IGA Presentation Presented by : President - Indonesian Gas - - PowerPoint PPT Presentation

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IGA Presentation Presented by : President - Indonesian Gas - - PowerPoint PPT Presentation

Dec 07, 2022 261 likes •491 views

IGA Presentation Presented by : President - Indonesian Gas Association 1. Introduction Indonesia Macro Economics GDP Growth Rate 7.0% 6.0% Item 5.0% 4.0% Population - 2010 237,641,326 3.0% GDP (Billion Rp) 2,463,242 2.0% 1.0% GDP

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SLIDE 1

IGA Presentation

Presented by : President - Indonesian Gas Association

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SLIDE 2
  • GDP growth for Indonesia is relatively stable at

the level 4% to 6%

  • With the population, gas consumption, electricity

consumption is increasing

  • Purchasing power of most domestic customer is

increasing although still below the global market

  • Domestic gas demand is progressively increasing

– reduce the oil subsidy.

GDP Growth Rate

Source : BPS

Item

Population - 2010 237,641,326 GDP (Billion Rp) 2,463,242 GDP growth rate (%) 6.46% GDP per capita (USD) 4,700 Inflation rate (%) 3.79% Electricity Production (GWh) 177.256 Electricity Consumption (GWh) 159.867 Electrification Ratio (%) 67.98% Natural Gas Production (MMSCF) 3,256,379 Natural Gas Consumption (MMSCF) 3,076,919

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

  • 1. Introduction

Indonesia Macro Economics

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SLIDE 3
  • 1. Introduction

Natural Gas Role in Indonesia Energy Mix

3

  • 2,000

4,000 6,000 8,000 2015 2020 2025 Oil. 49.7% Gas. 20.1% Coal. 24.5% NRE. 5.7% ENERGY MIX 2010 2984 MBOEPD

  • Oil. 23.7%

Gas. 19.7% Coal. 30.7% NRE. 25.9%

ENERGY MIX 2025 7134 MBOEPD

*) AAGR: Average Annual Growth Rate

  • Ref. SKK Migas
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SLIDE 4

500 1000 1500 2000 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

MBOEPD

PEAK 1977

Plateau stage Decline 2-3%

*) Outlook per 29 Januari 2013 not included unconventional gas production

PEAK 1995

Domination of Oil Increasing role of natural gas

  • Ref. SKK Migas

The increasing role of natural gas in fulfilling energy demand

  • 1. Introduction

Indonesian Oil and Gas Production Profile

  • il

gas

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SLIDE 5
  • Ref. DG Oil & Gas

5.56 1.29 9.01 15.79 50.94 4.24 5.73 17.36 3.83 15.22 23.91

104.71 TSCF 48.18 TSCF 152.89 TSCF

*as of 1 January 2011

Indonesia conventional gas reserves are scattered; infrastructure development are required to bring natural gas to market/demand

  • 1. Introduction

Indonesia Conventional Gas Reserve*

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SLIDE 6

Deep Water Area > 200m

Western part Eastern part

6 PSC’s in deep water areas

  • 20 prospects and 40 leads in Mesozoic; 3 leads in Palezoic.
  • Total Risked Resources 0.39 BBO + 5.7 TCF.

Mostly Tertiary

  • Ref. SKK Migas

Producing natural gas from conventional reserves is becoming more and more challenging.

  • 1. Introduction

Challenges in Natural Gas Production

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SLIDE 7

CBM

  • Estimated total reserves : 453.30 TCF
  • Total CBM basin : 11
  • Contracts signed (2008 - April 2012) : 50 CBM PSCs

Shale Gas

  • Still in early stage
  • Shale gas potential is currently investigated/studied

Source : DG of Oil & Gas

Indonesia has a huge and promising non-conventional gas reserves as alternative sources to fulfill the demand

  • 1. Introduction

Unconventional Gas Development

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SLIDE 8

Economic Government & Infrastructure Technical Surface & Environment

Surface & Environment

  • Successful dewatering
  • managing environmental, water, and land related issues
  • Managing overlapping with coal miners
  • Community & security

CBM Development

Key Success Factors & Enabler

GOI & Infrastructure

  • Strong GOI support
  • n developing

regulation regarding water disposal, land use, mineral

  • Government policies

and fiscal incentives / contract terms

  • Access to gas

markets and pipeline infrastructure

  • Efficient use of

existing infrastructure Deliverability & economic

  • Cost effective drilling,

completions and

  • perations
  • Attractive gas price and

market

  • Fiscal environment, PSC

terms Technical

  • Coal presence, coal rank, thickness, burial hisstory
  • Gas content, gas saturation, gas composition
  • Permeability, well spacing, pilot
  • Sufficient gas-in-place & deliverability

Enabler:

  • PSCM strategy
  • Standardization
  • Factory Model
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SLIDE 9

Preliminary Screens for Commercialization of Unconventional Gas

Cost Volume Surface condition Revenue Political & Market Infrastructure Data −Geologic −Economic −Regulatory Filter Criterion

Access depend on technical, economic and environmental viability

Deliverability

  • Coal Depth
  • Coal Thickness
  • Coal Hydrology
  • Coal Seam Type
  • Coal Rank
  • Resource Scale
  • Permeability
  • Cleating
  • Dewatering
  • Saturation
  • Maceral content
  • Compartments

Darinage area

  • Drilling &

completion

  • Govt Take
  • Water disposal
  • Pipeline
  • Plant

presence

  • CO2 disposal
  • Gas Price
  • Gas demand
  • Value chain

synergy

  • Demand growth
  • Incentive
  • Environmental
  • Community

issues

  • Service

industry

  • Surface issues
  • Overlapping

with coal miners

  • GOI support
  • Environment

al agencies and public ’ support

  • Proximity to

Natural gas pipelines

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SLIDE 10

Greater Uncertainty, Lower Rates

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SLIDE 11

Stimulate CBM Investment

The pace of CBM development depends largely on government ability to attract investment:

  • Stable and favorable investment climate
  • Addressing CBM industry issues proactively
  • CBM favorable regulations and ease of implementation
  • Priority to Oil and Gas company on overlap area
  • Development and availability of infrastructure
  • Open access to extensive pipeline infrastructure
  • CBM fired electricity has dispatch priority
  • Sharing facilities - share excess capacity of its facilities with CBM contractor

under proportionate cost sharing principle.

  • Financial incentives to spur investments
  • fiscal regime for CBM
  • Pre – POD production
  • Provide tax exemption - during exploration
  • Market reforms to stimulate CBM priority and economic gas pricing
  • Producer can sell directly to consumer
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SLIDE 12

Indonesia Gas Strategy

  • Domestic:
  • Near-term strategies are focused to meet domestic gas demand and minimize

shortages in some areas by accelerating field development;

  • Long-term strategy to be focused on meeting the expected increase demand from

industrial sectors which would provide optimum value and enhanced economic growth (requires exploration, infrastructure planning);

  • Capturing International market:
  • Near term strategy to maintain existing and traditional Asia Pacific markets based
  • n gas deliverability and commerciality of the existing projects. Improve the

commerciality of the high investment gas field through LNG and Pipeline marketing by capturing premium international market;

  • Long term strategy to use Indonesia LNG and pipeline gas exports as the avenue

to preserve the investment climate in Indonesian gas business pending the readiness of domestic market

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SLIDE 13

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Domestic Export

Shifting Paradigm in managing natural gas in Indonesia to promote domestic utilization. There are challenges in

  • rder

to supply domestic market such as: a. The price gap between import and domestic creates challenge in upstream economic

  • b. Domestic infrastructure have

not fully developed creating uncertainty in domestic market utilization The trend to increase domestic utilization and reduce export

  • 2. Upstream Challenges

Development of Domestic Gas Utilization

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SLIDE 14

Courtesy: MEMR

Domestic use of natural gas is limited due to the challenges in matching the production with readiness in infrastructure and domestic demand

  • 2. Upstream Challenges

Domestic Infrastructure and Market Readiness

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SLIDE 15

The total length of gas transmission pipe (open access): 3,633.69 km, for distribution in Sumatera: 689.08 km and in Java: 3,144.66 km;

LPG refinery installed capacity: 3,6 MMTPA, LNG refinery installed capacity: 42,09 MMTPA;

Total capacity of LPG transportation: land transportation (512 MT) and sea transportation (1,455.9 MT);

CNG land transportation: 15 trucks with total capacity of CNG 55,470 M3 ;

  • LPG storage capacity 84,520 MT;
  • Ref. SKK Migas
  • 2. Upstream Challenges

Constraints in Domestic Comercialization

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SLIDE 16
  • 2. Upstream Challenges
  • A new policy in tax holiday in exploration actvities to stimulate exploration

in the search of new reserves.

Encouraging Development Common challenges

  • Overlapping and sometimes conflicting policies and regulations between

local and central government

  • Challenges in the synchronization of production with infrastructure and

domestic market development causing uncertainty in domestic utilization.

  • The regulation and policies for unconventional gas are not fully

established.

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SLIDE 17
  • 3. Infrastructure Development Challenges

Many sections to be developed

Source : Ministry of Energy & Mineral Resources Decree No. 2700.K/11/MEM/2012

  • Constraints of Gas Development:
  • Geographical constraints:
  • Archipelago country;
  • Considerable distance between source &

market;

  • Domestic Market constraints:
  • Subsidized liquid fuel price;
  • Low consumer’s purchase power leads to low

buyer willingness to pay;

  • Low public awareness toward clean energy

utilization;

  • Supply:
  • Lots of marginal gas reserves
  • Indonesia Perspective & focus:
  • Various gas transportation mechanism to be

developed (Mini LNG, CNG and pipelines)

  • Provide a better business climate to support

aggressive gas development;

  • Proving up gas reserves;
  • New discoveries both conventional and

unconventional resources.

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SLIDE 18

Connecting Gas Sources to the Market-LNG

LNG Plant

Location : Lhokseumawe, Aceh Capacity : 12.3 MTPA (design) – 6 trains Operations : 2 – 3 trains Production : 1978 – now Shareholders : Pertamina 55%, EMOI 30%, JILCO 15%

LNG Plant

Location : Bontang, East Kalimantan Capacity : 22.5 MTPA – 8 trains Operation : 6 – 7 trains Production : 1977 – now Shareholders : Pertamina 55%, Vico 20%, JILCO 15%,Total 10%

LNG Plant

Location : Tangguh, Papua Capacity : 7,6 MTPA – 2 trains Operation : 1-2trains Production : 2009 – now Shareholders : BP, CNOOC, Mitsubishi, etc

LNG Receiving Terminal

Location : Labuhan Maringgai, Lampung Capacity : 2-3 MTPA Project Owner : PGN (100%) LNG Source : Domestic & International Sources Main Consumer : Poweplants and industry On-stream Target : 2014

LNG Receiving Terminal Location : Jakarta Bay

Capacity : 3 MTPA Project Owner : Nusantara Regas Pertamina(60%) PGN(40%) LNG Source : Bontang and others Main Consumer : Powerplants and industry On-stream Target : Q1 - 2012

LNG Plant

Location : Central Sulawesi Capacity : 2 MTPA LNG Plant Shareholders : Mitsubishi 44,92%, Kogas 14,98%, PHE 29%, Medco 11,1% Status : FID approved On-stream Target : 2014

LNG Plant

Location : South Maluku Capacity : 4.5 MTPA LNG Plant Shareholders : Inpex Status : - On-stream Target : 2016

LNG Receiving Terminal

Location : Central Java Capacity : 2-3 MTPA Project Owner : Pertamina (100%) LNG Source : Domestic & International Sources Main Consumer : Poweplants and industry On-stream Target : -

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SLIDE 19

5 10 15 20 25 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Cumulative Volume (TCF)

Gas Domestic Utilization

Fertilizer Electricity Industry 5 10 15 20 25 30 2005 2006 2007 2008 2009 2010 2011 2012

MTPA

Indonesian LNG – Export Realization

Domestic USA China Taiwan South Korea Japan

Lifting, 4.7% Fertilizer; 8,1% Electricity, 12.3% Industry + CO2, 16.8% Citygas, 0.003% LNG Domestic, 0.4% LNG Export, 40.0% LPG, 3.7% Gas Pipe Export, 13.9%

  • Ref. SKK Migas
  • 2. Downstream Challenges

Indonesian Gas Utilization

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SLIDE 20

Gas Allocation Policy Domestic Demand

  • Utilization is prioritized for Domestic demand with consideration on economic of field
  • development. The prioritized segments are as follows:
  • Oil lifting;
  • Fertilizer feedstock;
  • Power plants;
  • Fuel or feedstock for industry;
  • The Domestic Market Obligation (DMO) is stated in the amount of 25% of the new

production;

  • There is specific ramp up allocation of gas for transportation application up to 2025;
  • When there are natural gas shortage in specific area due to limited natural gas resource

and infrastructure, the fulfillment for this area, existing gas allocation can be reallocated

  • r swap as contingency plan.
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SLIDE 21

Conclusions

  • Huge potential of natural gas reserve for development – both conventional and

unconventional;

  • Domestic gas price shall be competitive to stimulus the upstream investment and deliver

the capability to develop national competitiveness;

  • Infrastructure planning :
  • Comprehensive and integrated analysis of gas development with the framework of

National Energy Demand and Supplies

  • Open for new technologies adoption that capable to bring more options and greater

competitiveness

  • Planning domestic security of supply should take full account of non-exportable energy

sources

  • Coal (lower grade)
  • Renewables (hydro, geothermal)
  • Gas:

 CBM potential.  Coal gasification potential.  Shale gas