INTEGRATING OFFSHORE AND ONSHORE NATURAL GAS INFRASTRUCTURES TO - - PowerPoint PPT Presentation

INTEGRATING OFFSHORE AND ONSHORE NATURAL GAS INFRASTRUCTURES TO MARKETS

by Danny Praditya Director of Commerce PT. Perusahaan Gas Negara (Persero) Tbk

Disclaimer: The information contained in our presentation is intended solely for your personal reference. In addition, such information contains projections and forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on assumptions subject to various

• risk. No assurance can be given that further events will occur, that projections will be achieved, or that the Company’s assumptions are correct. Actual results may differ

materially from those projected.

Table of content

1. PGN and the history of Indonesia Domestic Gas Utilization 2. PGN Business Model 3. PGN Network Infrastructure – Transmission and Distribution 4. Challenges in Providing Natural Gas for Power Market 5. Challenges in Providing Natural Gas for Industrial Estate Market 6. Business Opportunity- Multi Modal Gas Supply 7. Closing Remarks

PGN and the history of Indonesia Domestic Gas Utilisation

PGN is Indonesia Gas SOE with strong commitment to increase domestic gas utilization through national strategic gas infrastructure development and gas market initiator

1000 2000 3000 4000 5000 6000 7000 8000 9000

• 0.5

1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

The Growth of Infrastructure and Gas Utilisation in Indonesia

Pipa Gas Hilir Pipa Hulu Menjadi Hilir Konsumsi Gas Domestik Ekspor Gas SSWJ Transmission Developed Grissik – Batam Transmission Developed FSRU Lampung Developed FSRU NR Developed

PGN Business Model

Leading Player in Indonesia Natural Gas Transmission and Distribution

PGN manages more than 120.000 of Indonesia domestic gas clients. We serve all segment of gas user from industrial, power plant, commercial to household and transportation.

PGN Network Infrastructure – Transmission and Distribution

North Sumatera and Riau Island distribution network 761 km Western Java, Lampung, Palembang distribution network 2,707 km East Java distribution network 761 km

Tarakan Sorong

• 1. Area Medan
• 2. Area Batam
• 3. Area Pekanbaru
• 4. Area Palembang
• 5. Area Lampung
• 6. Area Cilegon
• 7. Area Tangerang
• 8. Area Jakarta
• 9. Area Bogor

10.Area Bekasi 11.Area Karawang 12.Area Cirebon 13.Area Semarang 14.Area Surabaya 15.Area Pasuruan 16.Area Sidoarjo 17.Area Tarakan 18.Area Sorong Area of Operation PGN Gas Infrastructure represent more than 70% natural gas downstream infrastructure in Indonesia This only covers of 30% infrastructure required

Challenges in Providing Natural Gas for Industrial Estate Market

Sourcer: RPJMN 2015-2019

Bintuni Bay Industrial Estate Oil and Gas Industry and Fertilizer Bitung Bay Industrial Estate Agro Industry and Logistic Morowali Industrial Estate Smelter Ferronickel, Stainless steel industry and its derivatives PaluIndustrial Estate Rattan, Rubber, Cacao (agro) Based Industry and Smelter Konawe Industrial Estate Ferronickel Smelter Industry, Stainless Steel and Downstream Product Buli Industrial Estate Smelter Ferronickel, Stainless steel industry and its derivatives Bantaeng Industrial Estate Ferronickel Smelter Industry, Stainless Steel and Downstream Product Batu Licin Industrial Estete Steel Industry Landak Industrial Estate Rubber Industry, CPO Ketapang Industrial Estate Alumina Industry Kuala Tanjung Industrial Estate Aluminums Industry, CPO Tanggamus Industrial Estate Maritime Industry and Logistics Sei Mangkei Industrial Estate CPO Processing Industry Jorong Industrial Estate Downstream of Mineral Resources (Bauxite), Palm Oil

Ref: World Bank, BI, BPS

Indonesia Continuous Economic Growth Means Continuous Energy Demand: Increase Electricity Demand The growth of Electricity Demand and the Indonesia energy mix for Electricity Generation plan define the gas demand for electricity in 2022 will reach 440.000 Gwh

Economic Growth and Rapid Electricity Demand Growth

Challenges in Providing Natural Gas for Power Market

GAS RESERVE (TSCF) PROVEN = 108.40 TSCF POTENCIAL = 48.74 TSCF TOTAL = 157.14 TSCF

The electricity demand is spread out through the archipelago making PLN as a gas user with multi destination requirement. The diverse location will define the diverse infrastructure cost and PGN as National Gas company is striving its best efforts to serve the demand.

Recommendation Multi Modal Gas Supply

To serve potential customers who have high ability to pay, low demand and located in scattered location, PGN will use multi-moda gas transportation, this includes CNG and Mini LNG.

IPP § Eastern Sumatera § Southern Sumatera § Bangka – Belitung § Pontianak § Northern Sumatera § Dumai § Pontianak § Bangka – Belitung § Southern Sumatera § Bali § Lombok – NTB § NTT § Lampung § Southern Sumatera § Bali § Lombok § Break-Bulking § Mini LNG Ship § Mini LNG Ship § CNG Trucking § CNG Marine Moda

CNG Peaker Mini LNG Eastern Mini LNG Western FSRU Lampung

Key Recommendations

• The most promising markets which are in proximity to PGN’s planned Mini LNG terminals in Western & Eastern area and can be

supplied either through LNG trucks or via a ISO tank intermoda/LCT carrier

• Based on the gas supplies it can secure, Gagas can also examine the potential of establishing multi-moda gas supply chains to other

markets like Bali, North / Central Sumatra and Sulawesi in the future

Closing Remarks

1. Indonesian gas market still continue to grow, align with government plan to develop industrial estate and increasing demand from power sector. Based on the National Energy Mix Policy, by 2025 natural gas is expected to take up to 30 part of total energy demand, twice of todays volume at 3800 Mmscfd. 2. To meet above target, extensive natural gas infrastructure development is a must. This include CNG, LNG receiving terminal, FSRU, small/medium-scale LNG logistic and land based LNG trucking. Ooprtunity for technology provider and infrastructure provider. 3. An efficient and reliable natural gas infrastructure that will serve the whole nation can only be developed through Nation Grid Infrastructure. PGN will continuously play its role as state’s owned enterp.rise to serve the nation by propagating and developing natural gas infrastructure. 4. Synergy between state’s owned enterprise is required to have integrated and solid infrastructure. A joint planning is mandatory to avoid unnecessary duplication and inefficiency. Public- Private Partnership scheme is also encouraged tpo accelerate infrastructure growth.

Thank You