Energy Minister Inaugurates Merakes Subsea Gas Field

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 196.Pers/04/SJI/2021

Date: 8 June 2021

Energy Minister Inaugurates Merakes Subsea Gas Field

Indonesian Minister of Energy and Mineral Resources (EMR), Arifin Tasrif, on Tuesday (8/6) inaugurated the Merakes Field development project in Sepinggan production sharing contract (PSC) worth of USD1.3 billion.

"With the completion of one of the major oil-and-gas projects, namely the development of the Merakes field, it is hoped that the production and utilization of natural gas in Indonesia will continue to increase. I'd like to congratulate the Upstream Oil and Gas Regulatory Task Force (SKK Migas) and ENI Indonesia for the successful production of Merakes Field," said Minister Arifin in his remarks at the Jangkrik Floating Processing Unit (FPU), East Kalimantan.

Arifin went on to say that Merakes Field, which is about 35 kilometers southeast of the Jangkrik FPU, allows ENI to maximize synergies and improve the economy of the field with nearby infrastructure. "Production from this field can extend the operating life of the Bontang LNG plant, which supplies LNG to the domestic and export markets," said Arifin.

Arifin considered that gas from the Merakes and Jangkrik fields can also be channeled through gas pipelines to meet domestic needs of 117 Million Standard Cubic Feet per Day (MMSCFD) in 2022--2025.

The Indonesian government is committed to continuously encouraging the increase in oil and gas reserves and production as well as optimizing the use of natural gas for domestic needs, which currently stands at 63.9%. Natural gas is targeted to contribute 22% to the national energy mix in 2025, while the realized use of natural gas in 2020 reached 19.36%.

"In 2020, our natural gas reserves were recorded at 62.4 Trillion Standard Cubic Feet/TSCF (proven and potential), with a reserve life of around 9 years and 18 years, respectively, if no new reserves are discovered," said Minister Arifin.

According to Arifin, some of the challenges that must be faced in achieving the 22% energy mix target are the decline in oil and gas production caused by old oil and gas fields, no discovery of new large reserves, and the lack of exploration which has impacted reserves discovery. "Hopefully, there will be new ideas, views, and thoughts to support the development of natural gas in general," concluded Arifin.

On the same occasion, Head of SKK Migas Dwi Soetjipto reported that the Merakes Field development project was previously targeted to be onstream faster, that is in Q3 2020. Due to the Covid-19 pandemic, the schedule had to be adjusted, and First Gas was produced on April 27, 2021. "It is such an extraordinary achievement that the Merakes Field can come onstream in the middle of the Covid-19 pandemic," Dwi stressed.

The Merakes project, continued Dwi, is the implementation of a strategy to accelerate reserves to production as well as proof that the upstream oil and gas investment climate in Indonesia is still conducive. "We know the economic level of PSC contractors during the pandemic, but this (Marakes Field) is proof that Indonesia is very feasible in terms of economy, human resources, and technology to develop deep sea projects," said Dwi.

For the record, the Merakes project is the development of a deepsea gas field off the coast of the Kutei Basin in 1,500 meters of water. The project's local contents (TKDN) target of 31.72% will significantly turn the national economic wheel. This project will contribute USD1.6 billion to state revenue, assist the fulfillment of pipeline gas needs in East Kalimantan as well as domestic and export LNG demands.

The field is operated by Eni East Sepinggan Limited (65%) in collaboration with PT Pertamina Hulu Energi East Sepinggan (15%), and Neptune Energi East Sepinggan B.V. (20%). The Merakes Field is designed for 20 years of production. The gas produced from the Merakes deep subsea well will be collected in an underwater manifold and exported via undersea pipeline to the Jangkrik Floating Production Unit (FPU) located about 45 km from the Merakes manifold. Gas from the Merakes Field will be processed at the Jangkrik FPU and exported to the Onshore Receiving Facility (ORF) in Senipah through the existing Jangkrik export pipeline. (IY)

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