How Conrad Asia Energy’s New Gas Deal Could Reshape Indonesia’s Energy Market
Conrad Asia Energy has advanced its position in Indonesia’s natural gas sector with a major gas sales agreement and increased ownership in the Duyung PSC. The company also completed a A$9 million capital raise to fund upcoming development milestones.
- Settlement agreement to increase stake in Duyung PSC to 91.5%
- Binding Gas Sales Agreement signed with PLN EPI for Mako Gas Field
- A$9 million capital raise supported by institutional investors and management
- Progress towards Final Investment Decision for Mako development
- Advancing commercialisation and exploration in Aceh PSCs with LNG focus
Strategic Stake Increase in Duyung PSC
Conrad Asia Energy Ltd (ASX, CRD) has made a significant move to consolidate its control over the Duyung Production Sharing Contract (PSC) in Indonesia’s West Natuna Basin. Following shareholder approval of a settlement agreement involving Coro Energy PLC, Conrad’s participating interest is set to rise from 76.5% to 91.5%, pending final approval from the Indonesian Ministry of Energy and Mineral Resources. This enhanced stake strengthens Conrad’s operational command over the Mako Gas Field, one of the largest gas discoveries in the region.
Major Gas Sales Agreement with Indonesia’s PLN
In a landmark development, Conrad’s wholly owned subsidiary West Natuna Exploration Limited signed a binding Gas Sales Agreement (GSA) with PT PLN Energi Primer Indonesia (PLN EPI), a subsidiary of Indonesia’s state-owned electricity giant. The agreement secures the sale of up to 111 billion British thermal units per day of natural gas from the Mako field to the domestic market until January 2037. Notably, the gas price is linked to the Indonesian Crude Price, an oil-indexed benchmark, marking a rare instance of oil-linked pricing in Indonesia’s domestic gas contracts. This deal not only underpins the financial viability of the Mako project but also aligns with Indonesia’s energy policy to boost cleaner domestic energy supply.
Capital Raise Fuels Development Momentum
Conrad successfully raised A$9 million through a two-tranche placement at A$0.65 per CDI, attracting new and existing institutional investors alongside full participation from its directors and senior management. The proceeds are earmarked to support critical next steps including finalising gas sale agreements, concluding the Duyung PSC farm-down process, and advancing the Final Investment Decision (FID) for Mako. Additionally, funds will accelerate commercialisation initiatives in the Aceh PSCs, including 3D seismic acquisition and exploration of small-scale LNG opportunities.
Aceh PSCs, Unlocking New Gas Potential
Conrad continues to develop its 100% owned Offshore North West Aceh and Offshore South West Aceh PSCs, which collectively hold substantial shallow-water gas resources estimated at 214 billion cubic feet (2C contingent resources). The company is progressing commercialisation studies with Indonesia’s largest gas company, PT Perusahaan Gas Negara (PGN), focusing on small-scale LNG infrastructure to supply local markets. Meanwhile, exploration efforts target near-field drilling opportunities and potential farm-in partnerships to accelerate development.
Financial Position and Operational Outlook
As of 30 June 2025, Conrad reported a cash balance of US$5.17 million, supported by the recent capital raise and ongoing operational receipts. The company continues to manage costs prudently while advancing procurement and engineering activities for the Mako development, including fabrication of the Mobile Offshore Production Unit and compressor packages. With several tenders extended to attract competitive bids, Conrad is focused on selecting strategic partners for farm-down and financing arrangements to underpin the upcoming FID.
Conrad’s Managing Director Miltos Xynogalas highlighted the significance of the GSA with PLN EPI, noting it crystallises the value of the Mako field and positions the company to meet Indonesia’s growing energy demand, particularly from data centres on Batam Island. The company’s disciplined execution and strategic partnerships are expected to drive long-term value while supporting Indonesia’s energy transition goals.
Bottom Line?
Conrad Asia Energy’s strengthened stake and binding gas sales deal mark a pivotal step towards unlocking the full potential of the Mako gas field and advancing Indonesia’s domestic gas market.
Questions in the middle?
- When will the Indonesian Ministry of Energy and Mineral Resources approve the increased stake in the Duyung PSC?
- Who will be the selected farm-down partner for the Mako development, and what terms will they bring?
- How will the confidential pricing terms of the Gas Sales Agreement impact Conrad’s future revenue and margins?