Conrad Asia Energy cleared to finalise gas sales agreements for its Mako gas field
Allocation Letter from Indonesian minister approves volumes and prices for both domestic and export gas sales
Negotiations to finalise gas sales agreements are continuing
Special Report: Conrad Asia Energy can now finalise gas sales agreements for its Mako gas field in the West Natuna Sea offshore Indonesia after the Minister for Energy and Natural Resources approved the gas price and volume allocation.
Mako has a best estimate (2C) contingent resource of 413 billion cubic feet of gas that can be quickly brought into production through the existing West Natuna pipeline which carries gas from three third-party production facilities in the South Natuna Sea to an onshore receiving facility in Singapore.
Conrad Asia Energy (ASX:CRD), which holds a 76.5% operating interest in the Duyung production sharing contract that hosts Mako, has already been awarded a plan of development for the field, completed front end engineering design, and key terms for a gas sales agreement with Sembcorp Gas and SKK Migas – the Indonesian upstream regulator.
Singapore relies on gas for 95% of its power needs and is scheduled to build four new gas-fired power stations over the next two years.
Having access to more pipeline gas will mean lower emissions, compared to using LNG to meet this demand.
CRD has also progressed negotiations for the sale of gas – representing about 29.5% of Mako sales gas volumes – to a domestic buyer to satisfy its domestic market obligation.
Approval a key step forward
SK Migas has now informed the company that the Indonesian Minister of Mining and Natural Resources has issued an ‘Allocation Letter’ that approves the volumes and prices for gas exported and sold domestically from the Mako gas field.
The Allocation Letter is a key step in advancing the documentation for the sales of Mako gas and access to the West Natuna Transportation System (WNTS), as it serves as the formal basis for reserving pipeline capacity for the evacuation of Mako gas.
“The approval by the Minister of the Mako gas price and volume allocation is an important milestone towards the completion of the Mako GSAs,” CRD managing director Miltos Xynogalas said.
“Together with the WNTS access agreements these are key requirements for a final investment decision on the Mako field development.
“I am very pleased to receive the continuing support from the Government of Indonesia for the development of this important gas field which will contribute to Indonesia’s objective of increasing domestic gas production and transitioning to cleaner burning fuels.
“Conrad has made significant progress with the Mako gas project, including securing government approvals, maturing farm down discussions, and pushing forward with debt funding initiatives.
“The injection of capital from the recent successful capital raise has put us in a strong position to conclude the last outstanding issues on achieving the final investment decision.”
This article was developed in collaboration with Conrad Asia Energy, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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