EniSpA E along with its partners – ENGIE (formerly GDF SUEZ) and Saka Energi Muara Bakau – inked two purchase and sale agreements with PT Pertamina (“PERSERO”). The deals relate to the liquefied natural gas (LNG) coming from Jangkrik Fields Development Project. The company’s share price, however, has been trending downward post-announcement and has shown a 0.6% fall.
Per the sale and purchase agreements, Pertamina will acquire 1.4 million tons per annum of LNG, from 2017 onwards. The Jangkrik Fields Development Project comprises both the Jangkrik and Jangkrik North-East fields. The development project entails the drilling of production wells to be connected to a Floating Production Unit for gas and condensate treatment. The project also needs to have a subsea pipeline laid for the transfer of gas and condensate to the Bontag Terminal. The field is scheduled to commence production in 2017.
Jangkrik and Jangkrik North-East fields, which were discovered in the Muara Bakau block in 2009 and 2011, respectively, are located in a depth of 400 meters in the Makassar Strait, about 100 kilometer east of Balikpapan.
Eni, the operator of the block, has a working interest of 55%. The other partners hold the remaining interest in the block. GDF Suez Exploration Indonesia, which is a subsidiary of ENGIE holds 33.33% and Saka Energi Muara Bakau holds 11.67%.
The Jangkrik Fields Development Project is one of the first deep-water gas projects in Indonesia that is being developed under a fast track scheme. It also underlines Eni’s commitment in supplying gas for the development of the Indonesian domestic market.
Eni’s presence in Indonesia dates back to 2001. Currently, the company has a vast portfolio of exploration, production and development assets that contribute significantly to the overall growth of Eni. The company has an average equity production of 17,000 barrels of oil equivalent per day in the country.
Eni currently holds a Zacks Rank #2 (Buy). Other favorably-priced stocks from the same space are Transmontaigne Partners L.P. TLP, EQT Midstream Partners L.P. EQM and LRR Energy, L.P. LRE. All these stocks sport a Zacks Rank #1 (Strong Buy).
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