Eni sets its cap on ‘game changer’ move in Asia as its new gas and condensates offshore production hub gets the go-ahead

Italy’s energy giant Eni has received a green light for the integrated development of the two fields, which will bring to life a new production hub in the Kutei Basin off the coast of Indonesia. This will enable the firm to boost its gas arsenal.

As the Indonesian authorities have approved Eni’s plan of development (POD) for the Geng North (North Ganal PSC) and Gehem (Rapak PSC) fields, the development of these fields is expected to create the Northern Hub, which will be a new production hub in the Kutei Basin.

This project will develop 5 trillion cubic feet (tcf) of gas and 400 million barrels of condensates of the Geng North discovery announced in October 2023, along with the 1.6 tcf of the nearby Gehem discovery via subsea wells, flowlines, and a newly built FPSO with a handling capacity of about 1 bcf/d gas and 80,000 barrels of condensates per day and a storage capacity of 1 million barrels.

While gas will be treated on board the FPSO and then piped to the onshore receiving facilities at Santan terminal and the East Kalimantan pipeline network, it will be partly liquefied at the Bontang liquefied natural gas (LNG) facility and partly piped for the domestic market. On the other hand, the condensate production will be stabilized and stored onboard the FPSO and then evacuated via shuttle tankers. 

Furthermore, the Indonesian authorities have also given the all-clear for the POD covering Gendalo & Gandang fields (Ganal PSC), which envisages the development of the cumulative 2 tcf gas reserves in the Ganal PSC via subsea wells tied back to the floating production unit (FPU) Jangkrik. The Italian energy player claims that this project will extend Jangkrik’s gas production plateau, which is nearing 750 mmscf/d, by at least 15 years.

As the company has been awarded a 20-year extension of the IDD licenses, named Ganal and Rapak, it is set to establish production of approximately 2 bcf/d of gas and 80,000 bopd of condensates in the East Kalimantan region, both for domestic and international markets, leveraging synergies with existing facilities in the area, such as the Bontang LNG plant and the FPU Jangkrik.

Claudio Descalzi, CEO of Eni, commented: “The approval of the Northern Hub and Gendalo & Gandang plans of development by the Indonesian authorities marks a crucial milestone towards the FID of both gas projects, in line with our decarbonization and energy security strategy. The establishment of a new production hub in the Kutei Basin represents a game changer for Eni in Indonesia.

“This is the result of a consistent strategy that combines our distinctive exploration skills with the acquisition of IDD and Neptune assets. This grants us today a strong leadership in a world-class basin, close to existing facilities and to very important markets. The strategic partnership with the Indonesian authorities has been pivotal to reaching these key milestones only a few months after the Geng North discovery and the completion of the IDD and Neptune acquisition processes”.

According to Eni, the new developments, along with the ongoing development of East Merakes and Maha fields, result from its close strategic partnership with SKK Migas, thus, these projects are expected to drive “a major positive impact” on local content while also increasing the utilization of the available capacity at Bontang LNG plant, in addition to ensuring gas for domestic consumption.

Aside from these developments, the Italian oil major is planning to conduct a drilling campaign in the next four to five years to assess the near-field exploration potential within its operated blocks in the Kutei Basin, amounting to over 30 tcf of gas, which are believed to be largely de-risked following the Geng North discovery.

While Eni has an 83,3% participating interest and operates the North Ganal Block – Geng North field, with Agra Energi as its partner, which holds the remaining 16.7% stake, the Italian firm also holds an 82% participating interest and operates the Ganal and Rapak blocks, with Tip Top (18%) as its partner.

Eni is also actively working on projects outside Asia, as illustrated by recent developments in Africa, where the firm sold its onshore business in Nigeria but opted to keep the deepwater and liquefied natural gas (LNG) assets within its portfolio. The company also reached a new production level at its floating LNG (FLNG) unit offshore Mozambique.

Meanwhile, the Italian giant recently began gas production from a project at an offshore field in the Strait of Sicily, which the firm described as Italy’s most important gas development.