West Natuna Exploration Ltd. (WNEL), a wholly owned subsidiary of Conrad Asia Ltd., has entered into a non-binding key terms agreement with Singapore’s Sembcorp Gas Pte. Ltd. for the supply of gas from the Mako gas field in Indonesia.
WNEL is the operator of the Duyung Production Sharing Contract (PSC) covering the Mako gas field. The deal has been endorsed by SKK Migas, the country’s upstream oil regulator.
The key terms of the non-binding agreement relate to Mako’s approved gas production from 2025 until the end of the Duyung PSC in 2037 for a total gas sales volume of approximately 293 billion cubic feet ( Bcf) with the potential to increase to approx. 392 Bcf, according to a recent press release from Empyrean Energy plc, which is a partner of Duyung PSC. Gas sales will be priced against Brent oil, according to the statement. The parties will focus on finalizing a definitive gas sale agreement in the coming months, Empyrean said.
The Mako gas field, located in the Duyung PSC in the Natuna Sea, Indonesia, has been independently estimated by Gaffney Cline & Associates in 2022 to contain 2C gross contingent resources of 413 Bcf. It is currently the largest undeveloped gas resource in the West Natuna Sea, located close to the West Natuna transportation system, according to the release.
“Empyrean is delighted that an agreement has been reached between the operator of Mako and a major gas company and that the agreement has been endorsed by the Indonesian government’s upstream oil regulator,” said CEO Empyrean, Tom Kelly. significant milestone in a binding gas sales agreement. The parties currently engaged in the sale process to finance the development of the Mako gas field will appreciate the existing terms. The Mako gas field is the largest undeveloped gas discovery west of Natuna. Sea and is considered important for energy security in the region and the transition from coal to cleaner energy sources”.
“Mako will provide long-term reliable gas supplies at a time when safe gas with lower carbon emissions (compared to LNG) has become an important component for energy security and transition. Indonesia has a stated goal of doubling its gas production by 2030, and Mako is expected to contribute to this goal and provide valuable foreign earnings to Indonesia,” Empyrean said in the statement.
WNEL has a 76.5% stake in the Duyung PSC, with Empyrean and Coro Energy Duyung (Singapore) Pte. Ltd. with 8.5 and 15 percent, respectively.
Conrad and Empyrean discovered Mako in 2016 and have since delineated the resource through successful appraisal drilling. Mako’s partners received formal approval from the Indonesian government for a revised development plan by the end of 2022, the statement said.
In June, Sembcorp signed an agreement to import natural gas from Medco E&P Natuna Ltd., a unit of Indonesian oil and gas company PT Medco Energi Internasional Tbk. The deal to import natural gas from the West Natuna gas fields was valued at US$1.41 billion (SGD1.9 billion), Sembcorp said in an earlier press release. The company expects the agreement to enter into force in the second half of 2023, subject to the necessary agreements to transport the new gas supply. Delivery is expected to begin in 2024 over four years.
The West Natuna Transportation System is a 403.9-mile (650-kilometer) natural gas pipeline that carries output from three production facilities in the South Natuna Offshore, off Indonesia, to a facility ground reception in Singapore.
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