The Indonesian authorities have approved Eni SPA’s development plan for the Gehem and Geng North offshore fields, which envisages the construction of a new production facility with a production capacity of around 6.6 billion cubic metres of gas per day and 80,000 barrels of condensate oil per day.

The new production center, called the Northern Hub, is designed to produce five trillion cubic feet (Tcf) of gas and 400 million barrels of condensate at Geng North and 1.6 Tcf of gas at nearby Gehem, Eni said in a statement on its website.

Geng North was discovered last year as part of the North Ganal PSC. Gehem, meanwhile, joined Eni when the Italian state-controlled energy group acquired Chevron Corp.’s operating interest in the Rapak PSC as well as the Ganal and Makassar Strait PSCs last year.

In addition to approving the plans for Geng North and Gehem, the government also approved Eni’s development plan for the Gendalo and Gandang fields, which will be connected to the existing infrastructure. Gendalo and Gandang belong to the Ganal block, which is separate from the North Ganal block.

At the same time, Eni secured a 20-year extension for the Indonesian Deepwater Development (IDD) gas project, which consists of the Ganal and Rapak blocks.

The Ganal, North Ganal, Makassar Strait and Rapak blocks are located in the Kutei Basin off the coast of East Kalimantan province. The province is located on the Indonesian side of Borneo, an island shared with Brunei and Malaysia.

Eni holds 82 percent of the operating shares in the Ganal and Rapak blocks. After the Chevron takeovers, it held 20 percent. China’s state-owned company China Petroleum and Chemical Corp. (Sinopec) is a co-shareholder and holds the remaining 18 percent through its Indonesian subsidiaries. Eni holds an operating share of 72 percent in the other block that Chevron bought, the Makassar Straits PSC. Sinopec and Indonesia’s state-owned company PT Pertamina (Persero) hold 18 percent and 10 percent respectively as partners.

Eni holds an operating share of 83.3 percent in the North Ganal block, while the Singaporean company Agra Energi Pte. Ltd. holds the remaining 16.7 percent as a co-shareholder.

The Northern Hub plan includes flowlines and a new floating production and storage facility. Processed gas will be transported onshore to the Santan Terminal and East Kalimantan’s pipeline network. Part of the gas will be liquefied at the Bontang plant, and part will be supplied to the domestic market. Condensates will be transported by shuttle tankers, Eni said.

Meanwhile, Gendalo and Gandang would be reconnected to the Jangkrik floating production unit, which targets combined gas reserves of two trillion cubic feet. “The development of Gendalo and Gendang will make it possible to extend Jangkrik’s gas production plateau, which stands at 750 million cubic feet per day (million standard cubic feet per day), for at least 15 years,” Eni said.

“Eni also plans to conduct a drilling campaign over the next four to five years to evaluate the significant exploration potential near Eni’s operated blocks in the Kutei Basin. The gas reserve amounts to over 30 trillion cubic feet and is largely defused following the Geng North discovery,” the company added.

Eni CEO Claudio Descalzi said: “The approval of the development plans for Northern Hub and Gendalo&Gandang by the Indonesian authorities represents a crucial milestone on the way to the final investment decision (FID) for both gas projects and is in line with our decarbonization and energy security strategy.”

The new production center “gives us a strong leadership position today in a world-class basin, close to existing facilities and very important markets,” added Descalzi.

According to the company, Indonesia currently contributes 95,000 barrels of oil equivalent to Eni’s production.

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