Abu Dhabi-headquartered Mubadala Energy and PLN Energi Primer Indonesia have formalised a Heads of Agreement to supply natural gas from the Andaman Sea, a step set to reshape Indonesia's energy supply landscape. The arrangement centres on output from the Tangkulo gas field, located roughly 65 kilometres off North Sumatra, which is estimated to hold over two trillion cubic feet of gas-in-place.

Under the pact, resources from Tangkulo will prioritise gas deliveries to North Sumatra and Aceh, with long-term plans to support broader national electricity needs. Mubadala Energy expects to finalise a Plan of Development for Tangkulo imminently, and aims to deliver first gas by the fourth quarter of 2028, indicating accelerated development momentum. The collaboration aims to reduce Indonesia's reliance on imported LNG by tapping domestic gas reserves and supporting the country's shift towards cleaner, locally sourced energy.

According to Mubadala Energy's Indonesia head, Abdulla Bu Ali, the agreement underscores the company's commitment to contributing to the nation's energy security and future power requirements, and marks an important milestone for the Tangkulo project's development trajectory. The cooperation with PLN EPI and support from regulators will guide further technical and commercial discussions, paving the way for detailed supply contracts once the field is developed.

Indonesia's electricity demand is projected to grow at an average 5.3 per cent per year through 2034, increasing pressure on the government and energy providers to expand capacity and diversify supply sources. Gas from Andaman Sea fields represents a strategic domestic resource that can help meet that demand while easing dependence on global LNG markets and supporting the nation's energy transition goals.

As operator of the South Andaman gross-split PSC and a 40 per cent stakeholder in the Central Andaman block, Mubadala Energy has emerged as the largest acreage holder in the basin, following its 2023 discovery at the Layaran gas field and the subsequent Tangkulo discovery in 2024. Each discovery added significant contingent gas volume and underscored the basin's potential as a major future gas producer for Indonesia.

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