Conrad Asia Energy Ltd (ASX: CRD) has reached a significant milestone in the commercialisation of its Mako gas field by signing a binding Gas Sales Agreement (GSA) with PT Perusahaan Gas Negara Tbk (PGN), a subsidiary of Indonesia’s national oil company PT Pertamina (Persero).
The agreement, finalised on June 21, 2024, covers the domestic portion of gas produced from the Mako field, which is the largest undeveloped gas field in the West Natuna Sea.
Conrad holds a 76.5 per cent Participating Interest in the project.
Under the terms of the GSA, the total contracted gas volume is up to 122.77 trillion British Thermal Units (TBtu), with estimated plateau production rates of 35 billion British Thermal Units per day (BBtud).
The agreement is contingent upon the construction of a pipeline connecting the West Natuna Transportation System (WNTS) with the domestic gas market in Batam, fulfilling part of Conrad’s Domestic Market Obligation (DMO) as outlined in Mako’s revised Plan of Development.
Miltos Xynogalas, Managing Director and CEO of Conrad expressed his satisfaction with the agreement, stating: “This announcement is an important step for Conrad in commercialising the Mako Gas Field and building its gas business in Indonesia.”
He added that the GSA is a significant milestone towards reaching a final investment decision (FID), which is targeted for Q4 this year.
In addition to the domestic market agreement, Conrad is currently negotiating a separate GSA for the export portion of the Mako gas resource, targeted for Singapore.
A non-binding Term Sheet for this agreement was signed in Q3 2023.
This latest development strengthens Conrad’s relationship with PGN, Indonesia’s largest gas company, and builds a platform for future collaborations.
In February 2024, Conrad also signed a Memorandum of Understanding (MOU) with PGN for its other gas discoveries offshore Aceh, further solidifying their alliance.
Conrad Asia Energy continues to focus on natural gas exploration and production in the shallow waters offshore Indonesia.
The company’s expertise lies in identifying and acquiring undervalued gas assets and maturing them through technical work and innovative approaches to field development.
As Conrad progresses towards the FID for the Mako project, this binding GSA marks a crucial step in the company’s growth strategy and its commitment to developing Indonesia’s natural gas resources.
