Italian Oil Company Finalises Investment in Major Gas Project in East Kalimantan
Global energy company Eni has officially taken the Final Investment Decision (FID) for the development of the Gendalo-Gandang (South Hub) and Geng North-Gehem (North Hub) gas projects offshore East Kalimantan. This investment decision was made just 18 months after the approval of the Plan of Development (POD) in 2024, signalling an acceleration in the development of Indonesia’s deep-sea gas projects.
The projects leverage deep-sea production technology and existing infrastructure, including the Jangkrik FPU and the reactivation of Train F at the Bontang LNG Plant, thereby enhancing cost efficiency and accelerating gas commercialisation timelines.
The development of Gendalo and Gandang will take place at sea depths of 1,000-1,800 metres, involving the drilling of seven production wells connected to the Jangkrik facilities.
Meanwhile, the North Hub project encompasses the drilling of 16 production wells at depths of 1,700-2,000 metres, which will be linked 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 potential resources of around 10 trillion cubic feet of gas (TCF) and 550 million barrels of condensate.
Production is projected to begin in 2028 and reach its peak in 2029, with a capacity of approximately 2 billion cubic feet of gas per day and 90,000 barrels of condensate per day.
The produced gas will be piped onshore to supply the domestic pipeline network and support LNG production at the Bontang facilities for domestic needs and exports.
Meanwhile, the condensate will be processed and stored at the offshore FPSO facilities before being transported by tanker ships.
This investment decision represents a significant milestone in the development of Indonesia’s deep-sea gas sector and strengthens the partnership between Eni and the Indonesian Government. The substantial volumes of gas and LNG from these projects will support Indonesia’s long-term energy resilience.
Meanwhile, the Head of SKK Migas, Djoko Siswanto, has welcomed the investment decision. According to Djoko, the FID for this project serves as a strong signal of global investors’ confidence in Indonesia’s upstream oil and gas investment climate.
“This investment decision is an important step in supporting the increase in national gas production while strengthening Indonesia’s energy resilience. SKK Migas, together with the government, will continue to encourage the acceleration of strategic projects like this to provide maximum benefits for the country and society, as well as to boost economic growth,” said Djoko in a written statement on Wednesday (18/3/2026).
“With an investment value of over US$15 billion, Eni is currently running parallel tender processes for goods and services procurement, and has already purchased long lead items (LLI). Yesterday, the Managing Director of Eni Indonesia reported to the Minister of Energy and Mineral Resources regarding this FID announcement,” he added.
This investment is expected to generate multiplier effects, including in terms of employment absorption.
“With that investment value, it is estimated to absorb a large number of workers, up to thousands of people,” said Djoko.
In addition, this project will form part of the assets to be merged in a business cooperation between Eni and Malaysia’s energy company Petronas, to establish a new company (NewCo) targeted to achieve production of more than 500,000 barrels of oil equivalent per day by 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.