Conrad Asia Reports Progress in Mako Project, Other Indonesian Activities

Conrad Asia Energy Ltd. said it has made significant progress in maturing the Mako project in the Duyung production sharing contract (PCS) with major contracts and services expected to conclude in the second quarter of the year.  During the first quarter, Indonesia’s Minister of Energy and Natural Resources approved the Mako export gas price and volume allocation. Conrad said that toward the end of the quarter, the company agreed on binding key terms for a gas sales agreement (GSA) with PT Perusahaan Gas Negara Tok (PGN). This is for the obligatory domestic portion of the gas produced from the field. The deal would represent 29.5 percent of Mako sales gas volumes until 2037. It is expected that the GSA will be signed before the end of May 2024.

The company said in a media release that the terms agreed with PGN and with Sembcorp are bringing it closer to reaching the final investment decision, expected for mid-2024, and production start-up is expected by mid-2026. In the Offshore North West Aceh (ONWA) and Offshore South West Aceh (OSWA) Conrad said it has continued reprocessing existing 2D seismic data. In addition, the company said that planning continues for the acquisition of up to 500 square kilometers (193 square miles) of modern 3D seismic data in each PSC later in 2024.

Furthermore, Conrad signed a memorandum of understanding (MOU) with PGN to cooperate in the provision of gas or liquefied natural gas (LNG) supply and development infrastructure for gas resources from its ONWA and OSWA PSCs. Under the MOU, the parties will undertake a joint study to examine commercialization options for the discovered gas resources in the two PSCs and will seek to cooperate in the development and maintenance of possible LNG infrastructure and sales of the LNG. Conrad has been approached by potential farm-in partners seeking impactful gas exploration opportunities attracted by recent multi-Tcf discoveries made elsewhere offshore Aceh, it said. A formal farm-down process for the sales of some of Conrad’s participating interest in the ONWA and OSWA PSCs is now being considered, it said.

“The March quarter was a busy period for the company on many fronts as we continued to advance the commercialization of our Mako project by addressing numerous, complex commercialization issues for this strategic international gas project”, Conrad Managing Director and Chief Executive Officer Miltos Xynogalas said. Conrad is targeting the completion of definitive gas sales agreements with buyers and the Indonesian petroleum upstream regulator, SKK Migas, by mid-2024. Conrad said it has also progressed the technical and commercial work with the WNTS Joint Venture to secure access to the pipeline system for the transportation of the Mako gas to market.

“Conrad holds contingent resources of 161 billion cubic feet, 2C, net attributable, which represents a major production growth opportunity for Conrad with gas commercialization options being evaluated. The acquisition of 3D seismic data is planned for later this year and is expected to underpin a possible resource update with greater resource certainty as we progress to PODs in the coming months. Conrad has approximately 20,000 km2 of acreage offshore Aceh and is well positioned to participate in the development of its existing shallow water discoveries and pursue the deeper water high impact exploration where large structures have already been delineated”, said Xynogalas.

Source: rigzone.com