Conrad Asia Energy’s (ASX:CRD) subsidiary West Natuna Exploration has signed a binding contract for a mobile offshore production unit (MOPU) to support the development of its Mako Gas Field in the Natuna Sea, offshore Indonesia.
WNEL executed the agreement with PT Duta Marine/PT Pakarti Tirtoagung for the provision of a leased MOPU with a raw gas design capacity of 172 million standard cubic feet per day.
The contract involves an engineering, procurement, construction, and installation (EPCI) scope. Conrad notes this includes the sourcing of a donor jack-up drilling rig for conversion to a MOPU in Batam.
The deal secures a nine-year bareboat charter until January 2037, with options for up to five annual extensions.
Under the terms, Conrad will make a US$4 million ($5.71 million) downpayment for the donor rig purchase and a US$26 million facility equipment downpayment via progressive milestone payments.
WNEL will manage the operations and maintenance of the MOPU, alongside providing manpower and accommodation services.
Conrad Managing Director and CEO Miltos Xynogalas says the contract represents a “significant award” for the company, “combining engineering, procurement, construction, and installation scope with a long-term, recurring revenue charter and operations services component”.
“The nine-year bareboat charter underpins the company’s forward revenue visibility and a stable cash flow profile over the life of the project,” Xynogalas says.
The Mako project is initially structured as six development wells tied back to a leased MOPU.
Sales gas will be transported via an approximately 59km, 18-inch pipeline to the KF platform in the adjoining Kakap production sharing contract, before routing through the West Natuna Transportation System pipeline for delivery to the Indonesian domestic market.
Total capital expenditure to first gas is estimated at US$320 million, with Conrad’s 25% share amounting to approximately US$80 million.
Future operating costs are targeted at US$70—80 million per annum, which includes pipeline transportation expenses.
Xynogalas says procurement of the preferred donor rig for the MOPU conversion has commenced, with further updates expected as key milestone thresholds are achieved.
Conrad Asia Energy is a natural gas explorer and producer focused on the shallow waters offshore Indonesia, holding several operated tenements in the form of production sharing contracts.
Write to Paula Fabe at Mining.com.au
Images: Conrad Asia Energy
