The gas is produced during the dewatering stage at the Sekayu CBM production sharing contract (PSC).
Under the terms of the MOU, the Sekayu CBM PSC has been approved by Indonesia’s upstream oil and gas regulator, BPMigas to sell coal bed methane produced during the dewatering stage for local power generation.
CBM Asia CEO and president Alan Charuk said this MoU will facilitate the early sale of coal bed gas from the Sekayu PSC.
"We are currently assisting Medco’s engineering staff to design the pilot production program, expected to be initiated during the first quarter of 2012" added Charuk.
CBM Asia announced its NI 51-101 compliant best estimate of 1.062 trillion cubic feet of unrisked, recoverable gross prospective gas resources earlier this November.
The firms are working to define terms of a gas sales and purchase agreement that would provide the basis for gas sales and deliveries which are expected to commence during 2012.
