Abu Dhabi-based Mubadala Energy has signed an initial deal with PLN Energi Primer Indonesia (PLN EPI), a subsidiary of state-owned electricity company PT PLN, to supply gas in a move expected to boost the Asian country's energy sector.
The two firms signed a heads of agreement, under which Mubadala Energy would use supply from its gasfields in the Andaman Sea, a company statement on Monday read.
The proposed deal would prioritise energy for North Sumatra and Aceh, including from Tangkulo gasfield, which is being developed by Mubadala Energy, a subsidiary of Mubadala Investment Company.
Tangkulo lies about 65 kilometres off North Sumatra, with more than two trillion cubic feet of gas in place.
“This agreement reflects our ... commitment to Indonesia’s energy future," said Abdulla Bu Ali, president director of Mubadala Energy Indonesia. "This is also an important step for our development plans of the Tangkulo gas project in the South Andaman Sea."
Mubadala Energy, which has been operating in Indonesia since 2004, last month said it had made "significant progress" in Tangkulo development plans. The project is "advancing ahead of schedule", with the final investment decision expected by June 2026 and first gas by the fourth quarter of 2028, it said.
The Tangkulo discovery was made in May last year and the well was drilled to a depth of 3,400 metres in 1,200 metres of water, in what was Mubadala Energy’s second consecutive deepwater gas discovery. The company also found gas at Layaran in the South Andaman block.
Indonesia is seeking to boost domestic use of gas following discoveries in the Andaman and North Bali-Lombok blocks. The country, one of the world's largest coal exporters, also plans to generate at least 51 per cent of its energy from renewable sources by 2030.
Under the proposed partnership, Mubadala Energy and PLN EPI will seek to help Indonesia reduce reliance on liquefied natural gas and develop sustainable solutions to address growing domestic demand, the statement said.
Following the heads of agreement, the companies will hold further discussions on technical and commercial frameworks.
“PLN EPI continues to support the development of new gasfields in Indonesia and welcomes the development of the Tangkulo gasfield in the South Andaman Block by Mubadala Energy," said Rakhmad Dewanto, president director of PLN EPI.
"This collaboration is also part of the development of a gas supply portfolio for the power sector to support energy security and the energy transition in Indonesia.”
