Italy's Eni starts gas production from Merakes deepwater project offshore Indonesia

Singapore — Italian oil and gas company Eni said April 26 that it has started gas production from the Merakes project offshore Indonesia, in a move that will help stem some of the decline in the Southeast Asian country's domestic hydrocarbon production.

Merakes' gas will be partially sold to the domestic market and will also contribute to the extension of the life of the Bontang LNG facility that supplies LNG to both the domestic and export markets, Eni said in a statement.

Merakes is deep-water gas field development located in the East Sepinggan block in the Makassar Strait, off the province of East Kalimantan in Indonesia. It produces hydrocarbons at a water depth of 1,500 meters from the Kutei Basin.

Eni said the initial five deep-water subsea wells will guarantee a production capacity of 450 million cu ft/d, equivalent to 85,000 b/d of oil equivalent, and the field has been connected to the Jangkrik Floating Production Unit (FPU), operated by Eni, at a distance of 45 km from Merakes field.

Merakes has a producing capacity of up to 750 million cu ft/d together with the gas flowing from the Jangkrik gas field, Eni said.

"The gas produced from Merakes is exported through subsea pipelines to the Jangkrik FPU. After being processed the gas is exported to the Onshore Receiving Facility (ORF) in Senipah via the existing Jangkrik export pipelines," it said.

Indonesia's Bontang LNG plant is located north of the Senipah terminal. Bontang has eight production trains and exports LNG to China, other parts of Indonesia, Taiwan and in 2021 even exported cargoes to Myanmar.

Eni is the operator of East Sepinggan block, in which Merakes is located, with a 65% ownership. Neptune Energy has a 20% share and PT Pertamina Hulu Energi holds the remaining 15%.

Indonesia has been trying to boost production from depleting assets by inviting foreign investments and the production sharing contract scheme for the East Sepinggan block was changed into a Gross Split PSC, which has more favorable terms for companies, in December 2018, the statement said.