NuEnergy pens initial gas sales deal in Indonesia
Australia-listed NuEnergy Gas has signed a heads of agreement (HoA) with Indonesia’s Laras Ngarso Gede for the supply of gas from its Tanjung Enim coalbed methane (CBM) project in South Sumatra, it said on February 10.
Dart Energy, a unit of NuEnergy Gas, will supply the CBM to Laras, which is engaged in the supply of natural gas and its derivative products in West Java, Jakarta, Bali, and East Kalimantan.
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The HoA is effective until the date the final gas sale and purchase agreement is executed, or until Aug 9, 2023. The parties expect to sign the final agreement in the second quarter of 2023. The final deal, which shall be for a period of five years, may be extended by mutual agreement.
“Under the HoA, Dart Energy targets to commence the sale and delivery of CBM to Laras Energy on Oct 1, 2023 or a date mutually agreed by all parties, and until the total contracted volume of CBM of 1.49bn ft3 has been fully delivered, whichever is earlier,” NuEnergy Gas said.
Laras plans to compress the CBM into CNG and/or LNG, and transport it to the end-user. “This initial phase of gas sale, estimated at 1mn ft3/day is targeting the energy needs of the underserved market in South Sumatra,” NuEenergy Gas said.
This gas sale of 1mn ft3/day represents the initial and gradual progress in achieving the 25mn ft3/day of gas production as approved under the Tanjung Enim POD-1, which was approved by the ministry of energy and mineral resources of Indonesia in June 2021.
The Tanjung Enim POD-1 covers the development in two target areas, in the north and south of the contract area covering about 33 km2 with reserves totaling about 165bn ft3.
NuEnergy Gas said it is in discussion with a number of gas buyers aimed at significantly increasing the total gas sales from its acreage in South Sumatra.