Conrad Asia Energy, an Australian-listed natural gas exploration and production company, has entered into a binding gas sales agreement for the domestic portion of the Mako gas field in Indonesia and with an option to sell the balance of the pipeline gas to LNG importer Singapore.
Conrad has signed the agreement to sell domestic gas to Perusahaan Gas Negara (PNG), the gas utility subsidiary of Pertamina, the national oil and gas company of Indonesia.
The ASX-listed company said the deal with PGN for gas from the Mako gas field, in which Conrad has a 76.5 percent participating interest, is an important step in the commercialisation of the largest undeveloped gas field in the West Natuna Sea.
PGN is Indonesia’s largest gas company and a separate GSA is being negotiated with Singaporean parties for the remainder of the Mako gas resource to be exported by pipeline to the Asian city state.
Singapore pipeline
The West Natuna Sea gas gathering system is already connected to Singapore.
However, PGN is proceeding with constructing a tie-in pipeline to the island of Batam across the Malacca Strait that will connect the Natuna Sea volumes to the Indonesian market.
It was noted by Conrad that completion of both GSAs would be significant landmarks on the path to a final investment decision for the Mako project targeted for the fourth quarter of 2024.
Conrad said it was moving towards finalising a GSA for the Mako export gas for Singapore over the coming few weeks.
The gas will supply Singapore through an existing pipeline in competition to the LNG cargoes delivered to the Jurong Island LNG terminal.
UK company Empyrean Plc is also a shareholder in the project. The Mako field contains contingent resources of 376 billion cubic feet of which 21 Bcf are net attributable to Empyrean.
Long-term supplier
The West Natuna Sea gas fields have been supplying Singapore with natural gas for more than two decades and the Mako project is expected to continue this supply for at least another 10 years from 2026.
In addition to the significance for the Mako development, Conrad said that the accord builds an important platform for Conrad with Indonesia’s national companies.
Conrad said it would continue to grow its business relationship with PGN through its other discovered gas resources offshore Aceh and related to which the two parties signed an accord in February 2024.
“Our focus has been finalising the underwriting gas sales agreements between the Mako Joint Venture, the Indonesian Government and Regulator and Singapore,” said Conrad Chief Executive Miltos Xynogalas.
“These agreements are the essential documents that demonstrate financial viability of the project, which in turn underwrite value and financial sustainability,” the CEO added.
