SKK Migas: North Hub Project in Makassar Strait to Strengthen Energy Security

The North Hub Development Project in the Makassar Strait, a national strategic upstream oil and gas project, will strengthen national energy security while driving economic growth, according to the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas). Speaking at the first steel cutting ceremony for the construction of a Floating Production, Storage and Offloading (FPSO) facility in Karimun, Riau Islands, on Tuesday, SKK Migas Head Djoko Siswanto said the project is one of the largest oil and gas investments currently being developed in Indonesia. He added that it opens up opportunities for the application of new technology and investment in domestic oil and gas fabrication development. The success of the domestic fabrication industry in meeting the challenges of this large-scale project, he noted, is clear evidence that high-level technology can be implemented in Indonesia. The North Hub Development Project in the Makassar Strait is a strategic offshore gas development project run by Searah, a joint venture between Eni SpA and Petronas. The project continues previous development efforts by the Italian multinational energy company Eni. It integrates the development of the Geng North and Gehem fields in the Kutai Basin, offshore East Kalimantan, with a total investment value of approximately USD 15 billion, comprising USD 3 billion for the FPSO construction and the remaining USD 12 billion for other capital expenditures. The FPSO Bahtera Haluan Lestari used in this project is designed to process up to 1 billion standard cubic feet of gas per day and 80,000 barrels of condensate per day, with a storage capacity of 1.4 million barrels. ‘The hope is that this project will not only assist but become a driving force for our production targets in 2029-2030, to reach 900,000 to 1 million barrels of oil per day and 12 billion standard cubic feet of gas per day,’ he said. The fabrication of the FPSO topside modules is being carried out across four locations in the Riau Islands—Batam, Tanjung Balai Karimun, and Bintan—with an estimated total steel weight of 4,000 tonnes, creating 8,000 national jobs during construction. Djoko stated that the North Hub Development is being built at a water depth of 2,000 metres, with a length of 300 metres and a width of 45 metres, making it the first production facility in Indonesia’s ultra-deep waters. This development, he said, is a crucial part of efforts to provide new gas supply sources for Indonesia by utilising deep-sea gas potential. The project is targeted to begin its first gas flow in the fourth quarter of 2028. A key phase in the Kutai North Hub field development is the commencement of the construction of the topside module for the floating production, storage, and offloading vessel, centred at the Saipem fabrication facility in Tanjung Balai Karimun, Riau Islands. He expressed hope that cross-sector collaboration among ministries, relevant agencies, local governments, Searah, and involved partners can be executed well, ensuring that every project stage proceeds safely, on time, and with quality. By upholding these principles, the North Hub Development Project will become a successful example of Indonesia’s upstream oil and gas development, delivering tangible benefits for national energy security and the economy.