Ministerial Approval of Mako Gas Price & Allocation

Source: 2/23/2024, Location: Asia

Conrad Asia Energy Ltd (ASX:CRD) (“Conrad”), an ASX-listed Asia-focused natural gas exploration and development company, is pleased to announce that the gas price and volume allocation for the Mako field project in the Duyung PSC has been approved by the Indonesian Minister of Energy and Natural Resources (the “Minister”). This is a significant milestone that allows Conrad to finalise fully termed Gas Sales Agreements (“GSA”). The Mako project will contribute to Indonesia’s target of doubling gas production by 2030.

- SKK Migas, the Indonesian upstream regulator, has informed Conrad that the Indonesian Minister of Mining and Natural Resources (“Minister”) has issued a letter (the “Allocation Letter”) which approves the volumes and prices for gas exported and sold domestically from the Mako gas field in the Natuna Sea.

- The Allocation Letter is a key step in advancing the documentation for the sales of Mako gas and access to the West Natuna Transportation System (“WNTS”), as it serves as the formal basis for reserving pipeline capacity for the evacuation of Mako gas. As previously disclosed, Conrad is continuing to work with the relevant parties and SKK Migas to finalise the GSAs (with customary conditions precedent).

Conrad Managing Director and Chief Executive Officer, Miltos Xynogalas, commented:
The approval by the Minister of the Mako gas price and volume allocation is an important milestone towards the completion of the Mako GSAs. Together with the WNTS access agreements these are key requirements for a final investment decision on the Mako field development. I am very pleased to receive the continuing support from the Government of Indonesia for the development of this important gas field which will contribute to Indonesia’s objective of increasing domestic gas production and transitioning to cleaner burning fuels.

Conrad has made significant progress with the Mako gas project, including securing government approvals, maturing farm down discussions, and pushing forward with debt funding initiatives. The injection of capital from the recent successful capital raise has put us in a strong position to conclude the last outstanding issues on achieving the final investment decision.

Duyung PSC - Mako Gas Field 76.5% Participating Interest, Operator
Conrad holds a 76.5% operated interest in the Duyung PSC via its wholly owned subsidiary West Natuna Exploration Limited. Duyung is located in the Riau Islands Province, Indonesian waters in the West Natuna area, approximately 100 km to the north of Matak Island and about 400 km northeast of Singapore.

In Q3 2023, the Company signed the non-binding Term Sheet with Sembcorp, a major Singapore energy company, which outlines the key terms and serves as the basis for negotiating a definitive GSA.

SKK Migas has informed Conrad that the Minister issued the Allocation Letter authorising the volumes and prices of Mako gas for export and domestic sale.

In line with its Domestic Market Obligation (“DMO”) as set out in the POD, Conrad has progressed negotiations of the sales of the domestic portion of Mako gas to a domestic buyer Subject to the construction of the pipeline connecting the WNTS with Batam, Conrad intends to sell Mako gas to a domestic buyer to satisfy its DMO representing approximately 29.5% of Mako sales gas volumes. Conrad and the domestic buyer are finalising a formal agreement to govern these arrangements.

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