Government Prioritises Benefits for Aceh in Development of South Andaman Gas Block

The Ministry of Energy and Mineral Resources (ESDM) is conducting public consultations regarding the development plan for the South Andaman gas block, aiming to ensure the people of Aceh benefit from the massive discovery. Director General of Oil and Gas Laode Sulaeman stated that the government’s immediate focus is on extensive socialisation to address local concerns about whether Aceh will receive its fair share from the project. He noted a planned meeting with the Rector of Malikussaleh University to create effective communication steps, emphasising that the project’s priority is the welfare of the Acehnese people.

Responding to local hopes for onshore processing, Laode mentioned the government will seek a win-win solution, noting that a Plan of Development (POD) is already in place. This follows a recent meeting between Aceh Governor Muzakir Manaf and the President’s Special Envoy for Energy and Climate, Hashim Djojohadikusumo, to discuss strategic issues for the province’s development. The South Andaman block, operated by Mubadala Energy, is estimated to hold significant gas reserves and is targeted to begin production by 2028.

The project, with an estimated investment value of US$1.95 billion, will utilise a hybrid offshore and onshore development scheme. A Floating Production Storage and Offloading (FPSO) vessel will separate high levels of corrosive CO2 and H2S from the gas before it is transported via an 80-kilometre subsea pipeline to an Onshore Receiving Facility planned for the Arun Special Economic Zone in Lhokseumawe. SKK Migas has confirmed that a Gas Sales Agreement for 160 million standard cubic feet per day (MMSCFD) has been signed with PLN for power generation, while the remaining 140 MMSCFD from the Tangkulo field is still being marketed, with total discovered reserves in the block reaching 10 trillion cubic feet.