Tuban, East Java, June 26 -- Indonesia will redirect liquefied natural gas (LNG) from its central and eastern islands to power industrial hubs in Java, as declining production triggers regional price surges and threatens widespread factory layoffs.

Energy and Mineral Resources Minister Bahlil Lahadalia announced the strategy on Thursday following the inauguration of a mini LNG plant in Tuban, East Java.

The move targets manufacturing sectors in West Java, Banten, and Jakarta, where a drop in localized gas lifting has choked pipeline supplies and driven up operational costs.

To prevent an industrial crisis, the government will tap fields in Maluku, Sulawesi, Papua, and Kalimantan. Despite the domestic reallocation, Bahlil guaranteed tha...