chains. The findings contribute to the formulation of adaptive energy policies and open avenues for further empirical implementation and long term economic evaluation. The unique contribution of this study lies in its application of a contextualized risk-based approach tailored to Indonesia’s geography, alongside innovations in terminal clustering, multi-source LNG integration, swap mechanisms, and the incorporation of real-time monitoring technologies to ensure efficiency and transparency across all stages of SS-LNG distribution.