Eni targeting to sign HoA for Jangkrik project this month
Tuesday, October 29 2013 - 11:54 AM WIB
Italian firm Eni has targeted to sign a Heads of Agreements (HoA) with the potential buyers of its gas from its Jangkrik field in Muara Bakau in Makassar Strait, according to upstream authority SKK Migas.
The information is contained in a confidential report submitted by SKK Migas to the House of Representatives? Commission VII which oversees energy affairs, which was leaked to Petromindo.com.
According to the report, the signing of the HoAs will be followed by the signing of Sales and Purchasing Agreements (SPAs) in December this year.
No officials at SKK Migas were available to provide further information on which companies will sign the HoAs with Eni.
In July this year, Suryadi Mardjoeki, Head of Oil and Gas Fuel Division at state utility firm PT Perusahaan Listrik Negara (PLN) said PLN is strongly considering buying gas from Jangkrik field to supply its Tanjung Priok and Muara Karang power plants in 2017 to make up for the estimated supply shortfall from Bontang LNG facility. The gas is expected to be supplied in the form of LNG to the Regas Satu FSRU.
There are two major gas projects in Muara Bakau, namely Jangkrik or JKK project and Jangkrik North East or JNE project. JKK project covers three discovery wells namely JKK-1 (2009), JKK-2, JKK-2 dir, while the JNE project also covers three discovery wells namely JKK-3 (2010), JNE-1 dan JNE-2 (2011).
The confidential report says the Plan of Development I (POD-I) for JKK project approved by the minister of energy and mineral resources on Nov. 29, 2011, involves the sale of a cumulative gas production of 913 billion cubic feet (bcf) of gas with a total investment of US$2.14 billion. Twenty five percent of the gas is for domestic market and 75 percent for export.
Meanwhile, the PoD II for JNE project which was approved by SKK Migas chairman on Jan. 31, 2013 involves the sale of cumulative gas production amounting to 417.5 bcf with a total investment of $1.445 billion. Forty percent of the gas is allocated for domestic market, 60 percent for export.
According to the report, first gas from JKK and JNE projects are expected to flow in the fourth quarter of 2016.
The FEED tender for EPCI-1 was awarded in October 2012, while the FEED tender for EPCI-2 was awarded in December 2012. According to the confidential report, the EPCI contracts are expected to be awarded in late November this year with the completion and the delivery of FPU to the field expected within 35 months after the contract awards.
Muara Bakau is 55 percent owned by ENI and 45 percent by French firm GDF Suez.
Editing by Johannes Simbolon