How Conrad Asia Energy (ASX:CRD) Is Advancing the Mako Gas Project Toward First Gas in 2027

Sonal Goyal

03 November 2026 10:02 PM AEDT

How Conrad Asia Energy (ASX:CRD) Is Advancing the Mako Gas Project Toward First Gas in 2027

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Key Highlights

Nations farm-down completed with US$4 million second Tranche of cash consideration received after Indonesian Ministry of Energy and Mineral Resources approval on 27 August 2026
Over 90% of Mako Capital contract commitments have been signed or awarded, with the project now in full-scale fabrication
Donor rig Valaris 104, to be converted into the Mako Mobile Offshore Production Unit, has been safely towed through the Strait of Hormuz and is now at an Indonesian fabrication yard
First gas from the Mako Gas Project remains on schedule and on budget for Q4 2027

A Gas Development Gathering Pace

Conrad Asia Energy Ltd (ASX:CRD) entered the September 2026 quarter with a gas development project that was advancing through its most capital-intensive phase, and it exited that quarter with its key financing milestone cleared and its fabrication program underway.

The company's primary asset is the Mako Gas Project, operated through its Subsidiary West Natuna Exploration Limited within the Duyung Production Sharing Contract in Indonesia. At each major milestone review during the quarter, management reiterated the same message: the project is on schedule, on budget, and tracking first gas in the fourth quarter of 2027.

That message carries more weight when matched against the operational progress the company delivered between July and September 2026.

Farm-Down Completed, Cash Received

The most significant corporate event of the quarter was the completion of the farm-down of a 75% non-operated participating interest in the Duyung PSC to PT Nations Natuna Barat, a subsidiary of PT Nations Petroleum. The transaction received approval from Indonesia's Ministry of Energy and Mineral Resources on 27 August 2026, and all remaining conditions were subsequently met.

This included the receipt of US$4 million from Nations — the second tranche of cash consideration under the farm-down agreement. The completion of this transaction means Conrad has now substantially derisked the funding structure of the Mako development, with a well-capitalised partner taking the majority of the project's participating interest.

Fabrication Underway, Contracts Locked In

From a construction standpoint, the quarter saw the Mako project transition from development planning into full-scale fabrication. More than 90% of capital contract commitments have been signed or awarded, representing a significant de-risking of the project's cost structure.

Central to the fabrication process is the Valaris 104, a donor rig that will be converted into the Mako Mobile Offshore Production Unit. During the quarter, the rig was safely towed through the Strait of Hormuz and arrived at the fabrication yard in Indonesia, where conversion work is now underway. This logistical milestone is meaningful for the schedule: the MOPU is a long-lead item critical to first gas, and its safe delivery to the yard keeps the project's timeline intact.

Indonesia's Gas Sector as Backdrop

Mako sits within the broader context of Indonesia's energy transition ambitions. The country remains one of Southeast Asia's largest Natural Gas producers and consumers, and the government has consistently prioritised domestic gas Supply to support industrial growth and energy security. Gas projects with clear development pathways and established PSC frameworks, like Duyung, generally benefit from a supportive regulatory environment.

Risks

The Mako project, despite its progress, is not without execution risk. Offshore fabrication programs are subject to contractor performance, weather delays, and supply chain disruptions that can affect the construction timeline. The 2027 first-gas target, while credible given current progress, is inherently dependent on the fabrication program proceeding without material setbacks.

The farm-down to Nations also means Conrad holds a minority 25% interest in the Duyung PSC. While this reduces capital exposure, it also limits Conrad's operational control over development decisions and cost management as the project moves into its critical construction phase.

What to Watch Next

The most important near-term milestones for Mako relate to fabrication progress reports and any updates on the remaining capital contract commitments. Investors should watch for confirmation that 100% of contracts have been awarded and for progress updates on the MOPU conversion at the Indonesian fabrication yard. Any change to the first-gas timeline — either a delay or a pull-forward — would be a material development for the company's market positioning.

Sector Context

The Southeast Asian gas development sector has seen increased activity as regional energy Demand growth continues to outpace the development of new renewable capacity. Gas-to-power projects and industrial gas supply agreements are driving Investment into offshore projects across Indonesia, Vietnam, and Malaysia. Mako, as a near-term development with established offtake discussions and a contracted fabrication program, fits within this broader regional trend.

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