Ecobiz.asia – Indonesia’s state-owned fertilizer and petrochemical company Pupuk Indonesia is exploring an investment of up to US$500 million to develop an ammonia hub in Batam, aiming to process domestic natural gas into higher-value products and tap growing demand for alternative marine fuels.
The proposed facility would integrate ammonia production, bunkering, distribution and trading infrastructure to serve domestic industries and international markets. Pupuk Indonesia is considering gas supplies from the Natuna region and Grissik in South Sumatra, as Indonesia’s natural gas supply contract with Singapore is due to expire in 2028.
Pupuk Indonesia President Director Rahmad Pribadi discussed the proposal with Batam Indonesia Free Zone Authority (BP Batam) Head Amsakar Achmad and his team on Nov. 2 at the authority’s office in Batam, Riau Islands.
Rahmad said the project would support the government’s efforts to prioritize domestic use of natural resources and expand downstream industries.
“President Prabowo Subianto has emphasized that natural resources are the lifeblood of our economy and must be used to strengthen it. Energy and Mineral Resources Minister Bahlil Lahadalia has similarly underscored the priority of meeting domestic needs in natural gas utilization,” Rahmad said in a statement on Thursday (Nov. 5, 2026).
As a major gas consumer, Pupuk Indonesia relies on natural gas as a key feedstock for ammonia production. The company sees the proposed hub as an opportunity to develop more domestic processing capacity while creating a new export-oriented business.
Rahmad cited Singapore’s development over the past five decades as a global oil refining and maritime services center, including its position as the world’s largest ship-bunkering hub. He said Indonesia could build similar capabilities by using its own gas resources, particularly as international shipping explores lower-carbon fuels.
The International Maritime Organization’s (IMO) proposed Net-Zero Framework is expected to encourage the adoption of low- and zero-emission marine fuels, including ammonia. Rahmad noted that countries such as Australia, Singapore and South Korea were already advancing ammonia technologies and related infrastructure.
Pupuk Indonesia said it has an annual ammonia production capacity of approximately 7.1 million tonnes, placing it among the largest producers in the Asia-Pacific and Middle East and North Africa regions.
“This is not about resource nationalism—it is about resource industrialization. We remain open to collaboration. What matters is that added value is created and retained in Indonesia,” Rahmad said.
BP Batam Deputy for Investment Fary Djemy Francis welcomed the proposal and said the authority was prepared to support the project’s development, including licensing and land allocation, once an agreement had been reached.
He said BP Batam would establish a joint team with Pupuk Indonesia to facilitate the project once it reached the investment-ready stage.
The proposed hub is part of efforts to strengthen Batam’s role as an industrial and logistics center by leveraging its location and access to regional markets. ***
