Empyrean Energy: Mako gas sale key terms signed with PGN & updated Mako field resources

Moscow, March 29 - Neftegaz.RU. Empyrean Energy plc, the oil and gas development company with interests in China, Indonesia and the United States, notes the announcement released by Conrad Asia Energy Ltd, the holder of a 76.5% operated interest in the Duyung Production Sharing Contract (PSC), offshore Indonesia, in which Empyrean has an 8.5% interest.

Conrad has announced that it has entered into binding Key Terms for the sale and purchase of the domestic portion of Mako gas with PT Perusahaan Gas Negara Tbk, the gas subsidiary of PT Pertamina, the national oil company of Indonesia. Under these binding Key Terms, Conrad and PGN will agree in good faith and sign a fully termed Gas Sales Agreement for the domestic portion of the gas produced from the Mako field (GSA) located in the Duyung Production Sharing Contract (PSC) in the West Natuna Sea, offshore Indonesia.

• On 27 March 2024, Conrad and PGN entered into binding Key Terms thereby committing to agree and to sign a GSA for the domestic portion of the gas produced from the Mako field.
• Under the Key Terms, the parties will conclude negotiations for and agree in good faith a GSA that will include and be based upon the Key Terms. The parties shall endeavor to sign such GSA by no later than 31 May 2024.
• This GSA will be subject to the construction of the pipeline connecting the West Natuna Transportation System (WNTS) with the domestic gas market in Batam. It forms part of the Domestic Market Obligation (DMO) as set out in the Mako's revised Plan of Development (POD). The sales volumes under this GSA will represent approximately 29.5% of Mako sales gas volumes until the PSC expires in January 2037.
• The remainder of the Mako sales gas volumes will be sold to Singapore where a term sheet was signed in 3Q 2023 and Conrad is moving towards finalising a GSA over the coming months.
• These Key Terms are an important step towards the Mako development final investment decision (FID) planned by midyear 2024.

Empyrean CEO, T. Kelly, commented:

• these Domestic Market Obligation key terms are an important step towards FID for the Mako gas field development;
• the domestic sales are subject to a pipeline spur being built connecting WNTS with Batam, and sales gas will be sold into Singapore if the spur does not proceed or until it is completed;
• this is another milestone for the project on the pathway to production.

As approved by the Indonesian regulatory authority SKK Migas in 2022, a two-phase development plan based on six initial development wells tied back to a leased production platform at the Mako gas field is proposed, with sales gas transported via the WNTS pipeline to Singapore for sale to the Singapore market, and potentially to the Indonesian domestic market via a yet-to-be constructed spur from the WNTS. Two further development wells are planned 3 years after first gas.
The development plan proposes a plateau production of 120 MMscfd for 3.5 (Low case), 6.5 (Best case), or 11.5 (High case) years.