NuEnergy Gas Limited has inked a fully funded collaboration with PT Beijing Energy Linking to scale its Tanjung Enim coalbed methane project from early sales to a major 25 MMSCFD production plateau.
- PT BJEL appointed Lead EPCC contractor for Tanjung Enim POD 1
- 100% field development financing under capped contract price
- Development to scale gas production from ~1 MMSCFD to 25 MMSCFD
- Backing by Beijing Energy International Holding and Envision Group
- First coalbed methane Plan of Development in Indonesia
Strategic Partnership Unlocks Full Funding
NuEnergy Gas Limited (ASX – NGY) has taken a decisive step forward in its Indonesian unconventional gas ambitions by signing a collaboration agreement with PT Beijing Energy Linking (PT BJEL). This partnership appoints PT BJEL as the lead contractor responsible for engineering, procurement, construction, and commissioning (EPCC) of the Tanjung Enim Plan of Development 1 (POD 1), marking a significant milestone as Indonesia’s first coalbed methane (CBM) production sharing contract to reach full-scale development.
Crucially, PT BJEL will finance 100% of the field development costs under a capped contract price, with repayment structured through future gas sales. This arrangement removes a major financial hurdle for NuEnergy, providing the certainty needed to accelerate the transition from its current early gas sales phase of approximately 1 million standard cubic feet per day (MMSCFD) to a targeted production plateau of 25 MMSCFD.
Project Scope and Scale
The development plan encompasses drilling a combination of vertical and horizontal wells, constructing surface facilities, and installing in-field pipelines. The goal is to achieve a sustainable production rate approved under the POD, covering 209 wells across two target areas spanning roughly 33 kilometres in South Sumatra. This scale of development positions NuEnergy to become a significant player in Indonesia’s growing clean energy sector.
The collaboration agreement includes clear termination clauses, ensuring that the EPCC contract must be finalised and signed within 120 days, or the agreement will lapse. This timeline underscores the urgency and commitment from both parties to move swiftly into execution.
Backing by Major Clean Energy Players
PT BJEL is a wholly owned subsidiary of Shanghai Beijing Energy Linking New Energy Development Co Ltd, whose major shareholders include Beijing Energy International Holding Co Ltd (BJEI) and Envision Group. BJEI is a red-chip company listed in Hong Kong with total assets of approximately RMB106 billion (around US$15 billion) and a grid-connected capacity exceeding 13,692 MW. It is a dominant force in China’s clean energy market and has significant investments in Australia and other countries.
Envision Group brings expertise in renewable energy technologies, including wind turbines, energy storage, and smart energy software platforms. Their global footprint and commitment to net-zero carbon operations add strategic depth to the partnership, enhancing NuEnergy’s access to cutting-edge technology and capital.
Implications for NuEnergy and the Indonesian Energy Market
This fully funded development deal not only de-risks NuEnergy’s capital requirements but also signals confidence from major international clean energy investors in Indonesia’s unconventional gas potential. As the country seeks to diversify its energy mix and reduce carbon emissions, coalbed methane projects like Tanjung Enim offer a cleaner alternative to traditional fossil fuels.
NuEnergy’s strategy to integrate its three South Sumatra CBM production sharing contracts into a regional gas hub aligns with Indonesia’s broader energy transition goals. The successful execution of POD 1 will be a critical proof point for scaling up production and commercialising unconventional gas resources in the region.
Bottom Line?
NuEnergy’s fully funded development deal with PT BJEL sets the stage for a transformative leap in Indonesian gas production, but execution risks remain as contract finalisation looms.
Questions in the middle?
- What are the detailed terms and timeline for repayment via future gas sales?
- How will NuEnergy manage operational risks during the scale-up to 25 MMSCFD?
- What impact will this partnership have on NuEnergy’s broader strategic acquisitions and growth plans?