LNG

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.