Conrad Asia Energy has announced a significant milestone in its Mako gas field development. PLN Energi Primer Indonesia (PLN EPI) has successfully completed a critical "hot tap" connection to the West Natuna Transportation System (WNTS). This strategic infrastructure link is designed to support the Pemping gas pipeline project, which will ultimately serve Conrad's Mako gas field located in Indonesia's Natuna Sea. The Mako field, currently under active development, is anticipated to begin gas production in the final quarter of 2027. This connection is poised to substantially bolster gas transportation capabilities and enhance the domestic gas supply for the Indonesian market, ensuring greater energy security.
The intricate "hot tap" procedure allowed for the seamless integration of a new pipeline with an existing operational gas line without any interruption to the ongoing gas flow. This complex operation was executed on a pipeline situated 29 meters underwater, which currently transports approximately 300 million cubic feet of gas daily at a pressure of 1,096 pounds per square inch. Following this successful connection, PLN EPI is scheduled to commence the commissioning of the new pipeline in the coming week. Initial gas deliveries, estimated at around 25 million cubic feet per day, will originate from established Natuna Sea gas producers to power Batam's electricity generation system. Furthermore, a gas sales agreement was formalized last July between PLN EPI and West Natuna Exploration, a Conrad subsidiary, securing up to 111 million cubic feet per day of sales gas from 2027 to 2037. Conrad has developed processing facilities capable of handling a maximum of 172 million cubic feet per day, with actual production volumes contingent on field performance, regional demand, and potential future discoveries.
Miltos Xynogalas, Managing Director and CEO of Conrad, emphasized the vital importance of integrating the West Natuna Basin with Batam for both Indonesia and the gas producers in the Natuna Sea. He highlighted that Conrad's Mako gas field, with its 330 billion cubic feet of proved and probable reserves, represents the largest undeveloped gas field in the West Natuna Basin. Upon its expected production start in late 2027, the Mako field is projected to significantly contribute to the substantial energy demand in Batam and Sumatra. This influx of natural gas into the region will not only strengthen energy security but also reduce reliance on fuel oil, leading to a decrease in emissions. West Natuna Exploration, as the operator of the Duyung production sharing contract, has also finalized binding agreements for the Mako field's development. These include a contract with PT PAL Indonesia for the engineering, procurement, construction, and transportation of the conductor support frame, and a separate agreement with Duta Marine/Pakarti Tirtoagung for a leased mobile offshore production unit. This latter agreement involves converting a jack-up drilling rig in Batam to a production unit with a raw gas capacity of 172 million cubic feet per day, under a bareboat charter extending until January 2037, with provisions for extension options. The Mako project entails six development wells linked to the mobile offshore production unit, with gas transported via a 59-kilometer, 18-inch pipeline to the Kakap PSC's KF platform, and then onward through the West Natuna Transportation System to Indonesia. The total capital expenditure for the project up to the first gas production is estimated at $320 million, with West Natuna Exploration's share being approximately $80 million (Rp1.44 trillion).
This ambitious undertaking underscores a forward-thinking commitment to sustainable energy and regional development. By tapping into significant natural gas reserves and bolstering critical infrastructure, the project not only secures a cleaner energy future for Indonesia but also fosters economic growth and technological advancement in the offshore energy sector. It exemplifies how strategic partnerships and innovative engineering can pave the way for a more resilient and environmentally conscious energy landscape.