Andaman Gas Must Be Optimised for Aceh's Progress, Says Expert

An energy economist from Pertamina University, A Rinto Pudyantoro, has advised that the utilisation of gas production from the Andaman Block discovery should support the progress and welfare of the people of Aceh. “The development of the Andaman block is not merely an energy project, but an opportunity for Aceh to improve its economic structure,” he said in a statement in Banda Aceh on Friday. Rinto stated that the success of the Andaman project should not be measured solely by the size of the upstream oil and gas investment, the number of wells drilled, or the volume of gas produced. The measure of the project’s success, he continued, is how many new industries are born, how many young Acehnese obtain quality jobs, how many local companies upgrade their capabilities, and how much the improvement in community welfare can be tangibly felt. Minister of Energy and Mineral Resources Bahlil Lahadalia has approved the Plan of Development (PoD)-1 for the Tangkulo field in the South Andaman Working Area. The Tangkulo field is estimated to be capable of producing around 300 million standard cubic feet of gas per day (MMSCFD). An initial gas sales commitment of 160 MMSCFD has been agreed upon for PT PLN (Persero). In the PoD-1 phase, the Andaman project will utilise a hybrid offshore-onshore development concept. Gas produced from offshore wells will first be processed using a Floating Production Storage and Offloading (FPSO) vessel. The clean gas will then be channelled through an approximately 80-kilometre subsea pipeline to an Onshore Receiving Facility (ORF) to be built in the Arun Special Economic Zone (KEK), Lhokseumawe. The Aceh government has conveyed that the Andaman gas must not be viewed solely as a source of revenue sharing funds, but also as an opportunity for industrial and economic development in the region. Rinto assessed that the Aceh government’s view is highly visionary and deserves attention, because regions that successfully escape dependence on natural resources are not just those that receive royalties or revenue sharing. “Regions that successfully escape dependence on natural resources are those that manage to build downstream industries, expand job opportunities, develop local companies, and improve the quality of human resources,” he said. According to him, Aceh possesses capital that many other provinces lack to build its industry and economy. For instance, the existence of the Arun Lhokseumawe Special Economic Zone provides a strong foundation for gas-based industrial development. Furthermore, port infrastructure, industrial estates, utility networks, human resource experience, and proximity to international shipping lanes are high-value assets. “If combined with a long-term gas supply, this area has the potential to develop into a centre for the methanol, ammonia, petrochemical, hydrogen, and other basic chemical industries,” Rinto Pudyantoro concluded.