CBM Asia signs MoU to study CBM-to-LNG facility

By Alexander Ginting

Vancouver-based firm CBM Asia Development Corp. announced Thursday that it has signed a non-binding Memorandum of Understanding (MoU) with an undisclosed Multinational Gas Company (MGC) to conduct a technical and market study of a CBM-to-LNG facility(s) with a potential capacity of up to 50 MMcf/d in South Kalimantan.

As specified under the MoU, CBM Asia's responsibilities are : To conduct a commercial analysis on the CBM development strategy required to meet the proposed LNG facility capacity and to produce a technical study to determine gas production schedule, reserve certification and natural gas delivery points.

MGC's responsibilities are: To conduct market analysis on the demand for LNG and to undertake infrastructure study on construction of the LNG facility(s) and related logistical groundwork.

Each party is responsible for its own costs in relation to the study.

On completion of the study, CBM Asia and MGC would jointly decide on the feasibility of the project with a view to entering into a definitive agreement on the establishment of a business relationship. The proposed business structure would require CBM Asia to supply natural gas whereas MGC would off-take gas, build own and operate the LNG facility, and market/deliver the LNG to the end consumers. The potential CBM field development, gas sales contract, LNG facility construction and other related works would remain subject to local, regional and central government approvals.

CBM Asia holds participating interests in five production sharing contracts for CBM in Indonesia, with the right to farm-into 4 additional PSCs.

Editing by Reiner Simanjuntak