Jadestone Energy, an independent oil and gas production company focused on the Asia Pacific region, reports that the Minister of Mines and Energy, Indonesia has issued a Ministerial decree dated 30 June 2021, allocating gas sales from the Akatara gas field in the Lemang PSC, onshore Indonesia, to a subsidiary of the national electricity utility, PT Perusahaan Listrik Negara.

The Ministerial decree facilitates the development and commercialisation of the Akatara gas field and also the associated production and sales of LPG to the local domestic market in Jambi, together with condensate sales to a local buyer.

Jadestone also announces that a heads of agreement (“HoA”) in relation to gas sales from its planned development, has been executed with PT Pelayanan Listrik Nasional Batam (“PLN”), as buyer. A fully termed gas sales agreement will now be progressed, with negotiations underway.

The Ministerial decree and HoA specify a gross sales volume of 20 BBtu/d starting in Q1 2024 and a plant gate sales price of US$5.60/mmBtu, at a delivery point approximately 17 kilometres from the field.

Indonesia’s upstream regulator, SKK Migas, has approved the HoA which is fully aligned with the Ministerial decree.

Paul Blakeley, President and CEO commented:
“I am delighted to have come to this critical milestone and to have obtained the support of both the Minister and SKK Migas in pursuing this important development. Gas from the Akatara field will ultimately be used for electricity generation by PLN, while LPG sales will provide much needed energy directly to the local market to meet domestic cooking requirements for the local population in the Jambi region. The associated condensate production will be utilised in the local market as well and will proportionately offset the reliance on imported product. Substituting coal burning with locally produced gas for power generation as well as LPG for local domestic use are both important contributions by Jadestone to the UN Sustainable Development Goals.

The Ministerial decree facilitates the development of the Akatara gas field and allocates the Lemang gas to meet domestic electricity demand for industrial users in Batam. Importantly, these arrangements are in line with the price, volume, and tie-in expectations we set out when we acquired our 90% operated interest in this asset just over six months ago, meaning our expectations for value add remain unchanged. I look forward to pressing toward formal field development sanction, in preparation for gas sales to commence, with key workstreams already underway, optimising the existing front end engineering study and preparing for contract tendering later this year.”

KeyFacts Energy: Jadestone Energy Indonesia country profile