CEB Resources has agreed with PT Akar Golindo (PTAG) to assess the technical and commercial prospects for gas production in Indonesia creating a beach head into the the country’s gas and power markets
Under the terms of the agreement CEB and PTAG will undertake a technical evaluation in and around the Tuba Obi East oil and gas concession in the South Sumatran Basin.
They will investigate the potential to sell the gas directly to the Singapore market, via the major transmission gas pipeline, about 12 kilometres away.
Alternatively there is the opportunity to monetise the gas via the construction and operation of an independent power plant, selling electricity into the Sumatran power grid.
Isle of Man-registered CEB said that a Sumatran gas project secured a long-term gas sales contract at $9.45 per Million British Thermal Units (MMBTU), which is amongst the highest gas prices in the world.
Demand for electricity continues to rise sharply with the country’s electricity provider PLN setting the ambitious goal of increasing supply by some 35,000 MW over the next four years. With only 9,000MW having been firmed up thus far, CEB believes investment in this sector is particularly attractive.
Managing Director David Whitby, said: “The Tuba Obi East study agreement is instrumental in the realisation of our long-term strategy, representing a beach head into the attractive Indonesian gas and power markets. This initiative complements our oil studies which are progressing very well.