Sembcorp in talks with Conrad to finalise gas sales agreement for offshore field

West Natuna Exploration Limited, a wholly-owned subsidiary of Conrad Asia Energy, is working on ironing out a definitive gas sales agreement with Sembcorp Industries’ subsidiary – Sembcorp Gas Pte. Ltd. – for a gas field located offshore Indonesia.

According to Sembcorp, a non-binding term sheet has been signed with Conrad Asia Energy, outlining the key terms and framework for a binding gas sales agreement (GSA) for the Mako gas field in Indonesia. The first gas is currently scheduled for 2025.

West Natuna Exploration Ltd (WNEL) is the operator of the field, located in the Duyung PSC, and holds a 76.5 per cent participating interest along with Coro Energy with a 15 per cent participating interest and Empyrean Energy with an 8.5 per cent participating interest.

Furthermore, Coro Energy confirms that the term sheet has been endorsed by the Indonesian petroleum upstream regulator, SKK Migas. The Mako gas field was discovered in 2016, and since that time the resource has been delineated through appraisal drilling. It received formal approval from the government of Indonesia for the revised plan of development in late 2022. 

Coro Energy explains that the term sheet relates to the sale of Mako gas from the start of production until 2037 for a total sales gas volume (100 per cent) of about 293 bcf with the potential to increase to around 392 bcf. These gas sales will be priced against Brent oil.

James Parsons, Chairman, commented: “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. 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.”

Conrad has been working on expanding its footprint offshore Indonesia. To this end, the company inked production sharing contracts for two blocks in January 2023.