Empyrean Energy PLC (AIM:EME) chief executive Tom Kelly has welcomed what he described as an important step forward for the Mako project in Indonesia, as a domestic market gas sales deal was signed.
The AIM-quoted firm, which owns an 8.5% interest in the field, highlighted that the asset is advancing toward a final investment decision by midyear 2024.
Securing a domestic sales agreement, which will go alongside gas sales and export to Singapore, is another important box ticked as the project moves closer to sanction.
"These Domestic Market Obligation key terms are an important step towards FID for the Mako gas field development,” Kelly said in a statement.
“The domestic sales are subject to a pipeline spur being built connecting WNTS with Batam, and sales gas will be sold into Singapore if the spur does not proceed or until it is completed. This is another milestone for the project on the pathway to production."
The domestic agreement is with PT Perusahaan Gas Negara Tbk (PGN), and it is conditional on the development of a pipeline that will connect the West Natuna Transportation System to Batam's domestic gas market.
Mako is operated by partner Conrad Asia Energy, which recently revised estimates for the field's recoverable dry gas volumes. The new timeline for the project anticipates the start of production by mid-2026.
The estimates see some 392 billion cubic feet of 2C (best case) gross contingent resources, and some 591 billion cubic feet of gas in the 3C (high case) estimate.
Development at Mako field is envisaged in two-phases, beginning with six development wells tied back to a leased production platform, with the produced gas earmarked for the West Natuna Transport System.
Under this plan, the Mako partners aim to achieve a production plateau of 120 million cubic feet per day.