Conrad Asia Energy Ltd. is actively lobbying for access to sell gas from the Duyung Block to Singapore via the West Natuna Transportation System (WNTS) pipeline. This initiative involves intricate commercial and legal negotiations with potential buyers, including SembCorp Gas Pte Ltd., a prominent Singaporean power company.
The negotiations are part of Conrad’s efforts to finalize a definitive Gas Sales Agreement (GSA) with SembCorp, following a preliminary agreement signed last year. The discussions focus on the sale of gas from the start of production until the end of the Duyung Block’s Production Sharing Contract (PSC) in 2037, with a total sales volume reaching 293 trillion British thermal units (Tbtu), potentially increasing to 392 Tbtu.
Conrad has made significant progress in developing the Mako field in the fourth quarter of 2023, despite delays in the Final Investment Decision (FID) due to extended negotiations with WNTS.
The GSA negotiations include plans for gas sales, with prices linked to Brent crude oil, highlighting the strategic importance of this agreement for Conrad’s divestment plans in the Duyung Block.
A crucial aspect of the revised Plan of Development (PoD) for the Mako field is the requirement to allocate 29.5% of total gas sales to domestic market obligations (DMO), with Conrad and PT Perusahaan Gas Negara (PGN) finalizing formal agreements to implement this mandate.
The revised PoD, endorsed by Indonesia’s Minister of Energy and Mineral Resources in November 2022, significantly increased the contingent gas resources of the Mako field, marking a 458% rise to 297 billion cubic feet following successful appraisal drilling.
Conrad, through its subsidiary West Natuna Exploration Limited, holds a 76.5% participation interest in the Duyung PSC, alongside Coro Energy Duyung (Singapore) Pte. Ltd (15% interest) and Empyrean Energy PLC (8.5% interest), emphasizing the international collaboration in this venture.
The ongoing negotiations between Conrad Asia Energy and SembCorp Gas highlight the growing interconnectivity of energy markets across Southeast Asia. The successful finalization of the GSA by mid-2024, as anticipated, would not only solidify the economic ties between Indonesia and Singapore but also underscore the strategic importance of regional energy cooperation for future sustainability and security.
Conrad Asia Energy Ltd. is in advanced stages of negotiation to sell gas from Indonesia’s Duyung Block to Singapore, signaling a significant step towards strengthening energy collaboration between the two countries. The discussions include finalizing a Gas Sales Agreement with SembCorp Gas Pte Ltd., focusing on long-term sales that align with Brent crude prices. This move, alongside the required domestic market allocation, reflects the strategic importance of the Indonesian gas sector on the regional energy landscape, setting a precedent for future cross-border energy transactions.
Source: Bisnis.com (2024)
