Mubadala Energy, an energy company based in the United Arab Emirates, has entered into a preliminary agreement to supply natural gas to Pupuk Indonesia, the state-owned fertilizer producer, according to several media reports.

Under the terms of the initial deal, Mubadala Energy will supply 115 million standard cubic feet per day (mmscfd) of gas to Pupuk Indonesia's methanol plant and 85 mmscfd to its ammonia facility. The agreement was revealed during an industry conference hosted by the Indonesia Petroleum Association, several media reports said.

The gas will be sourced from Mubadala Energy’s South Andaman Block, where production is expected to begin by late 2028. The supply is scheduled to start once the Tangkulo-1 well becomes operational, according to several media reports.

Mubadala Energy previously announced a significant gas discovery at the Tangkulo-1 exploration well in 2023. Located about 100 kilometers (62 miles) off the northern coast of Sumatra, the South Andaman Block is estimated to hold more than 2 trillion cubic feet (tcf) of gas-in-place, several media reports said.

The Tangkulo-1 find follows an earlier discovery at the Layaran-1 well, also situated in the South Andaman Block. The Layaran-1 well is believed to contain more than 6 tcf of gas-in-place, making it one of the world’s most substantial deepwater gas discoveries of 2023, according to several media reports.

The agreement between Mubadala Energy and Pupuk Indonesia marks a strategic step toward strengthening Indonesia’s domestic gas supply for industrial use. Once production begins, the gas is expected to support Pupuk Indonesia’s operations and broader energy needs.

This deal also underscores Mubadala Energy’s growing footprint in Southeast Asia and its commitment to supporting energy security and sustainability in the region. According to several media reports, these discoveries in the South Andaman Block could play a significant role in meeting future energy demand, both domestically and regionally.

While the agreement is still in its initial phase, the scale of the gas reserves and the strategic collaboration signal the potential for long-term partnerships between the UAE and Indonesia in the energy sector, several media reports noted.

The development of the South Andaman Block is anticipated to contribute significantly to Indonesia's energy goals and enhance regional cooperation in energy resource development, according to several media reports.