Jadestone Energy plc (the “Company”), an independent oil and gas production company focused on the Asia-Pacific region, is pleased to announce that a gas sales agreement (“GSA”) for the Akatara field, located within the Lemang production sharing contract (“PSC”), was signed at an industry conference in Indonesia.
Paul Blakeley, President and CEO commented:
“Reaching this key milestone less than 12 months after closing the acquisition of our original stake in the Lemang PSC is testament to the hard work, rigour and focus of the Jadestone team, and they should be proud of what they have achieved. I would also like to thank the Indonesian Government and the gas purchaser PLN for their positive approach during the GSA negotiations.
“The development of the Akatara gas field will not only displace coal in Indonesia’s energy mix, thereby assisting the transition to a lower carbon economy, but will also deliver LPGs for domestic use in the local market. Once onstream, Akatara will support our growth strategy, while at the same time increasing the proportion of gas in our production mix. Fixed-price, low-opex gas production provides a balance to our existing oil assets, and has the added benefit of reducing the GHG emissions intensity of the Company’s operations. Signature of the GSA is the key commercial hurdle for the project and increases our confidence in taking a final investment decision for the project in the first half of 2022, with production expected onstream in the first half of 2024.”Jadestone currently has a 90% interest in the Lemang PSC, and on 24 November 2021 announced the acquisition, subject to customary approvals, of the remaining 10% interest in the PSC. The local government has a back-in right of up to 10% (uncarried interest) at the time of development sanction.
The Akatara GSA is between Jadestone and PT Pelayanan Listrik Nasional Batam (“PLN”) as buyer. Some of the key terms of the Akatara GSA are detailed below, and are consistent with the heads of agreement executed between Jadestone and PLN, as announced on 6 July 2021:
- Daily contract quantity (“DCQ”) of 20.5 BBtu/d commencing in Q1 2024
- Gas price of US$5.60/mmBtu
- Annual take-or-pay quantity set at 90% of the adjusted annual contract quantity
- Maximum daily quantity set at 110% of DCQ
The Akatara gas field has been independently estimated to contain a 2C gross resource (pre local government back-in rights) of 63.74 bscf of sales gas, 2.45 mm bbls of condensate and 5.64 mm boe of LPG, equating to a combined 18.7 mm boe of resource. Jadestone intends to pursue a low-cost development of the field, including efficient re-use of existing wells and infrastructure, thereby minimising incremental impact on the local environment. Several further initiatives to reduce GHG emissions and enhance the environmental performance of the Akatara development are also being considered as part of the detailed engineering and development optimisation studies. As previously disclosed, the Company anticipates a gross development cost for the field prior to first gas of US$94 million.