Italian energy giant Eni has won approval for the integrated development of two gas fields that will create a new production base in the Kutei Basin off the coast of Indonesia, allowing the company to boost its gas reserves.
FPU Junkrik; Source: Eni
Indonesian authorities have approved Eni's Plan of Development (POD) for the Gen North (North Ganar PSC) and Gehem (Rapaq PSC) fields, the development of which is expected to create a new production northern hub in the Kutei Basin.
The project will develop 5 trillion cubic feet (tcf) of gas and 400 million barrels of condensate from the Geng North discovery, announced in October 2023, and 1.6 tcf from the nearby Gehem discovery via subsea wells, flowlines and a newbuild FPSO with processing capacity of approximately 1 bcf of gas and 80,000 barrels of condensate per day and storage capacity of 1 million barrels.
The gas will be processed on board the FPSO and then pipelined to the onshore receiving facility at the Santan Terminal and the East Kalimantan Pipeline Network, while it will be partially liquefied at the Bontang LNG facility and partially pipelined to the domestic market, while the condensate production will be stabilized and stored on board the FPSO and then discharged by shuttle tanker.
Additionally, Indonesian authorities have also given full approval to the POD covering the Gendaro and Gandang fields (Ganar PSC). The project envisages developing Ganar PSC's cumulative 2 tcf gas reserves through an offshore field linked to the Floating Production Unit (FPU) Jangklik. The Italian energy company claims that the project will extend Jangklik's gas production plateau, which is approaching 750 mmscf/d, by at least 15 years.
Having been awarded a 20-year extension to its IDD licenses, Ganar and Lapak, the company plans to leverage synergies with its existing facilities in the region, such as the Bontang LNG plant and FPU Jangkulik, to establish production of approximately 2 billion cubic feet per day of gas and 80,000 barrels per day of condensate in the East Kalimantan region for domestic and overseas markets.
Eni CEO Claudio Descalzi commented: “The approval of the Northern Hub and Gendaro & Gandang development plans by the Indonesian authorities marks an important milestone towards a final investment decision on both gas projects, in line with our decarbonization and energy security strategy. The establishment of a new production hub in the Kutei Basin marks a major turning point for Eni in Indonesia.”
“This is the result of a consistent strategy combining our proprietary exploration skills with the acquisition of IDD and Neptune's assets, which has given us today a strong leadership position in a world-class basin close to our existing facilities and very important markets. Our strategic partnership with the Indonesian authorities has been pivotal in reaching these important milestones just a few months after the Gen North discovery and the completion of the IDD and Neptune acquisition process.”
Eni said the new developments, along with the ongoing development of the East Melakes and Maha fields, are the result of a close strategic partnership with SKK Migas and that, in addition to securing gas for domestic consumption, these projects are expected to have a “significant positive impact” on local content while increasing the utilisation of the Bontang LNG plant's available capacity.
Separate from these developments, the Italian oil major plans to conduct drilling campaigns within the next four to five years to assess the exploration potential of adjacent fields within its operating block of the Kutei Basin, whose reserves exceed 30 tcf and which it considers significantly de-risked by the Gen North discovery.
Eni holds an 83.3% participating interest and operates the North Ganal Block-Gen North field, with Agra Energi holding the remaining 16.7% interest. The Italian company also holds an 82% participating interest in the Ganal and Rapac blocks, with Tip Top (18%) as a partner.
Eni is also active in projects outside Asia, as illustrated by recent developments in Africa: the company sold its onshore operations in Nigeria but chose to keep its deepwater and liquefied natural gas (LNG) assets in its portfolio. The company also reached new production levels at its floating LNG (FLNG) unit offshore Mozambique.
Meanwhile, a major Italian company recently started producing gas from an offshore oil project in the Strait of Sicily, which it describes as Italy's most important gas development.
