Conrad Asia Energy pens Mako gas sales deal with Indonesian utility PGN
Australia-listed Conrad Asia Energy has entered into a binding gas sales agreement (GSA) for the domestic portion of Mako gas with Indonesian state utility Perusahaan Gas Negara (PGN), a gas unit of Pertamina, the company announced on June 24.
The binding key terms between the two parties were signed in April this year. The GSA with PGN for gas from the Mako gas field, located within the Duyung production sharing contract (PSC), in which Conrad has a 76.5% participating interest, marks a significant step forward in the commercialisation of the Mako gas field. The execution of this GSA is contingent upon the construction of a pipeline connecting the West Natuna Transportation System with the domestic gas market in Batam. This initiative aligns with Conrad's domestic market obligation outlined in Mako's revised plan of development.
A separate GSA is being negotiated for the remainder of the Mako gas resource, which is targeted for export to Singapore. The West Natuna Sea gas gathering system is already connected to Singapore. PGN is planning a tie-in line to the island of Batam across the Malacca Strait that will connect the Natuna Sea to the Indonesian market.
Completion of both GSAs will be “significant milestones” on the path to a final investment decision for the Mako project, which is targeted for Q4 2024, the company stated.
The Mako gas field was discovered in 2016, and since that time the resource has been delineated through successful appraisal drilling. It received formal approval from the government of Indonesia for the revised plan of development in late 2022.
Duyung PSC is operated by WNEL, a wholly-owned subsidiary of Conrad Asia Energy, which also operates the offshore Mangkalihat PSC in North Kalimantan province. WNEL holds a 76.5% interest in the licence, with Empyrean owning 8.5% and Coro Energy owning 15%.
Conrad also signed an MoU with PGN in February this year for its other gas discoveries in offshore Aceh. Conrad has four gas discoveries in its Aceh portfolio and planned 3D seismic surveys later this year.