NuEnergy eyes early 2026 gas production in Indonesia after flaring milestone

• Gas flaring at NuEnergy’s Tanjung Enim project confirms stable flow as the company advances towards first production in early 2026
• NuEnergy has an initial gas sales initiative with Indonesian state-owned distributor Perusahaan Gas Negara (PGN) and is set to sign a Gas Sales and Purchase Agreement
• As Indonesia’s first commercial CBM development, Tanjung Enim will also serve as a hub for broader expansion across NuEnergy’s acreage in South Sumatra

Special report: NuEnergy Gas has achieved a key operational milestone, initiating gas flaring at its Tanjung Enim Production Sharing Contract (PSC) in South Sumatra, Indonesia.

The flaring marks a critical pre-production step, confirming sustained gas flow and stable well performance as dewatering continues across three completed wells.

With gas visibly flowing to surface, NuEnergy (ASX:NGY) is on the way to transforming more than a decade of investment and deep technical groundwork into commercial gas production.

It’s also a landmark first for Indonesia’s coal bed methane (CBM) industry in the energy-hungry country with an annual growth rate of more than 5%.

Tanjung Enim is expected to pave the way for follow-on developments, with government approval in place to exploit 105 billion cubic feet (BCF) of saleable gas over 15 years.

Guaranteed early sales in sight

During the September quarter NuEnergy also completed three out of four planned wells of its Early Gas Sales Initiative targeting initial sales of 1 million standard cubic feet per day (MMSCFD) to Perusahaan Gas Negara (PGN).

As Indonesia’s leading gas distributor, PGN is a subsidiary of state-owned PT Pertamina.

The initiative received full endorsement and has gas allocation approved from the country’s Ministry of Energy and Mineral Resources, as NuEnergy now prepares for the formal signing of a Gas Sales and Purchase Agreement (GSPA) with PGN.

This agreement is expected to unlock first revenues in early 2026.

Scaling up for growth

The GSPA represents the first phase of the broader 25 MMSCFD production plan approved under Tanjung Enim’s first Plan of Development. NuEnergy plans to scale output to full production within three years.

Other PSCs in NuEnergy’s project area include Muralim, Muara Enim and Muara Enim II, which are at varying stages of appraisal and regulatory progression.

Dewatering, pre-POD submissions and fieldwork are well underway as the company focuses on monetising reserves.

The company ended the September quarter with approximately A$2.4 million in cash and expects near-term revenues to fund growth across its broader South Sumatran portfolio and strategic acquisitions.

NuEnergy’s strategy is to integrate all its PSCs in South Sumatra into a CBM hub, with the longer term goal to provide a sustainable and robust energy to the local market and Indonesia.

Supportive policy and market backdrop

Indonesia’s government is targeting a doubling of domestic gas production by 2030 as it seeks to bridge an emerging supply-demand gap and position gas as a key transition fuel toward its 2060 net-zero goal.

A suite of fiscal incentives and regulatory reforms — including improved domestic gas pricing and favourable PSC terms – has been introduced to attract investment in gas development, directly benefiting early movers such as NuEnergy.

Adding to its first-mover advantage, NuEnergy’s acreage is strategically located onshore in South Sumatra, close to major gas transmission infrastructure that serves both domestic industrial users and export markets.

This article was developed in collaboration with NuEnergy Gas, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.