Indonesia reserves all production from Mako gas field for domestic needs

Indonesia’s Ministry of Energy and Mineral Resources (MEMR) has asked Conrad Asia Energy to make available all gas from the offshore Mako field development for the domestic sector.

Production would be exported to Batam, and purchased entirely by PT PLN Energi Primer Indonesia, a subsidiary of the state-owned power utility Persero.

Mako is in the Duyung Production Sharing Contract in the West Natuna Sea. The gas price will be linked to the Indonesian crude price.

Conrad is now working on a Gas Sales Agreement (GSA) with PLN, sharing its plans with Indonesia’s upstream regulator SKK Migas. All parties aim to have the agreement finalized and signed during the next few weeks.

Existing GSAs for Mako’s production with PT Perusahaan Gas Negara and Sembcorp Gas will be terminated.

According to Conrad, Indonesia plans to build a further 15 GW of gas power capacity between now and 2034.

MEM’s directive should support pending farm-out arrangements for both the Duyung and Aceh PSCs and the partners’ Financial Investment Decision for Mako.

Conrad also understands that MEMR plans to direct PLN to construct a 7-km gas spurline, under a $50-million program that would link the West Natuna Transportation System with Pemping Island and subsequently markets onshore in Batam.

The developments could encourage further exploration of the Duyung PSC’s prospective resources, the company added.

Conrad has a 76.5% operated interest in the PSC via its subsidiary West Natuna Exploration. The contract area is around 100 km north of Matak Island and 400 km north-east of Singapore.

Mako holds 2C resources of 376 bcf.