Indonesia has approved a development plan for the first phase of the Geng North gas field operated by Italy's Eni in the Makassar Strait, the upstream oil and gas regulator SKK Migas said in a statement on Friday.
The approval also covered the development of the nearby Gehem field, SKK Migas said, part of the Indonesia Deepwater Development gas project Eni acquired from Chevron last year.
The development of the two fields will create a new production hub called the Northern Hub, Eni said in a separate statement, which will develop the 5 trillion cubic feet of gas and 400 million barrels of condensates discovered in Geng North and the 1.6 tcf discovery at nearby Gehem.
It will also involve a floating vessel with capacity to handle about 1 billion cubic feet of gas and 80,000 barrels of condensates per day, plus a storage capacity of 1 million barrels, it added.
The project is expected to bring in $17.49 billion in investment and operational spending, SKK Migas said.
Indonesia is keen to accelerate a number of gas projects following major discoveries, before the energy transition away from fossil fuels affects both funding and demand.
SKK Migas spokesperson Hudi Suryodipuro said all parties must commit to avoiding delays in the project. "If possible it can even be accelerated, so that its production can strengthen our oil and gas supplies," he said.
Indonesia has also approved a new development plan for the Gendalo and Gandang fields, another portion of the Indonesia Deepwater Development project, which have 2 tcf in gas reserves, Eni said.
The company has also secured a 20-year extension for the production sharing contracts for the Indonesia Deepwater Development projects.
"This grants us today strong leadership in a world-class basin, close to existing facilities and to very important markets," Eni CEO Claudio Descalzi said in the statement.
The Gendalo and Gandang portion of the Indonesia Deepwater Development will be linked to Eni's existing Jangkrik gas facility and extend its gas production plateau by at least 15 years, the company said in the statement.
Gas from the Northern Hub's floating facility will be piped onshore to the East Kalimantan pipeline network, and will also be partially liquefied at Indonesia's Bontang plant.
Eni plans to conduct a drilling campaign near its existing operations in the next four to five years.
(Reuters - Reporting by Fransiska Nangoy, Bernadette Christina Munthe; Editing by John Mair and Jan Harvey)
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