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NuEnergy Gas gets ready for a year of transformation

Special report: NuEnergy Gas is heading into 2026 with its first commercial coal bed methane (CBM) revenue firmly in sight as it transitions to production.

After reaching a key milestone late in 2025 at the Tanjung Enim project, the company is preparing to deliver initial gas sales of 1 million standard cubic feet per day (MMSCFD) in the first half of the year.

The move will mark Indonesia’s first CBM sales and NuEnergy (ASX: NGY) plans to ramp up revenue by developing a parcel of four strategic assets in South Sumatra.

POD 1 milestone

The final well in the early-gas program at Tanjung Enim was completed in November 2025, allowing the start of dewatering and optimising the flows.

All gas from the early wells at Tanjung Enim will be taken by Indonesia’s leading gas distributor, PT Perusahaan Gas Negara Tbk (PGN).

A Binding Gas Sales and Purchase Agreement of up to 1MMSCFD with a term of 13 years was signed in December 2025.

First revenue is expected in early 2026 from PGN, a subsidiary of state-owned Pertamina, which has secured allocation approval for the gas from Indonesia’s Ministry of Energy and Mineral Resources (MEMR).

Early sales will mark the beginning of a staged development that will ultimately scale the Tanjung Enim Plan of Development (POD 1) towards plateau production of up to 25 MMSCFD from a total of 209 planned wells.

Encouragingly for NuEnergy, all four early wells intersected thicker-than-expected coal seams, reinforcing favourable comparisons with the Powder River Basin that was a prolific CBM gas province serving the US market in the 2000s.

Indonesian Government approved acreage at Tanjung Enim covers 165 billion cubic feet (BCF) of recoverable reserves, under favourable fiscal terms that give NuEnergy a 95:5 contractor-government split.

Regional hub

NuEnergy Gas holds a combined acreage of 2,279km2 across its assets hosting a total Gas in Place of 9.7 trillion cubic feet (TCF).

With revenue set to flow from Tanjung Enim, NuEnergy will advance its other CBM Production Sharing Contracts (PSCs) in line with its strategy of integrating them into a large-scale regional gas supply hub.

The most advanced Tanjung Enim PSC is just 35km from major trunklines feeding the large and expanding Javanese market to the south, as well as established export pipelines north to Singapore and Malaysia.

Next in line and providing scope for integrated development is the Muara Enim PSC which is at the Preliminary Plan of Development (Pre-POD) stage.

At the third asset, Muralim PSC, dewatering and flaring tests have continued following the 2025 gas discovery report.

Demand pull, government push

Indonesia is home to the world’s fourth-largest population and Southeast Asia’s biggest economy, which is growing at a very robust ~5% a year.

Gas demand is also forecast to power ahead, with PLN tipping a 40% increase by 2030 as new gas-fired power plants come online to replace coal and diesel assets.

The Government is targeting a doubling of domestic gas production by 2030 as a way to bridge the looming energy supply-demand gap and use gas as a key transition fuel in its push to meet its 2060 net-zero goal.

To attract investment into the CBM sector, Indonesia has shifted from traditional cost-recovery terms to a simplified gross-split PSC model, giving developers like NuEnergy its 95:5 contractor split.

“We’re looking forward to advancing our early gas sales initiative from Tanjung Enim and building Indonesia’s largest integrated CBM supply from our four co-located assets,” CEO Lim Beng Hong said.

“With the highly attractive 95:5 contractor split terms, these assets have the potential to deliver significant long-term value for shareholders while also supporting Indonesia’s growing demand for cleaner, reliable energy.”

Source: Stockhead