Premiers gas exports powering Singapores growth The story to date - - PowerPoint PPT Presentation

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Premiers gas exports powering Singapores growth The story to date - - PowerPoint PPT Presentation

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Premiers gas exports powering Singapores growth The story to date and opportunities for the future 23 June 2010 Forward looking statements This presentation may contain forward-looking statements and information that both represents

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23 June 2010 Premier’s gas exports – powering Singapore’s growth The story to date and opportunities for the future

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June 2010 | Page 1

Forward looking statements

This presentation may contain forward-looking statements and information that both represents management's current expectations or beliefs concerning future events and are subject to known and unknown risks and uncertainties. A number of factors could cause actual results, performance or events to differ materially from those expressed or implied by these forward-looking statements.

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June 2010 | Page 2

West Natuna location map

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June 2010 | Page 3

West Natuna planned production facilities

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June 2010 | Page 4

Introduction

West Natuna – Premier Position

  • We acquired an operator interest in West Natuna Block A PSC in 1996 and an

interest in the Kakap PSC in 1997 which has led to our current net 14.3% overall share of the 1999 gas contract with Sembgas “GSA1”.

  • GSA1 has been tremendously successful, frequently producing above the

Maximum Rate with a gas price linked to oil prices; we have benefitted from a four-fold increase in gas value.

  • 2008 saw our second gas sale “GSA2” with our Singapore buyers and two

additional GSAs signed with new buyers in Batam.

  • By 2012 Premier will be selling more than 50% of total West Natuna gas, 15%

net to Premier.

  • Premier’s Block A is a vitally important resource for Indonesia, annually

generating in the order of $400 million in Government revenues over the next 10 years.

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June 2010 | Page 5

Oil prices track HSFO

Our gas is in essence a Brent linked fuel

900

Brent vs HFSO (1 July 08 - 30 Sep 09)

500 400 100 200 300 600 700 800 Brent $/bbl HSFO $/mt 20 60 80 100 120 140 160 40

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June 2010 | Page 6

The West Natuna Gas group

WNG PSCs supply gas in market shares:

  • Block A (Premier) 37%; Block B (ConocoPhillips) 43%; Kakap (Star Energy) 20%.
  • Block A has strong export capacity and we have already captured > $200 million
  • f extra revenue during periods when other PSCs have been unable to supply.
  • Block A which we operate with a 28.67% interest currently produces from the

Anoa oil platform, the Anoa Gas Export (AGX) platform and the FPSO Anoa Natuna.

  • We also have an 18.75% share in the Kakap PSC.
  • Future new field developments will include Pelikan, Bison and Gajah Puteri for

GSA1 and Gajah Baru, Naga and Iguana for GSA2.

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June 2010 | Page 7

West Natuna – gas demand to date

  • Our gas supply enabled Singapore to switch from liquid fuels to more efficient

cleaner gas fired power generation; our gas is 15%* cheaper than the fuel mix used previously for electricity generation in Singapore and efficiency improved from 38% to 44%*. Gas is now 80%** of the Singapore energy market.

  • Singapore power generation is based around three main grid supplying power

stations: Tuas Power (2670 MW), Power Seraya (3100 MW) and Senoko Power (3300 MW). These were all government owned until privatisation in 2008. In addition to these three main plants the Keppel 1 (500 MW IPP) was added in 2008**.

  • In addition to the main grid suppliers Singapore also has cogen and captive
  • power. Sembcogen generates electricity (815 MW) used to make steam for the

industrial complex on Jurong Island and any surplus power is sold into the grid. ExxonMobil and Shell have significant captive power generation used within their petrochemical sites, also on Jurong.

* Singapore National Energy Policy Report ** Singapore Energy Market Authority

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June 2010 | Page 8

West Natuna – future gas demand

* Singapore Energy Market Authority

Singapore

  • Gas demand by the main generators will increase as a result of Singapore’s

economic growth (12% Q1 2010) and from population growth planned by the Government shown in the following charts.

  • New generation will come from expected new power projects such as IPPs
  • Keppel 2: up to 900 MW*
  • Island Power: up to 800 MW*
  • Captive power will increase as the petrochemical industries (notably ExxonMobil

and Shell) add new generation in Jurong in support of their new polyethylene cracker plants.

  • Cogen requirements too will increase with planned projects such as by

Sembcorp in support of industrial steam needs such as at Soxal’s new hydrogen plant and the Lanxess rubber plant.

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June 2010 | Page 9

Singapore population growth

7.00

Singapore population growth (2000 to 2020)

5.00 4.00 1.00 0.00 2000 2.00 3.00 6.00 Millions 2005 2015 2020 2010

Actual Projection

Source: SingStat

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June 2010 | Page 10

Singapore GDP growth

10.0

Singapore GDP growth (2000 to 2020)

6.0 4.0

  • 10.0

2000 2.0 8.0 Percent 2005 2015 2020 2010

Actual Lower Range Higher Range

Source: MTI and Economic Strategies Committee

0.0

  • 8.0
  • 6.0
  • 4.0
  • 2.0
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June 2010 | Page 11

Singapore power demand

80,000

Yearly electricity consumption by use

70,000 60,000

2030

Domestic Manufacturing Other industries Forecast (WoodMac)

Source: EMA and WoodMac

50,000 10,000 20,000 30,000 40,000

2025 2020 2015 2010 2005 2000 1995 1990

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June 2010 | Page 12

Singapore gas demand by sector

1800

Singapore gas demand breakdown (2000-2030)

1600 1400

2030

On-grid power Captive power Non-power (direct sales to industry) Non-power (steam sales from Cogen) Non-power (residential and commercial)

Source: WoodMac

1200 200 400 800 1000

2025 2020 2015 2010 2005 2000

600 BBtud

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June 2010 | Page 13

West Natuna – future gas demand

Indonesia domestic gas – Government policy

  • Government policy is to prioritise domestic supply where possible.
  • Very little domestic demand is within easy connection reach of our gas.
  • Domestic pricing has historically been low but has risen recently to be in the $5 to

$6/MMBtu range; domestic prices are understood to be increased in future to $12 to $13/MMBtu to match international gas pricing and attract external investment to ease domestic gas supply shortage*.

  • Accordingly Premier sees domestic gas as a further opportunity upside.

Batam

  • Existing power generation is 250 MW which is fuelled by 35 BBtud of gas and, as more

domestic and light industrial users get connected, is forecast to grow at up to 15% per year.

  • There is also 150 MW of diesel fuelled captive industrial generation but no grid connection

is yet possible as there is insufficient external generating power.

  • Two new IPPs of about 120 MW each are to be built and exclusively supplied by Premier’s

Block A gas at an initial 40 BBtud rising to 55 BBtud.

* VP Boediono quoted in JakartaGlobe, June 2010

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June 2010 | Page 14

West Natuna – other competition

* Singapore Energy Market Authority

  • LNG
  • Singapore will commission its first LNG re-gas terminal during 2013*
  • SLNG capacity will be 3 mtpa, roughly equal to 420 BBtud.
  • The main driver is to ensure energy diversification and the target market is

new commercial power generation.

  • At current pricing LNG will be significantly more expensive than Premier gas

from West Natuna.

  • Initial terminal throughput is expected to be in the order of 200 BBtud rising

to nearly 300 BBtud by 2020.

  • Coal
  • A relatively small cogen project is in development by Tuas Power (160 MW*).
  • Due to Singapore’s limited land space and environmental concerns we do

not expect coal to grow to major significance.

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June 2010 | Page 15

Singapore gas balance

1800

Singapore gas demand – supply balance (2000-2030)

1600 1400

2030

Contracted and committed – DCQ LNG – uncontracted Natuna Sea Block A – uncontracted Natuna Sea – YTF South Sumatra – uncontracted South Sumatra – YTF TOTAL Demand

Source: WoodMac

1200 200 400 800 1000

2025 2020 2015 2010 2005

600 BBtud

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June 2010 | Page 16

Development plans to meet future gas demand

  • GSA1
  • Our first field, Anoa, is a prolific producer and we continue to add to our

ultimate field reserves estimates.

  • Three new fields Pelikan, Bison and Gajah Puteri will be developed for GSA1

to maintain our share of export capability.

  • Our next field development, Pelikan, is likely to be on stream by 2013.
  • GSA2
  • We are currently developing the Gajah Baru field which is the first of three

fields dedicated to GSA2;

  • Two more fields Naga and Iguana will be developed to maintain our

contractual Maximum Rate and to be positioned to exploit any additional demand.

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June 2010 | Page 17

Natuna Block A sales gas reserves (1.5 TCF)

  • 4. Pelikan 2013
  • 7. G.Puteri 2016+
  • 1. Gajah Baru 2011
  • 5. Naga 2014
  • 6. Iguana 2016
  • 6. Bison 2016
  • 2. WL drilling 2011
  • 3. Anoa Phase 4 2012

Beruang Lembu Petang Macan Tutul Iguana Naga Gajah Baru Bison Gajah Puteri Pelikan Anoa

Plus 11mstb oil and condensate

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June 2010 | Page 18

Natuna Block A gas sales forecast

500

Natuna Block A gas sales forecast

400 350

Exploration potential Iguana Naga Gajah Baru Bison Gajah Puteri Pelikan Anoa Export capacity GSA2/3/4 GSA1

300 50 100 200 250

2006

150 BBtud

2008 2010 2012 2014 2016 2018 2020 2007 2009 2011 2013 2015 2017 2019 2021

Double production over 3 years

Today Exploration to increase production Extra available export capacity

450

Possible additional compression Potential Gajah Puteri across nearby Kakap

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June 2010 | Page 19

Natuna Block A infrastructure investment

10

Natuna Block A gas sales forecast

8 7 6 1 2 4 5

2006

3

  • No. of platforms

2008 2010 2012 2014 2016 2007 2009 2011 2013 2015 2017 2018

9 100 80 70 60 10 20 40 50 30 90 Pipelines (km) / No. of producing wells

Infrastructure Today

$1.5 billion capital investment over 8 years

  • No. of platforms
  • No. of producing wells

Extra kilometres of pipeline

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June 2010 | Page 20

Conclusion

  • In 1996 Premier forecast that Singapore gas demand would grow strongly after
  • 2001. There is now every indication of continued expansion at a steady rate –

about 6% annually according to independent analysts Wood Mackenzie, an estimate that we believe likely to be conservative.

  • Under the original gas contract, GSA1, we developed the Anoa AGX platform

and associated pipeline export system. Under our new GSA2 we have commercialised an additional 500 TBtu and we are well underway to completing the Gajah Baru infrastructure.

  • With five more fields to develop we are ideally placed to grow our gas sales into

Singapore and to meet domestic Indonesian demand through gas sales to Batam.

  • Premier’s gas sales growth will double from current levels by 2012 with further

growth after that.

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June 2010 | Page 21 www.premier-oil.com

June 2010