Indonesia has commenced construction of the Makassar Strait North Hub, a $15 billion national strategic energy project designed to develop ultra-deepwater natural gas reserves and strengthen the country’s energy security while driving long-term economic growth.
Upstream oil and gas regulator SKK Migas stated that the megaproject represents one of the largest foreign and domestic investments in Indonesia’s energy sector.
“It opens up opportunities for the application of new technology and investment in domestic oil and gas fabrication development,” Indonesia’s SKK Migas head Djoko Siswanto said during the first steel-cutting ceremony for the project’s Floating Production, Storage, and Offloading (FPSO) facility in Karimun Regency, Riau Islands.
Operated by Searah, a joint venture between Italian energy giant Eni SpA and Malaysia’s Petronas, the project integrates the offshore Geng North and Gehem gas fields in the Kutai Basin off East Kalimantan.
According to the statement, the total investment for the project reaches $15 billion, consisting of $3 billion for FPSO construction and $12 billion in additional capital expenditure.
The FPSO unit, named Bahtera Haluan Lestari, is designed to process up to 1 billion standard cubic feet of gas per day (BSCFD) and 80,000 barrels of condensate per day, featuring a storage capacity of 1.4 million barrels.
“We hope this project will not only assist but also become a driving force in achieving our production targets for 2029-2030, reaching 900,000 to 1 million barrels of oil per day and 12 billion cubic feet of gas per day,” Djoko added.
Operating at sea depths of up to 2,000 meters, the 300-meter-long vessel marks Indonesia’s first ultra-deepwater production facility. First gas output is targeted for the fourth quarter of 2028.
Topside module fabrication is centered at the Saipem yard in Tanjung Balai Karimun and spread across Batam and Bintan. The construction phase utilizes 4,000 tons of steel and is expected to create 8,000 local jobs, as per the statement.
