LNG

UK major BP shipped the first cargo on behalf of the Tangguh LNG production-sharing contract partners in Indonesia as the third liquefaction Train entered commercial operations.

Italian oil and gas major Eni and a key shareholder in global liquefied natural gas production projects has made a “significant’ natural gas discovery in East Kalimantan in Indonesia with the volumes likely headed for the onshore Bontang liquefaction and export plant.

Italian oil and gas company Eni has followed up its agreed $4.9 billion acquisition of UK-listed Neptune Energy by buying natural gas assets from Chevron Corp. in Indonesia with LNG production potential.

Eni has agreed to buy Chevron’s interests in the Kutei Basin offshore East Kalimantan in Indonesia for an undisclosed sum.

When the deal is completed Eni will take over the Chevron operatorships in the production sharing contracts in the Indonesian Blocks named the Ganal PSC (Chevron 62 percent), the Rapak PSC (Chevron 62 percent) and the Makassar Straits PSC (Chevron 72 percent).

Eni already has a 20 percent interest as non-operator in the Ganal and Rapak Blocks.

The acquired Neptune assets include PSCs operated with Eni producing feed gas for LNG exports from the Bontang LNG plant under long-term contracts, as well as gas for the Indonesian domestic market.

Expansion

Neptune’s main stakes are in the Jangkrik and Merakes gas fields and Eni is now further strengthening its operatorships in the region where there was still “significant exploration potential” in the Kutei Basin.

The Milan-based company explained that the acquisition of the Chevron assets was an important step, particularly for the opportunity to fast-track the development of the Gendalo and Gandang gas project, a part of the Indonesia Deepwater Development (IDD) in the Ganal PSC, close to the Jangkrik Floating Production unit, with estimated natural gas reserves of around 2 trillion cubic feet.

“This is in addition to the producing Bangka gas field, the Gehem and Ranggas discoveries and the significant exploration potential also included in the northern part of the asset, which therefore represent a further relevant consolidation for Eni operations in the East Kalimantan area,” Eni added.

“The acquisition of Chevron's assets in Indonesia will allow Eni to fast-track the development of the IDD project, leveraging its strong presence in East Kalimantan as well as the synergies with Eni-operated Jangkrik infrastructures, the existing Bontang LNG facility and the domestic gas market,” Eni stated.

Eni said the acquisitions were in line with the company’s aim of increasing its share of natural gas production to 60 percent of its overall hydrocarbon total by 2030.

Eni’s first exploration agreement in Indonesia dates back to 1968 and its current net production amounts to about 80,000 barrels of oil equivalent per day.

Global gas

The company’s agreed acquisition of Neptune includes assets far beyond Indonesia and includes key global LNG stakes and gas field assets in Algeria, Norway, the UK, the Netherlands and Australia.

Under the terms of the Neptune takeover Eni agreed to purchase Neptune for $2.6Bln and Eni’s Norwegian-listed subsidiary Vår Energi has agreed to pay $2.3Bln to acquire Neptune’s operations in Norway.

Eni also explained that many of Neptune's existing natural gas contracts would expire in the next 12 months, giving the company the opportunity to integrate these within its own pipeline gas and LNG portfolio.

Neptune was owned by equity finds with China Investment Corp. holding a 49 percent stake, the US Carlyle group owning 30.6 percent and the Luxembourg-based French asset management firm CVC Partners holding 20.4 percent. 

Indonesia has approved a revised plan of development costing $3.35 billion for the Merakes and Merakes East natural gas fields to serve the nation’s main LNG export plant through to at least 2032.

The project fields are operated by Italian energy company Eni and one is already a supplier since April 2021 for the onshore Indonesian Bontang LNG plant in East Kalimantan province.

The Bontang plant has a nameplate capacity of 11.5 million tonnes per annum.

“The development of this field will provide additional reserves to ensure supply to the East Kalimantan system so that the Bontang LNG facility can operate at an optimal level,” said Dwi Soetjipto, the Chairman of the nation’s Upstream Regulator SKK Migas.

Investment for the Merakes fields was initially set at $1.3 billion with peak production at 368 million standard cubic feet per day.

Indonesia has two other onshore LNG facilities, the Tangguh plant with 7.6 MTPA and the Donggi-Senoro plant with 2.0 MTPA of output.

The Tangguh plant is operated by UK major BP and is currently undergoing an expansion with the construction of a third Train.

Tangguh began operations in West Papua province in 2009 and has delivered about 1,500 LNG cargoes to global markets.

Another Indonesian LNG project is expected to move forward soon with Japanese energy company Inpex Corp. finalizing its revised development plan for the Abadi project.

Inpex is planning to build an Asia-focused LNG export plant on Yamdena Island in the Tanimbar chain in a joint venture with Shell Plc using feed-gas from the Abadi gas field in the Masela Block of Indonesia's Arafura Sea.

The liquefaction and export plant could be expected to be operational by around 2028.

Inpex has already completed preliminary front-end engineering and design for a facility with projected annual initial capacity of 10.5 MTPA.

French energy major Total posted record first-quarter production, driven by the ramp-up of LNG output at the Yamal liquefaction plant in Siberia as net income increased.

Indonesian company Badak, a subsidiary of state energy company Pertamina, has renewed its agreement with the nation’s State Asset Management Agency to maintain its status as the sole operator of Indonesia’s oldest liquefied natural gas plant in Bontang in the province of East Kalimantan.

Italian energy company Eni shipped its first small-scale cargo produced for the Indonesian domestic market from the new Jangkrik natural gas field development located offshore the Asian country province of East Kalimantan.