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| Tangguh UCC project |
Indonesia’s First Large-Scale CCUS Project Targets Emission Reduction and Gas Supply Expansion
Saipem has officially started construction on the Tangguh UCC project, marking a key milestone in Indonesia’s energy transition. The first steel cut took place at Saipem’s Karimun Yard, with officials from BP Indonesia and national agencies present. The project, operated by BP, will enhance gas recovery while enabling carbon capture, utilisation, and storage (CCUS).
Saipem’s Scope Covers Full EPCIC for Offshore and Onshore Infrastructure
The Tangguh UCC project includes the Ubadari field development, aiming to unlock 3 trillion cubic feet of natural gas. Saipem will handle engineering, procurement, construction, installation, and commissioning (EPCIC). The scope covers two wellhead platforms, a CO₂ reinjection platform, and 90km of subsea infrastructure.
In parallel, the project seeks to reduce emissions by capturing and storing up to 15 million tonnes of CO₂. Therefore, it positions itself as Indonesia’s first major CCUS deployment, aligned with the government's decarbonisation strategy. The UCC facilities will include three injection wells, an offshore platform, and onshore CO₂ processing units.
$7 Billion Investment to Drive LNG Expansion and Climate Goals
In November 2024, BP and its partners committed $7 billion to the Tangguh UCC project, reinforcing its national significance. The project builds on the Tangguh LNG third train, which raised capacity to 11.4 million tonnes annually. Production from Ubadari is scheduled for 2028, supplying feedstock to Tangguh LNG while mitigating carbon output.
The Karimun Yard, Saipem’s largest fabrication site, is vital to delivering this project. It reflects growing momentum for carbon capture in Southeast Asia’s natural gas sector. As a result, the Tangguh UCC project is expected to influence future infrastructure planning and low-carbon policy in Indonesia.
ScrapInsight Commentary
The Tangguh UCC project signals rising investment in low-emission natural gas infrastructure, driven by LNG demand and regional CCUS policy frameworks. For the scrap and fabrication sector, such mega-projects may increase demand for structural steel and pipeline-grade alloy scrap by 2026–2028, especially in Southeast Asia.
