Di my previous piece, I discussed why the sequence of events currently unfolding at KEK Arun feels backwards: investors have already started arriving, while the basic precondition, namely the Andaman Block profit-sharing scheme, has only just been submitted for review. Two weeks have passed since that letter was sent, and there's still no decision. What has changed is that the list of names knocking on KEK Arun's door keeps getting longer.
What the Aceh Governor's Letter Says
For those who haven't had a chance to read the first piece: Aceh Governor Muzakir Manaf, or Mualem, sent letter number 500.16.7.2/7039 dated 25 June 2026 to President Prabowo Subianto, which was received by the Ministry of the State Secretariat on 30 June 2026.¹ This letter is a response to the approval by Minister of Energy and Mineral Resources Bahlil Lahadalia (via a letter to SKK Migas, 9 March 2026) of the Plan of Development I for the Tangkulo Field, South Andaman Working Area, using a raw gas processing scheme with floating facilities at sea, rather than onshore.¹
The letter's four main points are: the 4 percent profit share for gas and 6 percent for oil is considered too small and needs review; raw gas processing should be done onshore through KEK Arun, which has infrastructure left over from PT Arun NGL; the President is asked to direct the Minister of Energy and Mineral Resources to review that PoD I approval; and Aceh is requesting a special allocation of oil and natural gas.¹ Minister of Energy and Mineral Resources Bahlil Lahadalia himself has already responded publicly on this, though his response has not yet been a decision: while inaugurating Golkar Aceh's leadership in Banda Aceh on 11 July 2026, he said he could not yet decide because it is still under discussion and the government is looking for a scheme that benefits all parties.³
Investors Are Already Queuing
What's interesting is that investor interest in gas downstream processing at KEK Arun hasn't waited for clarity on that profit-sharing scheme to be settled first. At least four parties have expressed interest in recent months, with varying degrees of seriousness.
PT Pupuk Indonesia (Persero), through President Director Rahmad Pribadi, announced plans to build two methanol plants, one in Aceh and one in East Kalimantan, to meet national biodiesel needs. This was conveyed at a working meeting with Commission IV of the House of Representatives at Senayan, 7 April 2026.² This is the strongest signal among all those that have come in, because it was delivered by a state-owned enterprise that already has a real presence in Aceh through PT Pupuk Iskandar Muda, in an official forum at the House of Representatives, not just a letter of interest.
About three weeks later, a Dubai-based company engaged in energy trading and oil and gas project development sent a letter to the Aceh Governor, 26 April 2026, expressing interest in building a methanol plant.² As of mid-July, I haven't found any further reporting on concrete follow-up to this interest.
PT Indoasia Oiltank Terminal has gone a step further. Its board of directors met directly with the Aceh government at the governor's office, 13 July 2026, received by Aceh Regional Secretary M. Nasir Syamaun.² One of its shareholders, Mohamad Bawazeer, is the head of Indrillco Group and also chair of the Saudi Arabia Bilateral Committee at Kadin Indonesia, so he's no newcomer to the national business world. What makes this move feel more serious: the company came together with partners from the Chemical Engineering department at Syiah Kuala University, involving three professors. Aceh's Regional Secretary himself called this "a sign of good faith" because it brings an impact to local universities, not just a standalone project.²
Most recently, a company based in Jiangsu, China, sent a similar letter to the Governor of Aceh on 8 July 2026, partnering with a national company in Jakarta, interested in developing an LNG liquefaction project at KEK Arun.² This is the newest and least detailed of everything I've mentioned above.
Serious Interest or Just Window-Shopping
If I rank these by signal strength, Pupuk Indonesia is clearly the most serious, given its status as a state-owned enterprise with an operational track record in Aceh, and its statement was delivered directly to the House of Representatives, not through a letter intermediary. Indoasia Oiltank Terminal sits in second place, having met directly with the government and brought in a local academic institution, two steps that take more effort than simply writing a letter of interest. The other two, the Dubai-based company and the Jiangsu-based company, are for now still at the letter-of-interest stage, which in the oil and gas investment world is the earliest and cheapest step anyone can take. That doesn't mean they aren't serious, but there isn't yet enough public evidence to conclude their seriousness goes beyond that stage.
The appeal behind all this interest is clear: reserve potential in the Andaman area, which has six oil and gas blocks, namely Andaman I, II, III, Central Andaman, South Andaman, and South West Andaman.² The initial phase will start from the Tangkulo Gas Field in the South Andaman Working Area managed by Mubadala Energy, with projected production of around 300 MMSCFD, of which 160 MMSCFD is already committed for sale to PLN through a Gas Sale Agreement.¹ The remaining roughly 140 MMSCFD is what's being contested for downstream industry. The South Andaman field itself is estimated to produce around 7,500 barrels of condensate per day, feedstock for naphtha, kerosene, and gasoline.¹
Good News for Aceh?
This is where I want to urge some caution in reading this enthusiasm. The number of investors eyeing KEK Arun is a signal that the Andaman Block's potential is real, not an empty promise. But a large number of investors doesn't automatically mean the added value will stay in Aceh.
Taman Iskandar Muda, an Acehnese community association in Jakarta, once protested in front of the Ministry of Energy and Mineral Resources demanding the cancellation of the PoD I approval for the Tangkulo Field, arguing that the approved profit-sharing scheme contradicts the spirit of Article 33 of the 1945 Constitution.² According to its chairman, Muslim Armas, under the already-approved PoD I scheme, the state receives a 4 percent share of gas from the South Andaman Block, and Aceh gets only 1.2 percent of that 4 percent portion, while the contractor gets 96 percent.² I haven't been able to independently verify these figures from the original PoD document, so I'm presenting them as a claim voiced by Taman Iskandar Muda, not a fact I've confirmed myself. But this 4 percent gas profit-sharing figure is consistent with what the Aceh government itself stated in its letter to the President.¹
That means, as long as the profit-sharing scheme and processing location haven't been decided anew, every piece of news about a new investor should be read as an indication of market potential, not as certainty that Aceh will enjoy the added value. The same condensate and gas could just as easily be processed at an offshore floating facility, rather than onshore through KEK Arun, if the already-approved PoD I isn't revised. If that happens, most of the investors I've mentioned above will likely still come in, it's just that the point of added value may not be in Lhokseumawe.
Jakarta Hasn't Said Yes, Hasn't Said No
Bahlil has technical reasons for caution. Mubadala's gas discovery lies more than 12 nautical miles out, and building a pipeline to shore demands a large investment. If forced through, he says, the gas price could rise above US$10 per MMBtu, a figure that would be a heavy burden for investors.³ About ten days later, the Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, Laode Sulaeman, added that the central government is prioritizing outreach to the Acehnese public first, before moving on to the next development stage.⁴
What's more interesting comes from a study published by Bisnis.com this past weekend. Director of the Center for Public Policy, Sofyano Zakaria, warned that if this difference of views drags on, the South Andaman Block's 2028-to-2030 onstream target could slip.⁴ Padjadjaran University energy observer Yayan Satyakti, on the other hand, argues this onshore-versus-offshore debate is somewhat off the mark, since the currently running PoD I design has actually already combined an FPSO with an Onshore Receiving Facility. According to him, the real issue isn't whether an onshore facility exists or not, but how much processing is done onshore. He even calculates that this project is repeating the delay pattern of the Masela Block; every year the final investment decision is postponed could add roughly US$156 million in costs.⁴
So this is the situation now. Investors keep queuing up, Jakarta hasn't given a firm yes or no, and there's an explicit warning from observers that this slowness carries its own cost. All parties appear to agree on seeking a middle ground, but none has yet dared to set a deadline.
Closing
The queue of investors at KEK Arun is real, and some of it is convincing enough to be taken seriously, especially the moves by Pupuk Indonesia and Indoasia Oiltank Terminal. But the more important question for Aceh isn't how many investors are eyeing it, but whether that 25 June letter will get a response before more technical decisions are made in Jakarta. The reversed order I described in my previous piece still hasn't been corrected, and investors won't wait for that to be resolved. And is KEK Arun Lhokseumawe truly getting its house in order and ready to receive a positive response from the central government? We'll discuss that in another piece soon.
Sumber dan rujukan:
- Beritasatu.com (6 Juli 2026), “Mualem Surati Prabowo, Ini 4 Usulan Aceh Soal Gas Blok Andaman.”
- Beritasatu.com (15 Juli 2026), “KEK Arun Aceh Jadi Magnet Investasi Hilirisasi Gas Blok Andaman.”
- Beritasatu.com (12 Juli 2026), “Bahlil Belum Bisa Putuskan Gas Blok Andaman Diolah di KEK Arun.”
- Bisnis.com (28 Juli 2026), “Mewaspadai Risiko Kasus Blok Masela Terulang di Proyek Gas Andaman.”
Leave a Reply