KUALA LUMPUR (Sept 9): Globaltec Formation Bhd (KL:GLOTEC) said on Tuesday its Australian unit has secured gas allocation approval from the Indonesian government.

The approval allows NuEnergy Gas Ltd to sell one million standard cubic feet per day of coal bed methane to Indonesia’s state-owned gas distributor PT Perusahaan Gas Negara Tbk, the company said in an exchange filing. The next step is to finalise the gas sale and purchase agreement, it noted.

The sale forms the initial phase of the larger plan to produce up to 25 million standard cubic feet per day of gas approved under the Tanjung Enim production sharing contract of Development 1 contract area.

“NuEnergy has completed drilling and is currently dewatering three of the four wells planned under the early gas sales Initiative, with controlled gas production progressing as expected,” the company said. “The drilling of fourth well is currently ongoing.”

NuEnergy, a 30%-owned unit of Globaltec and listed in Australia, holds three onshore coal bed methane production sharing contracts in South Sumatra and plans to integrate them to create a hub catering to Indonesia’s expanding energy market.

The company had secured approval for its plan of development from Indonesia’s Ministry of Energy and Mineral Resources in June 2021 for the gas field.

The development plan features 209 wells, covering 13% of the total Tanjung Enim acreage, with certified reserves estimated at about 164.89 billion standard cubic feet. Production is set to start at one million standard cubic feet per day.