Eni SpA said it has signed long-term agreements for the sale of natural gas produced from its operated projects in Indonesia’s Kutei Basin and liquefied at the existing Bontang facility.
The agreements for liquefied natural gas produced using feed gas from the North Hub and South Hub projects, on which Eni recently made a final investment decision (FID), amount to about 2 million metric tons a year, the Italian state-controlled company said in a press release.
“LNG will be supplied through the existing Bontang LNG facilities in East Kalimantan, including through the reactivation of one train that has been idle for several years, thereby maximizing the utilization of Indonesia’s existing energy infrastructure”, Eni said.
“These additional LNG volumes will further diversify and strengthen Eni’s global integrated portfolio, supporting the company’s objective of reaching over 20 MTPA [million metric tons per annum] of contracted LNG supply by 2030.
“The agreements confirm Eni’s integrated growth strategy, combining upstream gas development, efficient LNG infrastructure utilization, and global market access, while supporting the region’s growing energy needs”.
Earlier this year Eni reached FIDs to proceed with the North Hub and South Hub projects. North Hub consists of the Geng North and Gehem fields, under the North Ganal production sharing contract (PSC) and Rapak PSC respectively. South Hub involves the Gandang and Gendalo fields in the Gandang PSC.
Expected to go online 2028, the developments are designed to add up to 2 billion cubic feet per day of gas and 90,000 barrels per day (bpd) of condensate to Eni’s production capacity, it said in a press release March 18. Eni expects to reach peak production at the new hubs 2029.
“The Gendalo and Gandang development plan, in water depths ranging from 1,000-1,800 meters, includes the drilling of seven producing wells and the installation of deepwater subsea production systems tied back to Jangkrik FPU [floating production unit]”, Eni said.
“For the North Hub, the project foresees the drilling of 16 producing wells at water depths between 1,700 and 2,000 meters, and the installation of subsea systems linked to a newly built FPSO [floating production, storage and offloading vessel] capable of processing over 1 Bscfd [billion standard cubic feet per day] of gas and 90,000 bpd of condensate, with a storage capacity of 1.4 million barrels.
“The combined volumes in place for the two projects amount to nearly 10 Tcf [trillion cubic feet] of gas initially in place, with 550 million barrels of associated condensate”.
The gas will be channeled to an existing pipeline network and the Bontang liquefaction plant. The LNG produced will be delivered to both the domestic and overseas markets. The condensate will be processed and stored offshore in the FPSO for export via a shuttle tanker, according to Eni.
Authorities in the Southeast Asian country approved Eni’s development plans for the North and South Hub 2024.
Earlier this month Eni said a drill stem test (DST) had confirmed the preliminary assessment of about 5 Tcf of gas and 300 million barrels of condensate in the Geliga-1 discovery in the Ganal block.
The DST results showed the well could sustain a production rate of around 200 million cubic feet a day of gas and approximately 10,000 bpd of condensate, Eni said in a press release May 7.
“The new discovery is located next to the undeveloped Gula gas discovery, estimated at approximately 2 Tcf of gas in place and 75 million barrels of condensate. Early evaluations indicate that, when combined, Geliga and Gula could underpin incremental production of around 1,000 MMscfd of gas and 80,000 bpd of condensate”, Eni said.
Petronas JV
Ganal is among assets Eni agreed last year to contribute to its pending joint venture with Malaysia’s state-owned Petroliam Nasional Bhd. The independent joint venture, called Searah, will focus on gas-producing and development assets in Indonesia and Malaysia. The combination would create a “major” LNG player in the Asian market, according to the partners. They expect to complete the transaction this quarter.
Third Hub Project
For the Geliga discovery, Eni expects to submit a plan of development (POD) to the government “in the coming weeks”.
“The POD aims to enable the fast-track development of a third production hub in the prolific Kutei Basin, alongside the Gendalo and Gandang gas project (South Hub) and the Geng North and Gehem fields (North Hub), by leveraging the development concept currently being implemented for the North Hub project”, Eni added.
“In parallel, studies are underway to assess liquefaction capacity at the Bontang plant beyond that already included in the North Hub POD, potentially enabling the reactivation of up to two additional LNG trains currently out of service”.