Eni Sign MoU with Indonesia for LNG Supplies

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Eni Sign MoU with Indonesia for LNG Supplies

After striking a deal with Qatar for LNG supplies a couple of days ago, Eni, Italy’s oil and gas major, on Thursday has signed a 0.8 billion cubic meters (BCM) LNG sales and purchase agreement (SPA) with Merakes LNG Sellers in Indonesia.

The available volumes from Qatar will be delivered at the receiving terminal FSRU Italia, currently located in Piombino, Italy, with expected deliveries starting from 2026 with a duration of 27 years.

The LNG supplies will start from January 2024 for three years, in addition to the contract with Jangkrik LNG Sellers for 1.4 billion cubic meters per year, in place since 2017. With these new supplies, Eni can ensure greater flexibility and further diversification of its LNG supplies, while strengthening its presence in growing markets such as South Asia and the Far East.

This contract – together with the long-term contract recently signed with the Marine XII JV in Congo for LNG volumes of approximately 4.5 BCM, and the contract with QatarEnergy LNG NFE (5) for up to 1.5 BCM of LNG from the North Field East project – contributes to the build-up of Eni’s LNG portfolio by leveraging strong relationships with the countries of operation.

Eni’s integrated approach – that builds on the upstream developments to the LNG marketing – is in line with the company’s energy transition strategy, which aims to progressively increase the share of gas in overall upstream production to 60% by 2030, while also increasing the contribution of equity LNG.

Eni aims to more than double its contracted LNG volumes to over 18 million tonnes per year (MTPA) by 2026, leveraging integration between upstream and gas marketing activities.

Eni has been operating in Indonesia since 2001 across exploration, development, and production. The recent announcement of the Geng North discovery, along with the acquisition of Chevron’s assets and the envisaged fast-tracking of Indonesia Deepwater Development (IDD), significantly reinforce Eni presence in Indonesia’s Kutei basin, close to the existing Bontang LNG facilities, and confirm the strong relationship with a country that continues to play a strategic role in Eni’s LNG portfolio.

LNG Plants in Indonesia

Indonesia currently has three LNG plants in operation – Bontang, Tangguh, and Donggi-Senoro. The country also plans to develop an LNG plant in Masela.

Located in Bontang, East Kalimantan, the Bontang LNG plant consists of eight trains and is operated by LNG company Badak Natural Gas Liquefaction, which has Pertamina, VICO, Japan Indonesia LNG, and Total as its shareholders. The plant’s total capacity stands at 22.6 million mt/year. It started with the discovery of a giant natural gas reserve at Badak Field, as well as Samberah, Nilam, and Mutiara fields in Feb. 1972. This was just one year after a similar discovery at North Aceh’s Arun Gas Field, which has now become a regasification terminal.

Global Business Magazine

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