Bahlil Approves Final Investment Decision for Eni's Giant Gas Project in East Kalimantan

Italian energy company Eni has officially established the final investment decision (FID) for the development of the Gendalo–Gandang (South Hub) gas project and the Geng North–Gehem (North Hub) off the coast of East Kalimantan (Kaltim). This investment decision was made just 18 months after the approval of the Plan of Development (POD) in 2024, marking an acceleration in the development of Indonesia’s deepwater gas projects (Indonesia Deepwater Development/IDD). The FID for this giant gas project was announced by Eni Indonesia’s Managing Director to the Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, on Tuesday (17/3). The Head of SKK Migas, Djoko Siswanto, welcomed the investment decision. According to him, the FID for this project serves as a strong signal of global investors’ confidence in Indonesia’s upstream oil and gas investment climate. The project is also expected to absorb thousands of workers. “With an investment value exceeding USD 15 billion, Eni is concurrently running the tender process for goods and services procurement, and has already purchased long lead items (LLI),” he stated in an official remark on Wednesday (18/3). The project utilises deepwater production technology and existing infrastructure, including the Jangkrik FPU and the reactivation of Train F at the Bontang LNG Plant gas liquefaction facility, thereby enhancing cost efficiency and accelerating gas commercialisation timelines. The development of Gendalo and Gandang will be conducted at sea depths of 1,000–1,800 metres with the drilling of 7 production wells connected to the Jangkrik facility. Meanwhile, the North Hub project encompasses the drilling of 16 production wells at depths of 1,700–2,000 metres, which will connect to a new FPSO with a processing capacity exceeding 1 billion cubic feet of gas per day and 90,000 barrels of condensate per day. Overall, the two projects hold resource potential of around 10 trillion cubic feet of gas (TCF) and 550 million barrels of condensate. Production is projected for 2028 and will peak in 2029 with a capacity of around 2 billion cubic feet of gas per day and 90,000 barrels of condensate per day. The produced gas is planned to be piped onshore to supply the domestic pipeline network and support LNG production at the Bontang facility for domestic and export needs. Meanwhile, the condensate will be processed and stored at the offshore FPSO facility before being shipped via tanker. Additionally, this project will form part of the assets to be merged in a business collaboration between Eni and Malaysia’s energy company Petronas, to establish a new company (NewCo) targeted to achieve production exceeding 500,000 barrels of oil equivalent per day in 2029. Eni has been operating in Indonesia since 2001 and is one of the key gas producers in the Kutai Basin in the Makassar Strait, an area now emerging as Indonesia’s strategic gas production hub.