LNG

Empyrean Energy, the UK-listed oil and gas company with interests in Indonesia, China and the United States, reported that an accord containing key terms has been signed for the Indonesian Mako gas field to supply Singapore by pipeline and domestic gas to the Indonesians.

Coro Energy Plc, the London-listed South East Asian energy company with a natural gas portfolio, said a term sheet had been signed with Sembcorp Gas of Singapore for a long-term gas sales agreement for the Mako gas field in Indonesia to supply the Asian city state.

The operator of the Duyung production sharing contract, West Natuna Exploration, a subsidiary of Conrad Asia Energy with a 76.5 percent interest in the Duyung resources, had signed the term sheet with Sembcorp Gas. Coro and another UK-listed company, Empyrean plc, hold 15 percent and 8.5 percent respectively of the Duyung PSC.

“Critically, the term sheet has been endorsed by the Indonesian petroleum upstream regulator (SKK Migas),” said Coro in a statement to the London Stock Exchange.

Analysts noted that gas would supply Singapore through an existing pipeline in competition to the LNG cargoes delivered to the Jurong Island LNG import terminal.

Indonesian plans

The development of the Mako gas project has been in line with Indonesia's stated objective of doubling gas production by 2030.

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.

Coro noted that it has a 15 percent participating interest in the Duyung PSC.

“The term sheet relates to the sale of Mako gas from start of production until 2037 for a total sales gas volume (100 percent) of 293 billion cubic feet with the potential to increase to 392 Bcf. Gas sales will be priced against Brent oil,” explained Coro.

“Further details of the gas sales agreement will be released to the market once the agreement is executed,” explained Coro.

Endorsed

The company added that the parties were now focused on finalising a definitive gas sales agreement.

“I am delighted to have now secured the GSA Heads at the Duyung PSC, approved by the buyer and, critically, endorsed by the Indonesian authorities,” stated James Parsons, Chairman of Coro.

“This is a critical step in the commercial de-risking of our project, positioning us perfectly for bids from the operator's farm-out process, which we expect to play out shortly,” Parsons added.

Empyrean Energy, the UK-listed oil and gas company with main interests in Indonesia and China, reported a successful share placement and debt restructuring and provided an update on supplying pipeline natural gas to Singapore in competition to LNG and made advances with its Topaz project offshore China.

May 2 (LNGJ) - Empyrean Energy, the London Stock Exchange-listed oil and gas development company with interests in China, Indonesia and the US, reported progress on a gas sales agreement with a Singaporean buyer for Indonesian gas and the UK company has told the gas field operator and majority stake holder, Conrad Asia Energy, that it would entertain bids for its own 8.5 percent stake.

   “Negotiation of key terms of the Mako gas sales agreement between a Singaporean buyer and the Indonesian upstream regulator, SKKMigas, are expected to be finalised during the second quarter, with Mako being a key strategic gas asset for both countries,” said Empyrean. The Mako gas field is part of the Duyung production sharing contract and is the largest undeveloped gas field in the West Natuna Basin from where gas is exported by pipeline to Singapore.

Empyrean Energy, the London Stock Exchange-listed oil and gas development company with interests in China, Indonesia and the US, said the plan of development for an Indonesian project has been approved and will supply pipeline gas to Singapore in competition to LNG.

The Indonesian Ministry of Energy and Mineral Resources has approved the updated plan of development for the Mako gas project within the Duyung production sharing contract (PSC).

The Mako development is based on contingent Duyung PSC resources of 384 billion cubic feet gross and with 297 Bcf net attributable to the Duyung joint venture.

“The Indonesian government also approved the export of up to 100 percent of the gas production to Singapore,” said the Empyrean statement.

The operator is targeting production from the Mako gas project to commence in 2025 with up to 120 million cubic feet of gas per day.

The gas will supply Singapore through an existing pipeline in competition to the LNG cargoes delivered to the Jurong Island LNG import terminal in the Asian city state.

Empyrean holds an 8.5 percent interest in the Duyung PSC in which the Mako gas project is part.

Production plan

“Development of the Mako gas project will be in line with Indonesia's stated objective of doubling domestic gas production by 2030,” said Empyrean.

“The award of the revised plan represents a material event in progressing the Mako gas project which is currently the largest undeveloped gas field in South Natuna Sea,” added Empyrean, whose regional headquarters are in Australia,

The operator of the Duyung PSC is West Natuna Exploration Ltd, a subsidiary of Conrad Asia Energy with a 76.5 percent interest in the Duyung resources. Another 15 percent interest is held by Coro Energy Plc and the balance by Empyrean.

The company explained that at present, there was no infrastructure to transmit gas from the Mako field to domestic markets in Indonesia, and hence the plan for exports of production to Singapore, which is already connected to the West Natuna Gas Transportation System.

“The existing under-utilised gas pipeline to Singapore expedites the development of the Mako gas field from which gas is expected to be produced from 2025,” explained  Empyrean.

Empyrean Chief Executive Tom Kelly said he was pleased with the approval of the updated development plan.

“It now allows the operator to re-focus resources on its stated objective of working with the Government of Indonesia to complete Gas Sales Agreement negotiations at the earliest opportunity,” added Kelly.