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    SKK Migas sanctions new Indonesian gas plan


Mako gas field in the West Natuna is expected to produce 120mn -150mn ft3/d, starting from 2025.

by: Callum Cyrus

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SKK Migas sanctions new Indonesian gas plan

Indonesia's upstream regulator SKK Migas has sanctioned an updated plan of development (PoD) for the shallow-water Mako gas project in the West Natuna basin, project partner Empyrean Energy said September 9.

Empyrean had in December 2020 announced the PoD would be updated to reflect "important and extensive" appraisal drilling data. The appraisals resulted in a significant upgrade to Mako's reserves estimate with operators Conrad Petroleum describing it as among the "largest" West Natuna gas finds in history.

Mako is licensed through the Duyung production sharing contract. It is estimated to contain 363bn ft3 of best case contingent resources potential.

Empyrean revealed September 9 the revised PoD would entail two phases of development. Six wells will be drilled in the initial phase, while a further two wells will be delivered in the second phase.The PoD has now been submitted to Indonesia's ministry of energy and mineral resources for approval.

First gas at Mako is envisaged 2025, gas output rising to a plateau of at least 120mn ft3/d, and to 150mn ft3/d if the upside of Mako's reservoir potential is achieved. Benchmark forecasts for 2025 in Mako's Competent Person's Report suggest it will generate $9.97/'000 ft3, with talks now being held to supply offtake to an unnamed Singapore-based customer. Mako also lies in close proximity to the West Natuna pipeline network, allowing easy access to Indonesian gas distributors.

Duyung PSC is operated by WNEL, a wholly-owned subsidiary of Conrad Petroleum's Indonesia-focused unit Conrad Asia Energy, which also operates the offshore Mangkalihat PSC in North Kalimantan province.

WNEL holds a 76.5% interest in the licence, with Empyrean owning 8.5% and fellow project partner Coro Energy owning 15%.

Tom Kelly, CEO at Empyrean, said: "Empyrean is also encouraged by the significant upside that exists if the current macro environment of higher South East Asian gas prices results in any improvement on pricing assumptions contained in the CPR.

"There also exists significant upside if the reservoir performs better than the 2C Best case. We look forward to the conclusion of gas sales agreement negotiations."