NuEnergy’s Tanjung Enim build reaches 48% as Q1 2027 gas target holds

Tanjung Enim construction moves from plan to build

NuEnergy Gas Limited (ASX:NGY) has reached the most tangible stage yet in its push to commercialise Indonesian coal bed methane, with construction underway at the Tanjung Enim project and first gas sales still targeted for the first quarter of calendar 2027.

The early production facilities owned by NuEnergy were about 48% complete at 30 September, with civil works substantially finished apart from drainage and piping works well advanced. Technical documentation and equipment inspections were also underway. PGN’s separate CNG Mother Station, which will support gas offtake, was about 23% complete.

The infrastructure is being built for the 1 million standard cubic feet per day Early Gas Sales Initiative. NuEnergy said dewatering, gas flaring and well optimisation continued across four production wells to assess reservoir performance and improve deliverability before commissioning. The Q1 2027 sales target remains conditional on completing both facilities and securing associated permits.

Strategic status adds government recognition

Indonesia formally recognised the Tanjung Enim PSC as a National Strategic Project in September, in a decision ratified by President Prabowo Subianto. NuEnergy said the designation should support coordination with the Ministry of Energy and Mineral Resources and other authorities, particularly around land access, permitting and infrastructure approvals.

The company has now started securing land access for the full Tanjung Enim Plan of Development. Its optimised development concept calls for 13 pairs of Multi Seam Drainage Intercept wells over the project life, rather than the 209 vertical wells initially contemplated. NuEnergy said the revised approach is expected to improve development efficiency and reduce environmental impact while targeting the approved 25 million standard cubic feet per day production profile, comprising the 1 MMSCFD initiative and a 24 MMSCFD full-scale development.

Funding improves, but related-party debt remains

The quarter included completion of an A$3.05 million placement at A$0.038 a share, which NuEnergy said would fund the early sales initiative, the full-scale Tanjung Enim development and work towards Plans of Development for its other Indonesian assets. The raise followed the earlier A$88 million development contract with PT Beijing Energy Linking, under which the contractor is to finance 100% of the full-scale field development for an agreed US$88.016 million contract price, recoverable from future gas sales.

NuEnergy reported A$2.677 million in cash at quarter-end, after A$669,000 of net operating cash outflows during the quarter. On its current outflow rate, the Appendix 5B indicates about four quarters of funding. That calculation does not include unused external facilities, of which none were available, and the company also has A$3.144 million of fully drawn loans from related entities that are unsecured and repayable on demand. The placement itself was reported as approximately A$3.05 million, while the cash-flow statement recorded A$2.794 million of equity proceeds.

Three other PSCs move towards development decisions

NuEnergy extended the exploration periods for its Muralim and Muara Enim PSCs to 12 August 2027, giving it more time to prepare POD proposals and complete technical studies. The Muara Enim II exploration period was extended to 12 February 2028, with a coring programme awaiting environmental and spatial-use approvals.

The immediate test is execution rather than acreage accumulation. Tanjung Enim must complete its facilities, clear permitting and demonstrate sufficient well deliverability for the Q1 2027 sales target, while the company’s cash position and on-demand related-party loans leave limited room for prolonged delays.