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 FSRU Lampung Developed FSRU NR The Growth of Infrastructure and Gas Utilisation in Indonesia Developed 5.0 9000 4.5 8000 4.0 7000 SSWJ Transmission 3.5 Developed 6000 3.0 Grissik – Batam 5000 Transmission 2.5 Developed 4000 2.0 3000 1.5 2000 1.0 1000 0.5 - 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Pipa Gas Hilir Pipa Hulu Menjadi Hilir Konsumsi Gas Domestik Ekspor Gas

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 PGN Gas Infrastructure represent more than 70% natural gas downstream Area of Operation North Sumatera and Riau infrastructure in Indonesia Island distribution network 761 km 1. Area Medan This only covers of 30% infrastructure 2. Area Batam required 3. Area Pekanbaru 4. Area Palembang Tarakan 5. Area Lampung 6. Area Cilegon Sorong 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 Western Java, Lampung, Palembang East Java distribution network 2,707 km distribution network 761 16.Area Sidoarjo km 17.Area Tarakan 18.Area Sorong

Challenges in Providing Natural Gas for Industrial Estate Market Bitung Bay Industrial Landak PaluIndustrial Estate Buli Industrial Estate Kuala Tanjung Estate Industrial Estate Industrial Estate Rattan, Rubber, Cacao Agro Industry and Smelter Ferronickel, (agro) Based Industry Rubber Industry, CPO Aluminums Industry, Logistic Stainless steel industry and Smelter CPO and its derivatives Batu Licin Industrial Estete Ketapang Industrial Bintuni Bay Industrial Estate Steel Industry Estate Alumina Industry Oil and Gas Industry and Fertilizer Sei Mangkei Industrial Estate CPO Processing Industry Morowali Industrial Tanggamus Industrial Estate Estate Smelter Ferronickel, Maritime Industry and Stainless steel industry Logistics and its derivatives Jorong Industrial Bantaeng Industrial Konawe Industrial Estate Estate Estate Downstream of Mineral Ferronickel Smelter Ferronickel Smelter Resources (Bauxite), Industry, Stainless Steel and Downstream Product Industry, Stainless Steel Palm Oil and Downstream Product Sourcer: RPJMN 2015-2019

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

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