August 29, 2024 [Reuters]- Indonesia expects Eni’s nearly $12 billion Geng North gas project to start production in late 2027, among the fastest developments the country has ever seen, the head of its upstream oil and gas regulator told Reuters on Wednesday.

Speedy development of Geng North, discovered in 2023, is expected to be the model for future gas development in resource-rich Indonesia, following recent giant gas discoveries, Dwi Soetjipto, the chairperson of SKK Migas, said in an interview.

Last week, Indonesia approved Italian oil major Eni’s development plans for Geng North as well as new plans for their nearby Gehem, Gendalo and Gandang fields, which are part of the Indonesia Deepwater Development (IDD) project that it acquired from Chevron last year.

To ease any bureaucratic delays, SKK Migas formed a team that worked directly with Eni on Geng North’s development and design phase, Dwi said.

“There must be changes in the project execution mechanism. If this is successful, this can be a model for other projects,” he said.

The project is also helped by the availability of an existing LNG plant in East Kalimantan, Dwi said, cutting back the time needed for development by three years.

Eni will integrate the development of Geng North’s 5 trillion cubic feet (Tcf) of gas with the Gehem gas project, creating the Northern Hub production area.

Gas from the Northern Hub’s planned floating facility will be piped onshore through the East Kalimantan pipeline network, and liquefied at the Bontang LNG plant.

Eni did not immediately comment on the timeline Dwi said for Geng North’s start up.

SKK is hopeful for a similar accelerated development timeline for the South Andaman block held by the United Arab Emirates’ Mubadala Energy.

Development plans for the South Andaman gas project are expected to be approved late this year with production targeted to start in 2028, Dwi said.

“The work in South Andaman may be more complicated, they are both deep water, but there is no infrastructure yet for South Andaman,” he said.

There is a possibility the project could utilise the Arun LNG plant in nearby Aceh province, but the obsolete plant may not be suitable for reactivation, he said.

EXPLORATION DESTINATION

Discoveries by Eni and Mubadala last year, among the biggest globally in 2023, has put Indonesia back on the map of energy explorers, Dwi said.

“Therefore the development of Geng North has a very strategic meaning for Indonesia’s oil and gas in the future,” he said.

“Indonesia is back to being an exploration destination.”

Previously a member of the Organization of the Petroleum Exporting Countries, Indonesia’s oil and gas output has declined as reserves deplete while new projects, such as INPEX’s Abadi LNG plant, are yet to start up.

China’s CNOOC, CNPC and Sinopec, as well as Malaysia’s Petronas are among those conducting exploration in east Indonesia, Dwi said.

Eni has also said they are planning to conduct more drilling near its existing sites.

“In Geng North they believe there could be up to 14 Tcf (of gas) in that area,” he said.

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