First Steel Cutting for FPSO BHL Commences, Onstream Target Set for Q4 2028
The first steel cutting for the Floating Production, Storage and Offloading (FPSO) vessel Bahtera Haluan Lestari (BHL) officially began on Thursday (23 July 2026). The milestone marks the start of fabrication of the FPSO’s main structure, which will form part of the North Hub Development Project in the Makassar Strait, with operations targeted to commence onstream in the fourth quarter of 2028.
Djoko Siswanto, Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), said the start of fabrication shows the project has entered the construction phase after completing major engineering work. North Hub is an integrated development of the Geng North and Gehem fields in the Kutai Basin, offshore East Kalimantan, which is targeted to become one of the pillars of national gas supply.
“Today we mark another important milestone, namely the first steel cutting for the topside of the FPSO Bahtera Haluan Lestari. This activity marks the start of fabrication of the FPSO’s main structure and also shows that the major engineering phase has progressed sufficiently to allow the construction phase to begin,” Djoko said in the Riau Islands.
He explained that North Hub is one of the national strategic projects, with an investment value of around US$15 billion. The project includes the construction of 16 development wells, a subsea production system, the FPSO, an offshore condensate offloading system, a 32-inch-diameter gas export pipeline, and gas receiving facilities at the Santan Terminal. The FPSO will have gas processing capacity of 1 billion cubic feet per day, condensate processing capacity of 80,000 barrels per day, and storage capacity of up to 1.4 million barrels.
Djoko said the North Hub project continues to progress on schedule. Following the discovery of gas reserves, the project completed its Plan of Development (POD) in 2024, Front End Engineering Design (FEED) in 2025, and the Final Investment Decision (FID) in March 2026, before entering the FPSO fabrication stage this year.
Mirko Araldi, Chief Executive Officer of Searah North Ganal, said the FPSO Kutai North is targeted to begin production in 2028, or less than three years after the final investment decision. According to him, the facility will be the largest FPSO in Indonesia and Southeast Asia, with gas processing capacity of 1 BCFD, a length of 350 metres, and a weight of around 147,000 metric tonnes.