Conrad Asia Energy (Conrad) subsidiary West Natuna Exploration (WNEL) has signed a non-binding terms agreement with Singapore’s Sembcorp Gas for a long-term gas supply deal for the Mako gas field.
The gas field is part of the Duyung production sharing contract (PSC) in the Natuna Sea, offshore Indonesia.
In a statement, Empyrean Energy, a partner in Duyung PSC, said the key terms of the agreement include gas production from Mako starting in 2025 until 2037, when the Duyung PSC is set to expire.
The deal, which has been endorsed by the Indonesian petroleum upstream regulator, will see Duyung PSC partners supply roughly 293 billion cubic feet (bcf) of gas, which can potentially increase to almost 392bcf.
The sale of gas is to be priced against Brent oil.
As the operator WNEL holds a 76.5% participating stake in the Duyung PSC, Empyrean controls an 8.5% interest and the remaining 15% is led by Coro Energy’s Coro Energy Duyung (Singapore).
Mako, which was discovered by Conrad and Empyrean in 2016, has the largest untapped gas reserves in the West Natuna Sea and is close to the West Natuna Transportation System.
According to Gaffney Cline & Associates’ independent estimates, as of 26 August 2022, the gas field contains gross 2C Contingent Resources of 413bcf.
By 2030, Indonesia wants to double its gas production, and Mako is expected to help achieve that goal while also bringing in significant foreign exchange, Empyrean noted.
Empyrean CEO Tom Kelly stated: “Empyrean is delighted that agreement has been reached between the operator of Mako and a major gas utility and that the agreement has been endorsed by the Government of Indonesia’s petroleum upstream regulator.
“Focus will now be on converting this significant milestone into a binding gas sales agreement. The existing terms will be welcomed by those parties currently participating in the sell-down process to fund the development of the Mako gas field.”