ASIATODAY.ID, BATAM — Indonesia has entered a new phase in its offshore energy development after construction began on FPSO Bahtera Haluan Lestari, a floating production facility expected to become the largest Floating Production, Storage and Offloading (FPSO) unit in Southeast Asia.
The milestone was marked by the First Steel Cutting ceremony at a fabrication facility in Tanjung Balai Karimun, Riau Islands, on Thursday (July 23), officially starting construction of the key production facility for the North Hub Development Project in the Makassar Strait.
The North Hub project, designated as a National Strategic Project (PSN), will develop the Geng North and Gehem gas fields in the Kutai Basin, offshore East Kalimantan. The project will become Indonesia’s first gas production development in ultra-deepwater areas, operating at depths of around 2,000 meters.
The development marks a major technological milestone for Indonesia’s upstream oil and gas sector while strengthening the country’s position as a strategic energy supplier in the Asia-Pacific region.
US$15 Billion Investment to Transform Offshore Gas Industry
The North Hub Development Project carries an estimated investment of US$15 billion, making it one of the largest offshore energy developments in Southeast Asia.
Around US$3 billion will be allocated for construction of FPSO Bahtera Haluan Lestari, while the remaining investment will support subsea production systems, drilling activities, offshore infrastructure, export pipelines, and other supporting facilities.
Head of SKK Migas, Djoko Siswanto, said the project demonstrates Indonesia’s ability to execute large-scale and technology-intensive offshore developments.
“North Hub Development will become a successful example of Indonesia’s upstream oil and gas development, delivering tangible benefits for national energy security and economic growth,” Djoko said.
He added that the FPSO is expected to become the largest in Indonesia and Southeast Asia, while ranking among the world’s largest floating production facilities.
First Ultra-Deepwater Gas Production Facility
North Hub will connect 16 subsea wells from the Geng North and Gehem fields through an integrated underwater production system linked to FPSO Bahtera Haluan Lestari.
The facility is designed to produce approximately 1,000 million standard cubic feet of gas per day (MMSCFD) and around 80,000 barrels of condensate per day.
The FPSO will also have a storage capacity of approximately 1.4 million barrels.
After processing onboard the vessel, gas will be transported through a 32-inch export pipeline to the Santan Terminal in East Kalimantan before entering Indonesia’s domestic gas transmission network.
Supporting Indonesia’s Energy Security
Indonesia views natural gas as an important transition fuel as the country expands cleaner energy sources while maintaining reliable energy supplies for economic growth.
North Hub is expected to support Indonesia’s long-term gas production ambitions, including the government’s target of reaching 12 billion cubic feet of gas production per day by 2030.
The project will supply gas for strategic sectors including electricity generation, manufacturing, and industrial development.
Creating Jobs and Expanding Local Industry
Beyond energy production, North Hub is expected to deliver significant economic benefits.
SKK Migas estimates the project will create more than 8,000 jobs for Indonesian workers and local communities.
The development is also expected to boost supporting industries, including offshore fabrication, marine engineering, logistics, transportation, manufacturing, and local services.
The government estimates the project could generate nearly US$13 billion in state revenue throughout its operational period.
Fast-Track Development Toward 2028 Production
North Hub has moved forward rapidly since receiving approval for its Plan of Development (POD I) in August 2024.
The project completed Front-End Engineering Design (FEED) in January 2025 and reached Final Investment Decision (FID) in March 2026.
Four months after the investment decision, construction entered the fabrication stage with the first steel cutting ceremony.
SKK Migas said the project will be developed under the principles of On Time, On Budget, On Scope (OTOBOS) while maintaining strict safety, environmental, and governance standards.
The project is being developed by Searah, a consortium led by Eni Indonesia and Petronas.
Director of Eni North Ganal Ltd, Mirko Araldi, said the construction milestone reflects long-term confidence in Indonesia’s energy sector.
“We are proud to be part of Indonesia’s energy future. Today’s milestone reflects our commitment to continue investing, growing, and creating value in the country,” Araldi said.
The consortium is targeting first gas production in the fourth quarter of 2028.
Indonesia’s New Offshore Energy Milestone
With North Hub entering the construction phase, Indonesia is advancing one of its most ambitious offshore gas developments.
Combining major international investment, advanced deepwater technology, and domestic industrial participation, the project is expected to strengthen Indonesia’s energy resilience while supporting Asia’s growing demand for natural gas.
North Hub is set to become a landmark project in Indonesia’s journey toward a more secure and competitive energy future. (Midwan)
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