Conrad Asia commits to Mako gas development with FID approval
Conrad Asia Energy Ltd. and its majority-owned subsidiary, West Natuna Exploration Ltd., operator of Duyung Production Sharing Contract (PSC), have approved a final investment decision (FID) for the Mako gas project offshore Indonesia.
With the approval, the Mako gas project transitions into full development and Conrad transitions "from a speculative exploration/appraisal company to a fully contracted gas
development and future production company with a defined and funded capital program and a clear path to production," said Miltos Xynogalas, managing director and chief executive officer.
Mako gas project
The project began with the 2017 Mako South-1 gas discovery. Derisking efforts included appraisal drilling in 2019, flow testing, confirmation of reservoir performance, and the finalization of the gas processing infrastructure and tie-in to the West Natuna Transportation System (WNTS), the company said.
The development is structured as a two-phase program initially comprising six development wells (this FID) tied back to a leased, 172-MMscfd capacity mobile offshore production unit (MOPU) at the field. Sales gas will be transported via a 59-km 18-in. OD pipeline to the KF platform in the adjoining Kakap PSC, then through the West Natuna Transportation System (WNTS) for delivery to the Indonesian domestic market.
Supply will be transported via a new spur pipeline from WNTS to Pemping Island, Riau Province, which is being constructed by PLN EPI, a wholly owned subsidiary of PT Perusahaan Listrik Negara (PLN Persero).
Total capital expenditure to first gas, which is targeted for fourth-quarter 2027, is estimated at about $320 million.
Conrad and PT PLN Energi Primer Indonesia (PLN EPI) previously signed a binding sales agreement for up to 111 billion British thermal units per day (about 111.9 MMscfd) and covers the full 2C Contingent Resources attributable to the field until January 2037, the current end of the Duyung PSC.
Nations Petroleum Natuna Barat (NNB) will fund its 75% portion of all future costs for the PSC, including the development of Mako, and has agreed to carry WNEL’s portion of the estimated project costs through the first phase of Mako development. A carry loan agreement governs the repayment of WNEL’s proportionate funding to Nations, with such repayments funded out of WNEL’s share of production.