Eni Begins Offshore Gas Project in East Kalimantan

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) states that the Italian energy company Eni has taken the Final Investment Decision (FID) in the development of a deep-sea gas project off the coast of East Kalimantan with an investment value of around US$15 billion. The project encompasses the development of Gendalo-Gandang (South Hub) and Geng North-Gehem (North Hub). Head of SKK Migas Djoko Siswanto said that the major investment decision taken by Eni serves as a strong signal of global investor confidence in Indonesia’s upstream oil and gas sector. According to him, this project will not only increase national gas production but also strengthen long-term energy resilience. “This investment decision is an important step in supporting the increase in national gas production while strengthening Indonesia’s energy resilience,” said Djoko, quoted from a written statement on Wednesday, 18 March 2026. Djoko added that the government, together with SKK Migas, will continue to encourage the acceleration of strategic projects to provide maximum benefits for the economy and society. According to him, this FID decision is relatively quick as it was taken only about 18 months after the approval of the Plan of Development (POD) in 2024. “This reflects the acceleration of deep-sea oil and gas project development in Indonesia,” he stated. Technically, this project will utilise deep-sea production technology as well as existing infrastructure. This includes the use of the Jangkrik FPU facility and the reactivation of Train F at the Bontang LNG plant. This strategy is considered capable of reducing costs while accelerating gas commercialisation. For the South Hub, development will be carried out at sea depths between 1,000 and 1,800 metres with the drilling of seven production wells connected to the Jangkrik facility. Meanwhile, the North Hub will involve drilling 16 wells at depths of up to 2,000 metres connected to a new Floating Production Storage and Offloading (FPSO) facility. The FPSO is designed to have a processing capacity of more than 1 billion cubic feet of gas per day and around 90,000 barrels of condensate per day. Overall, both projects are estimated to have resource potential of up to 10 trillion cubic feet of gas (TCF) and 550 million barrels of condensate. Production from this project is targeted to start running in 2028 and reach its peak in 2029, with a capacity of around 2 billion cubic feet of gas per day. The gas produced will be piped to shore to meet domestic needs as well as support LNG production in Bontang, both for the domestic market and exports. Djoko emphasised that this jumbo investment will have broad economic impacts, including job creation. “With that investment value, it is estimated to absorb thousands of workers,” he said. In addition, this project will also be part of a business cooperation plan between Eni and Petronas. The two companies plan to form a new entity (NewCo) with a combined production target of more than 500,000 barrels of oil equivalent per day in 2029.