Italy's Eni will spend a total of $1.445 billion to develop the Jangkrik North East offshore gas field in Indonesia's Muara Bakau block in the Makassar Strait, the head of Indonesia's upstream regulator SKK Migas said Friday.
The field contains 417.5 Bcf of gas reserves and is expected to start production by 2015.
"We have approved Eni's development plan in Muara Bakau block. Under the plan, the Jangkrik North East field will start producing by 2015 and reach plateau output at 145,500 Mcf/day over 5.5 years. After that the gas production will decline gradually over nine years," SKK Migas head Rudi Rubiandini told reporters.
"Eni will drill development wells, build production facilities, such as subsea facilities from wells to floating production unit with total capacity 450,000 Mcf/day. The gas will be transferred to the Bontang LNG plant through a subsea pipeline," Rubiandini said.
About 40% out of production from the field will be dedicated for domestic buyers at a price at $9/MMBtu.
Eni holds 55% in the block, located between the islands of Java and Madura, with the remaining stake held by French GDF Suez.
Separately SKK Migas also has approved Canadian company Husky Oil's development of the MBH and MDA offshore fields in the Madura Straits. The company will spend $397 million to develop the fields, Rubiandini said.
First production is expected to start by 2016 at 81,460 Mcf/day, reaching a plateau of 120,000 Mcf/day, Rubiandini said.
The gas will be used to meet domestic demand in Java, Bali and Madura, he said.
