Conrad Asia Energy & Sembcorp Sign Deal for Mako Gas Field

Conrad Asia Energy Ltd, an Asia-focused natural gas exploration and development company, on Monday announced that it has signed a binding Gas Sales Agreement (GSA) for the sale and purchase of the export portion of natural gas from the Mako gas field with Sembcorp Gas Pte Ltd (Sembcorp), a wholly-owned subsidiary of Sembcorp Industries Ltd, a leading energy and urban solutions provider, headquartered in Singapore.

The GSA with Sembcorp for gas from the Mako gas field (in which Conrad has a 76.5% Participating Interest), is an important next step in the commercialisation of Mako field, the largest undeveloped gas field in the West Natuna Sea.

With this GSA and the gas sold under a separate domestic market obligation (DMO) GSA with PGN, Indonesia’s largest gas company, all of Mako’s current gas contingent resources have been committed to gas buyers.

Completion of both GSAs is a significant milestone on the path to a Final Investment Decision (FID) for the Mako project targeted for Q4 of 2024.

Essential Transition Fuel

Natural gas is an essential transition fuel in the energy mix across Asia and the sale of all Mako’s contingent resources gas resources represents an important project in Asia. Mako is one of several gas resources in Conrad’s Asian portfolio as it continues to pursue the development of gas across the region.

Conrad and Sembcorp signed a binding GSA for the export of gas produced from the Mako field to Singapore on 31 August 2024 and the contract term is until the end in January 2037 and allows for the sale of up to 76 billion British thermal units per day (BBTUD), which is equivalent to around 76.9 million standard cubic feet per day (MMSCFD).

The GSA also contains provisions for the sale of up to an additional 35 BBTUD (around 35.4 MMSCFD) should a tie-in pipeline not be built to the Indonesian domestic market in Batam and sales do not therefore eventuate.

Vital Agreement

Conrad Managing Director and CEO Miltos Xynogalas, said that the GSA between the Mako Joint Venture, the Indonesian Government and Sembcorp is the most significant event in the company’s history as it has progressed Mako from an exploration concept in 2017 to a gas development project in 2024.

“This GSA is the essential document that underpins the financial viability and the value of the project and an important step for Conrad in the commercialisation of the Mako Gas Field and building its gas business in Asia. Conrad has been working closely with Sembcorp for over a year and is delighted to have progressed this to a formal GSA,” he said.

He said that Mako is the first of what they believe will be several gas projects that Conrad aims to bring into commercial production from its existing portfolio of gas discoveries which includes its gas resources in Aceh in Indonesia.

“Asia has the fastest gas consumption growth in the world as its economies transition away from coal to the cleaner burning natural gas and we are proud to be involved in this transition,” he added.