CBM Asia Mulls CBM to LNG Facility in Indonesia
CBM Asia Development Corp. has signed a non-binding Memorandum of Understanding (MoU) with a multinational gas company to conduct a technical and market study of a CBM-to-LNG facility(s) with a potential capacity of up to 50 MMcf/d in South Kalimantan, Indonesia.
As per the MoU, CBM Asia will conduct a commercial analysis on the CBM development strategy required to meet the proposed LNG facility capacity. They will also produce a technical study to determine gas production schedule, reserve certification and natural gas delivery points.
The said multinational gas company will conduct market analysis on the demand for LNG and will also undertake infrastructure study on construction of the LNG facility(s) and related logistical groundwork.
Each party is responsible for its own costs in relation to the study, as per the MoU.
On completion of the study, the two parties would jointly decide on the feasibility of the project with a view to entering into a definitive agreement on the establishment of a business relationship.
The proposed business structure would require CBM Asia to supply natural gas whereas the multinational gas company would off-take gas, build, own and operate the LNG facility, and market/deliver the LNG to the end consumer.
The potential CBM field development, gas sales contract, LNG facility construction and other related works would remain subject to local, regional and central government approvals.
CBM Asia’s President and CEO Alan Charuk said that CBM will bridge the increasing gap between Indonesia’s demand and supply of energy.
He further added that from a development perspective the potential establishment of a medium-scale LNG facility with capacity of up to 50 MMcf/d provides the crucial mid-development step beyond early-stage power generation towards development of new pipelines and/or large scale LNG facilities required for full-scale development of the Barito Basin’s vast CBM potential.
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