Eni has taken the final investment decisions for two major deepwater gas developments offshore East Kalimantan, Indonesia: the Gendalo-Gandang (South Hub) and Kutei North Hub projects. Production from both is expected to start in 2028, reaching a combined plateau in 2029 of 2 billion cubic feet per day of gas and 90,000 barrels per day of condensate. The developments hold an initial resource of nearly 10 trillion cubic feet of gas and 550 million barrels of associated condensate.

Project Details and Infrastructure

The Gendalo-Gandang development involves drilling seven producing wells at water depths of 1,000 to 1,800 meters. Its subsea systems will be tied back to the existing Jangkrik floating production unit, extending that facility's production plateau by at least 15 years. The Kutei North Hub, encompassing the Geng North and Gehem fields, will involve drilling 16 producing wells at depths of 1,700 to 2,000 meters. Its subsea systems will connect to a newbuild floating production, storage and offloading vessel, supplied by Saipem, with a processing capacity of 1 bcfd of gas and 90,000 bpd of condensate and storage for 1.4 million barrels. This northern hub is designed to enable future tie-backs.

Gas Utilization and Market Supply

Gas from the projects will supply both domestic and international markets from 2028. It will feed the Bontang liquefied natural gas project via an export pipeline, with Eni's plan including the reactivation of an idle train at the Bontang plant to extend its operating life. Gas will also supply Indonesia's domestic pipeline network. Condensate will be stored offshore on the FPSO and exported via shuttle tanker.

Governance, Investment, and Future Plans

The projects will be operated by a NewCo joint venture between Eni and Petronas, which holds 19 upstream assets in Indonesia and Malaysia. An initial investment of $15 billion is committed over the first five years, with a total production target of 500,000 barrels of oil equivalent per day by 2029. The Indonesian government approved the Plan of Development for the South Hub two years ago and for the Northern Hub in August 2024. Eni has launched key tenders for the developments and is seeking a drillship for another offshore well. The company is also expected to farm down some of its Kutei basin assets, including the North Ganal PSC, in the second half of this year.