“ CNG DEVELOPMENT IN INDONESIA: CHALLENGES & OPPORTUNITIES “

Robbi R. Sukardi, MBA Chairman For the Association of CNG Indonesia Companies

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CONTENTS

CNG for Natural Gas Vehicle (NGV)

CNG as a Virtual Pipeline Purpose

CNG for Power Supply Storage

CNG to Ship Natural Gas

2014 - Forward 2012 2005 1980’s

CNG DEVELOPMENTS, CHALLENGES, & OPPORTUNITIES:

CNG FOR NGV CHALLENGES

Pricing Policy Government Policy / Political Will

• Energy Mix policy & strategy • CNG mandatory vs alternative fuel • Environmental reason • Subsidy or No-Subsidy

• Availability of un-committed (un- contracted) gas source • Prioritizing allocation of gas (i.e. for

oil lifting, fertilizer, electricity, and strategic industrial)

In 2012, 30,5 mmscfd gas supply has been committed for the Transportation sector.

• New source (onshore vs. Off shore) • Economics of scale size of the well

• Indonesia as an archipelago and mountainous terrain condition • Economic of scale of the volume gas & location • Price & term conditions

•Price deviation between CNG and petrol fuel as a major factor • Sale price currency • Units sale methods • Escalation price policy • Taxes policy

• Regulation that will induce and provide benefit to the supply and demand side

• One regulatory body that specific manage, control, and monitor the NGV development

• Gas contract should be simple

• Well head gas characteristics • Pricing

• Gas Characteristics (pressure & quality) • Compression ability (fast vs. slow fill) • Location of the station • Power supply availability • Gas contract terms & pricing • On-line or Daughter system

• People are used to using petrol • People thinks that CNG is not safe • CNG Station must be widely available due to

limited gas tank size that can be carried • People are worried that CNG will damage the

vehicle engine • Massive and continuous NGV campaign is costly

• Car manufacturers warrantee • Vehicle manufacturers must be able to sell NGV at lower or at

least at the same price with petrol run vehicles

• C-kits must be wide spread available • C-kit seller and bank/leasing as well

insurance company must coordinate together

• Tax incentives

• A Emergency Response Team body should be establish

• Gas quality must be continuous monitor and report to the government

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CNG FOR NGV OPPORTUNITIES

• + 13 million automobile vehicles with 10% annual growth sale • + 83 million kilo liters annual fuel consumption • + 60 % of the annual consumption consumed subsidized fuel

CNG AS A VIRTUAL PIPELINE PURPOSE

THE VIRTUAL PIPELINE

LNG UP

STR

EAM

M

IDST

REA

M

DO

WN

STR

EAM

Shopping Mall

Apartments

Electric Generators

THE VIRTUAL PIPELINE

INTRODUCTION

GROWING

MATURE

DIMINSIHING

DO

MES

TIC

SA

LES

COAL

CNG

PIPE GAS

LPG

OIL

FUEL UNIT + KCAL/UNIT

KEROSENE Liter 8,840

DIESEL FUEL Liter 9,063

PETROL (PREMIUM) Liter 9,270

COAL ton 6,000

LPG Kg 11,200

LNG m3 10,000

NATURAL GAS (NG) m3 9,000

CNG m3 8,800

LNG

CNG FOR NGV & AS THE VIRTUAL PIPELINE

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CNG STATION AREA OF OPERATION

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THE VIRTUAL PIPELINE INDUSTRY

CNG FOR POWER SUPPLY GAS STORAGE

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CNG FOR POWER SUPPLY GAS STORAGE

Feed gas CNG feed Storage Volume Electricity Usage

CNG FOR SHIPPING NATURAL GAS

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CNG FOR SHIPPING NATURAL GAS Due to archipelago country and scattered marginal small demand within 2 to 5 MMSCFD, CNG is the most suited and efficient way to apply milk run of gas distribution in which trucking, and barge-containerized CNG can be option to transport the gas.

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CNG FOR SHIPPING NATURAL GAS

CNG Marine by Type of Vesel

Coselle (Coil in Carausel)

Votrans (Volume Optimized

Transportation & Storage

Larger Volume and Long distance**

Small Volume and Short Distance

Barge Mounted (T&B) (will using Tug Boat for

sailing)

Self Propeler Barge (SPB)

Landing Craft Transport (LCT)

** not available in the world, ship owner will build based on request and long term time charter

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CNG FOR SHIPPING NATURAL GAS

• Using Coselle or Votrans type in this time being will be facing problem due to the un available CNG Receiving terminal for discharge the cargo besides very costly in investment.

• Cabotage Law (Should be Indonesia Flag for Domestic Shipping based on Indonesia Law) • Tug & Barge , not recommended for this time being, because of Notation Class of Tug & Barge , for

Dry Bulk not for shipment CNG ISO Tank . • Tug & Barge, not allow for shipment CNG ISO tank because there is no Safety Protocol yet for

shipment Dangerous Goods with Tug & Barge. • Self Propeler Barge (SPB), will be costly, because time charter rate in the market higher than T&B

also LCT.

Current Solution:

• Using LCT is the best solution to shipment CNG ISO Tank, but the tank should be on trailler as mandatory regulation in maritime for LCT.

• No need state of the art or receiving terminal or special port, LCT can berthing as long as the port allow for open the LCT ramp door and manuveuring truck for load & un load the cargo

• Available in Indonesia and most of O&G offshore activity utilize this type of vesel, therefore fast track to mobilize.

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CNG FOR SHIPPING NATURAL GAS Small Size:

Can be shipment maximum ±7 unit of CNG ISO Tank (Tube Skid) with 40ft size include the traller

Large Size:

Can be shipment maximum ±22 unit of CNG ISO Tank (Tube Skid) with 40ft size include the trailler

Sample of Stowage Plan for ±7 CNG Container’s

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CNG FOR SHIPPING NATURAL GAS • LCT time charter rate in the Indonesia market will not linier, the rate will hyperbolic • Therefore , the suggestion of minimum volume of CNG should be in 2000 mmBtu per shipment to

get the suitable cost per mmBtu for shipping (USD 3.5 – USD 4.5 per mmBtu, depend on the nautical miles distances)

Fix-Var Shipment Cost Chart

THANK YOU Assosiasi Perusahaan CNG Indonesia

(APCNGI)

THANK YOU

website: www.apcngi.org

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APCNGI 2014 MEMBERS