KUALA LUMPUR (June 30): Globaltec Formation Bhd's (KL:GLOTEC) 70%-owned subsidiary Australian clean energy company, NuEnergy Gas Ltd, has officially entered into a US$88 million (RM358.16 million) contract with Chinese clean energy investment company PT Beijing Energy Linking (PT BEL) to further its coal bed methane project in Tanjung Enim, Indonesia.

According to a filing with Bursa Malaysia, the US$88 million contract covers the drilling, construction, testing and completion of natural gas production for PT BEL until they reach a sustainable production plateau of 24 million standard cu ft per day (MMSCFD).

A key feature of this contract is that it will allow PT BEL to recover the contract price from future gas sales revenue, reducing NuEnergy’s upfront capital funding. Tanjung Enim is the first approved coal bed methane development plan approved in Indonesia, which aims to seamlessly transition the natural gas production facility from a 1MMSCFD production to a full-scale 25MMSCFD development.

The first definitive implementation agreement arising from the collaboration agreement signed in April. The contract is to last from June 30 to Aug 3, 2039.

Globaltec’s shares were 0.59% lower at 85 sen on Tuesday, valuing the company at RM227.4 million. Year to date, it is up 34.13%.