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McDermott International has received a Limited Notice to Proceed (LNTP) for subsea work on Mubadala Energy’s Tangkulo gas development in Indonesia, marking a further step toward execution of one of the Andaman Sea’s most closely watched deepwater gas projects.
The Tangkulo field is located in the South Andaman Block, approximately 65 kilometres offshore North Sumatra, in water depths of around 1,200 metres. Mubadala Energy is the operator with an 80% participating interest, while Harbour Energy holds the remaining 20%.
The latest authorization allows McDermott to begin designated subsea activities ahead of the project's Final Investment Decision (FID), which Indonesia’s upstream regulator SKK Migas now expects in September 2026. The FID was originally targeted for June but was subsequently delayed by around three months.
The LNTP represents an important transition from front-end development toward project execution.
While the complete commercial value and final scope of McDermott’s work have not been publicly disclosed, the authorization is related to subsea activities for the Tangkulo development. For a deepwater gas field, such work can involve engineering and preparation associated with subsea production systems, subsea structures, flowlines, risers and other offshore infrastructure connecting the wells with the production facilities.
McDermott has previously been among the contractors competing for major subsea packages associated with Tangkulo. The latest LNTP indicates that the contractor has now secured authorization to proceed with defined work before the full project sanction.
This distinction is important: the current announcement should be regarded as an LNTP for subsea work rather than a final award of the entire Tangkulo subsea EPC/EPCI package.
The Tangkulo development is based on a major gas discovery made by Mubadala Energy in 2024.
The Tangkulo-1 exploration well was drilled approximately 65 kilometres offshore North Sumatra in around 1,200 metres of water depth. The well was drilled to a total depth of approximately 3,400 metres and encountered an 80-metre gas column. Mubadala Energy estimates the discovery contains more than 2 trillion cubic feet (Tcf) of gas-in-place.
Tangkulo is part of Mubadala Energy’s broader South Andaman gas portfolio, which also includes the Layaran discovery. Layaran-1, drilled in 2023, contains potential gas-in-place volumes of more than 6 Tcf according to Mubadala Energy. Together, these discoveries have strengthened the importance of the Andaman Sea as an emerging deepwater gas region.
The project is also strategically important for Indonesia because the gas is intended to support domestic energy requirements. In December 2025, Mubadala Energy and PLN Energi Primer Indonesia signed a Heads of Agreement concerning potential gas supply from Mubadala’s Andaman Sea fields, with Tangkulo forming part of the development strategy.
Tangkulo has been progressing through several stages of development.
Mubadala Energy previously reported strong progress on Front-End Engineering Design (FEED) and Long Lead Item (LLI) contracting, with the project initially targeting FID in June 2026 and first gas by the fourth quarter of 2028.
The project has also already attracted major international oilfield service contractors.
In February 2026, SLB announced multiple offshore drilling services contracts from Mubadala Energy covering the Tangkulo deepwater development and associated exploration and appraisal drilling. The scope includes drilling, completion and testing services across the well life cycle, with first gas targeted before the end of 2028.
The latest McDermott LNTP is another indication that procurement and engineering activities are progressing toward the larger execution phase.
Once the FID is taken, the project is expected to generate a wider range of engineering, procurement, fabrication and installation activities.
A deepwater gas development of this scale can involve multiple equipment and material packages, including:
· Subsea production systems
· Subsea structures and flowline systems
· Risers and offshore piping
· Gas processing equipment
· Pressure vessels
· Heat exchangers
· Piping and fittings
· Floating production facilities
· Gas export infrastructure
· Supporting offshore fabrication and mechanical equipment
For equipment exposed to corrosive process media, material selection becomes an important part of the engineering and procurement process.
Depending on the process conditions and equipment design, corrosion-resistant alloys such as stainless steel and nickel alloys may be selected for wetted or process-contact surfaces. In pressure vessels and heat exchangers, clad materials can provide an alternative to manufacturing the entire component from a high-cost corrosion-resistant alloy.
A clad plate combines a corrosion-resistant alloy layer with a structural base metal, allowing equipment manufacturers to use the required corrosion-resistant material on the process side while maintaining the mechanical and economic advantages of a carbon steel or low-alloy steel base.
For applications such as pressure vessels, reactors, columns and heat exchangers, stainless steel clad plates and nickel alloy clad plates can be considered where corrosion resistance is required but solid-alloy construction would result in substantially higher material costs.
Typical clad plate combinations can include carbon steel with:
· Stainless steel
· Nickel alloys
· Titanium
· Copper alloys and other corrosion-resistant materials
The final material combination, thickness, dimensions and applicable standards are determined by the equipment designer and project specification based on operating temperature, pressure, corrosion conditions and fabrication requirements.
For major offshore gas developments, these material decisions can influence both equipment reliability and overall project economics.
The McDermott LNTP comes at a particularly significant point in the Tangkulo development.
With FID now targeted for September 2026, contractors and suppliers are moving closer to the stage where engineering packages, long-lead equipment and fabrication requirements can translate into larger procurement activities.
For equipment manufacturers and material suppliers serving the oil & gas and petrochemical industries, the project is therefore worth monitoring beyond the headline subsea contract.
The broader opportunity may extend across the FPSO and gas-processing supply chain, including pressure vessels, heat exchangers, piping systems and other process equipment where corrosion-resistant materials are required.
As additional EPC, EPCI, FPSO and equipment contracts are announced following FID, the contractor and supplier landscape around Tangkulo should become increasingly clear.
FUGO TECH manufactures metal clad plates and machined components for pressure vessels, heat exchangers and other critical process equipment across the oil & gas, petrochemical and process industries. Our clad material solutions cover stainless steel, nickel alloys, titanium, copper alloys and other corrosion-resistant metals, with clad tube sheets, and clad dish heads available to project-specific requirements.
www.fugo-tech.com | sales@fugo-tech.com
Fugo Tech is focused on the manufacturing of clad metal plate and distributes the Stainless Steel, Titanium, Nickel Alloy, Zirconium and other non-ferrous metal pipes, fittings, and flanges.
