Bahlil on Andaman Block Gas Processing: We Seek a Win-Win Solution

Minister of Energy and Mineral Resources Bahlil Lahadalia has confirmed that the government has not yet decided on a gas processing scheme for the Andaman Block, as it is still weighing the economic costs and benefits. The Aceh regional government has been pushing for the gas to be processed onshore at the Arun Lhokseumawe Special Economic Zone. “I cannot decide yet because it is still under discussion. We must find a win-win solution regarding Aceh’s request. We cannot say A if the cost is too high,” Bahlil said in Banda Aceh on Saturday, 11 July 2026. Bahlil stressed that gas management ultimately comes down to business. If the economic calculations are deemed adequate, Aceh’s request for processing at the Arun SEZ can be considered. Conversely, if the economics are burdensome, an onshore processing scheme may be difficult to enforce. “Because no business will end up at a loss. Everyone must profit. Profitable for the people of Aceh in terms of revenue, profitable for the investor. And we can share that revenue,” Bahlil stated. Mubadala Energy has discovered gas reserves offshore in the Andaman Block, with initial production targeted at 300 million standard cubic feet per day. Aceh Governor Muzakir Manaf has written to President Prabowo Subianto and the Energy Minister requesting that the gas be managed via an onshore receiving facility at KEK Arun, rather than a floating production, storage, and offloading vessel. The Aceh administration also requested that the gas be allocated for local industry and that the Plan of Development be temporarily postponed. Bahlil explained that the gas discovery is located more than 12 nautical miles offshore, meaning a pipeline would require significant investment, potentially pushing gas prices above US$10 per MMBTU and making it uncompetitive. He noted that a portion of the planned production is intended for PLN and for the Pupuk Iskandar Muda fertiliser plant in Aceh, which currently relies on LNG sourced from Papua, Sulawesi, and Kalimantan. Bahlil added that as Mubadala Energy holds the concession, the government must ensure sustainability and a positive impact on the welfare of the Acehnese people, including through profit-sharing.