SKK Migas hopes UAE firm will expedite South Andaman gas project

SKK Migas Confident in Mubadala Energy to Fast-Track South Andaman Gas Development

The Upstream Oil and Gas Regulatory Task Force (SKK Migas) is confident that the UAE’s Mubadala Energy, like ENI, which recently approved its development plan, can accelerate the development of gas power in the South Andaman block. POD).

In the past year, Mupadala Energy has discovered significant gas reserves, including 6 trillion cubic feet (tcf) in the Layran-1 well and 2 Tcf in the Tangulo-1 well.

Dwi Soetjipto, chairman of SKK Migas, expressed confidence that the POD for the South Andaman gas project would be approved by the end of this year.

As quoted by katadata.co.id on August 29, 2024, TV said in a statement, “The work in South Andaman may be more complicated as these gas reserves are in deep water and there is no infrastructure at present.”

Despite the lack of existing infrastructure, the South Andaman project could use the nearby Arun liquefied natural gas (LNG) plant in Aceh, TV noted.

However, he noted, “the old plant may not be suitable for reactivation.”

Earlier, Twi said Mupadala Energy is currently developing a POD scenario for oil and gas in the area.

“The target is to complete this POD in October 2024,” TV said during a meeting in Jakarta on August 14, 2024.

TV explained that Mupadala is still figuring out all aspects of the development plan for the South Andaman work area, such as the need for platforms to support production output.

“An LNG plant should be built to transport gas to Sumatra. We are also taking into account the industrial requirements,” he added.

Dwi noted that to ensure the success of South Andaman field production, SKK Migas is currently conducting a study to revive the Arun LNG plant, which will be used to enable gas production from South Andaman.

In an effort to replace the province’s ageing infrastructure, the government announced earlier this year that it will construct a new LNG facility in Aceh.

January 11, 2024: “All the equipment at the Arun plant cannot be used,” stated Tutuka Ariadji, the Ministry of Energy and Mineral Resources’ director general of oil and gas, at his Jakarta office.

The plan to build the new plant emerged when Energy Minister Aribin Tasrif said the Arun LNG plant could not accommodate gas power in Aceh.

Historically, natural gas production in North Sumatra has been going on for decades, with the Arun field beginning to flow in the early 1970s. At the time, American company Mobil Oil (later ExxonMobil Oil) conducted the drilling, and most of the gas production was exported to Japan and South Korea.

The rest was used for the Iskandar Muda fertilizer plant and power generation. For years, the Arun LNG plant has been idle due to lack of gas supply.

The announcement by the government in 2022 of a massive gas finding in North Aceh, encompassing the Andaman block, was welcome news.

Duduka stated that any entity is able to take on the development of an LNG facility.

“It could be Mubadala, it could be anybody,” he said.