Conrad Asia Energy, an ASX-listed Asia-focused natural gas exploration and development company, has entered into a binding Gas Sales Agreement (GSA) for the sale and purchase of the domestic portion of Mako gas with PT Perusahaan Gas Negara Tbk (“PGN”), the gas subsidiary of PT Pertamina (Persero), the national oil company of Indonesia.

The GSA with PGN for gas from the Mako gas field (in which Conrad has a 76.5% Participating Interest), is an important step in the commercialisation of the Mako gas field (the largest undeveloped gas field in the West Natuna Sea). PGN is Indonesia’s largest gas company. A separate GSA is being negotiated for the remainder of the Mako gas resource which is targeted to be exported to Singapore.

The West Natuna Sea gas gathering system is already connected to Singapore. PGN is proceeding with planning a tie-in line to the island of Batam across the Malacca Straight that will connect the Natuna Sea to the Indonesian market. Completion of both GSAs will be significant milestones on the path to a Final Investment Decision (“FID”) for the Mako project targeted for Q4 20243.

• On 21 June 2024, Conrad and PGN entered into a binding GSA for the domestic portion of the gas produced from the Mako field.
• This GSA will be subject to the construction of a pipeline connecting the West Natuna Transportation System (“WNTS”) WNTS with the domestic gas market in Batam and it forms part of Conrad’s Domestic Market Obligation (“DMO”) as set out in the Mako’s revised Plan of Development (“POD”).
• The Total Contracted Gas volume under the PGN GAS is up to 122.77 trillion British Thermal Units (“TBtu”) with estimated plateau production rates of 35 billion British Thermal Units / day (“BBtud”). The terms of the GSA are confidential.
• The remainder of the Mako sales gas volumes are targeted to be sold to Singapore and for which a non-binding Term Sheet signed in 3Q 20234 . Conrad is moving towards finalising a GSA for the Mako export gas over the coming few weeks.
• In addition to the significance for the Mako Development, this GSA builds an important platform with Indonesia’s national gas company. Conrad will continue to grow its business relationship PGN with its other discovered gas resources offshore Aceh and related to which the two parties signed a Memorandum of Understanding (“MOU”) in February this year.

Conrad Managing Director and Chief Executive Officer, Miltos Xynogalas, commented: 
"As shared during our recent AGM, our focus has been finalising the underwriting gas sales agreements between the Mako Joint Venture, the Indonesian Government and Regulator and a Singapore based customer. These agreements are the essential documents that demonstrate financial viability of the project, which in turn underwrite value and financial sustainability.

This announcement is therefore an important step for Conrad in commercialising the Mako Gas Field and building its gas business in Indonesia. Conrad has been working closely with PGN for the commercialisation of Mako gas and is delighted to have progressed this to a formal GSA".

This GSA is a significant milestone on the road to FID which is targeted for Q4 of the current year.

Conrad also signed an MOU with PGN in February this year for its other gas discoveries in offshore Aceh which further strengthens Conrad’s alliance with PGN. Conrad has four gas discoveries in its Aceh portfolio and planned 3D seismic surveys later this year aim to continue delineating the size of these discoveries as well as add to its prospective resources which already total 15 trillion cubic feet (“Tcf”) of which 11 Tcf (P50) is net attributable to Conrad.

KeyFacts Energy: Conrad Indonesia country profile