Italian Energy Company Plans to Increase Gas Production while Focusing on Decarbonization Efforts in Indonesia

March 2024

Italian energy company Eni SpA has presented its proposed expansion of natural gas operations to the Indonesian government and concurrently inked an agreement with the energy ministry for collaborative efforts in energy transition. In a recent meeting with the Indonesian President in Jakarta, Eni’s CEO outlined the development blueprint for the Indonesia Deepwater Development (IDD) project situated offshore Borneo island. Eni assumed control of the project from Chevron Corp. in 2023 upon acquiring the American competitor’s operational interests in three Indonesian blocks: Ganal PSC, Makassar Straits PSC, and Rapak PSC, all falling under the Ganal production sharing contract (PSC).

The IDD project encompasses the Gendalo and Gandang fields, which Eni approximates to contain around two trillion cubic feet (tcf) of natural gas reserves. Data available on Chevron’s website indicates that in 2019, the Ganal, Makassar Strait, and Rapak blocks collectively yielded an average daily output of 33 million cubic feet of gas and 2,000 barrels of oil, net to the operator. Before the acquisition, Eni was already a partner in Ganal and Rapak, holding a 20% interest, while Chevron possessed a 62% stake.

Eni’s CEO also addressed the development strategy for the Geng North field during the discussions. This field is adjacent to the IDD project, located in the Kutei basin offshore East Kalimantan province, on the Indonesian part of Borneo. Eni disclosed a “significant gas discovery” at the Geng North-1 exploration well last October. Preliminary estimates suggest reserves of 5 tcf of gas and 400,000 barrels of condensate under the separate North Ganal PSC.

Eni intends to construct a production hub for Geng North in the northern region of Kutei, with a capacity of 1.0 billion cubic feet of gas per day (cfpd). This new hub, coupled with the planned expansion of existing facilities in the southern part of Kutei by 750 million cfpd, will significantly boost Indonesia’s gas production for domestic consumption and export purposes. These upcoming projects, alongside the ongoing development of the East Merakes and Maha fields, will substantially impact local content and enhance the utilization of the available capacity at the Bontang LNG plant. The Maha field falls under Eni’s operated West Ganal block. At the same time, Merakes is another gas field within the East Sepinggan block, also operated by Eni in the Kutei basin.

In addition to increasing gas production in Indonesia, Eni is committed to mitigating the environmental impact of its operations in the region. During the meeting, the Ministry of Energy and Mineral Resources of Indonesia and Eni entered into an MOU to collaborate on energy transition and decarbonization initiatives. This agreement enables Eni to explore various avenues to offset emissions, including assessing the feasibility of producing agri-feedstock for Enilive biorefineries, primarily from agro-industrial and forestry residues. Eni will also examine opportunities for Carbon Capture Utilization and Storage and energy efficiency measures to reduce greenhouse gas emissions from upstream operations and other challenging sectors. Furthermore, Eni will evaluate nature- and technology-based projects, such as clean cooking initiatives, to counterbalance residual emissions.

(Source: Rigzone)

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