pertamina strategy in fulfilling domestic gas...

Pertamina Strategy In Fulfilling Domestic Gas Demand

Jakarta, 18 June 2014 The 5th International Indonesia Gas Infrastructure

Agenda

Pertamina: Gas Business Strategy 2

1 Indonesia’s Gas Balance

3

2

Pertamina: Gas Infrastructure Development

4 Conclusion and Recommendation

Domestic Gas Demand Expected to Grow at 5.1% p.a, with Power and Industry Sectors Accounting for ~70% (or ~ 6.0 bcfd) of Demand by 2025

mmscfd

1,765 1,765 1,805 2,005

890 962 1,1801,0971,448 1,530

1,5301,890

2,344 2,5553,008

244171144

113

5.1% p.a.

Power (Captive)

Power (Grid)

Fertilizers

Industry

1Refinery City Gas

2025

8,922

224~956

2020

7,782

224~760

2018

6,800

58~208

2015

5,435

491

28~79

CAGR (%)

Source: Pertamina Gas Balance 2025_V 2014

HIGH CASE DEMAND SCENARIO

1 High case demand assumes the fuel and feedstock demand from refineries and two GRR projects while the low case Refinery scenario assumes only feedstock demand from existing refineries

18.0 28.3

4.8

3.4

1.3

9.2

3

2025 20

18 2015

Deficit in Java is Expected to be ~1.7-2.1 bcfd by 2025, with Kalimantan, Papua is Expected to Remain Surplus Regions

43496151

806 445

-390 -189

mmscfd

0000

-368 -499

-123 -188

-283 -210

0

-118

0 -42 0

1,388 1,209 793

724 785 765

511 490

-254 -357

-168 -271

-138 -205

-191

Deficit region

Surplus region

Central Sumatra Central Java

Indonesia’s deficit :

Papua

East Java

Sulawesi

South Sumatra -456 -487 -1,089

-1,270

-580 -879

-646 -667

West Java

North Sumatra Kalimantan

-38-109 -211 -270

283 -253

462 -249

-926 -1,076

-786 -837

Source: Pertamina Gas Balance 2025_ v2014 4

Agenda


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Upstream Midstream Downstream PT Pertamina EP Pipe : PT Pertamina Gas PT Pertamina Trans Kontinental

PT Pertamina EP Cepu LNG : PT Arun NGL PT Pertamina Retail

PT Pertamina Drilling Services Indonesia PT Badak NGL Pertamina Energy Trading Ltd.

PT Pertamina Hulu Energi PT DSLNG PT Patra Niaga PT Pertamina Geothermal Energy Regas : PT Nusantara Regas PT Pertamina Lubricants

International LNG Access PT Perta Arun Gas PT Pertagas Niaga

PT Perta Daya Gas

Upstream, Midstream, and Downstream Integration for National Energy’s assurance

(1) Pertamina also has some non-core-business vehicles.

Operational Vehicles(1) :

Interfacing area between oil (blue area) and gas (red area) can only be run effective & efficient by Pertamina, which integrates Upstream through Downstream Sectors in Oil and Gas Business.

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Pertamina’s Concept on Gas Business (1/2)

•  Need huge investment, sufficient expertise, & coordination with relevant parties to accelerate monetization

•  Pertamina has International LNG player’s access & trust for LNG International as supply portfolio.

• Domestic gas reserves (Indonesia has 2% of world’s reserves) & International LNG portfolio.

•  Optimize of existing infrastructures, & efficiency of planned infrastructures are needed.

•  Coordination between open access pipeline & inter-island infrastructures.

Infrastructures (Trans Sumatra and Trans Java Pipelines, Regas, FRSU)

•  Availability of gas for all consumers with competitive price to reduce fuel subsidy, giving optimum multiplier effects.

•  Assures re-invests for Upstream sectors.

Potential saving of 1.5 – 2 Billion USD in Governmental Expenditures through CNG conversion program.

Upstream: Securing reserves and production (domestic & overseas)

Midstream: Availability of reliable and efficient infrastructures with sufficient capacity

Downstream: Developing conducive market (acceptable price and giving incentives for U/S dan M/S)

Example: CNG Conversion Program

Converted Public Transportation ‘000 units

Big Cities

Jakarta

121823

239

186 Surabaya

Medan Palembang Total

Investasi 1.5 - 2 Miliar USD

Pertamina’s Concept on Gas Business (2/2)

If those three sectors are integrated and coordinated, gas will become source of energy that can be accepted in market, reliable / uninterrupted, and able to accelerate upstream monetization (develop together, don’t have to wait each other).

7 Source Pertamina

Agenda



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Pertamina’s Planning on Infrastructure Projects Covering All Major Regions in Indonesia to Meet Growing Gas Demand

Source Pertamina

Pertamina Gas Directorate’s planning on key infrastructure development projects

West Java •  Cirebon – KHT Pipe •  Tegalgede - Muara Tawar Pipe •  Nusantara Regas West Java

Central Java •  Gresik - Semarang pipe •  Semarang - Cirebon Pipe

East Java •  EJGP Grati Pipe

Trans Sumatera

•  Arun LNG Receiving & Regas •  Lhoksueumawe-Medan •  Medan Dumai

East Indonesia •  LNG KTI

Other infrastructures

•  Tempino – Plaju oil pipe •  Power & Renewables

Value chain expansion

•  NGL plant Sumsel •  LPG plant Pondok Tengah •  Arun IPP

Maximize downstream

•  CNG Transport •  CNG Industry •  LNG Indominco •  LNG for transportation & marine

Sourcing & trading •  LNG Trading & sourcing

Others

•  Gas for RU IV & VI •  LPG Trading •  LPG Transhipment •  City Gas

Arun

FSRU Jateng FSRU Jabar

LNG KTI development

Trans Sumatera pipeline

Trans Java pipeline

Halmahera

Pomalaa

Makassar

Pesanggaran

Batakan

Tanjong Batu Semberah Bontang

Pipeline, Regasification, and LNG development

Planned pipelines Existing pipelines

Existing FSRU Planned FSRU

LNG KTI development

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Grissik

•  Dimension: 24” x 340 km •  Consumers:PowerPlant,Industries •  Onstream: Q3 2014

Arun – Belawan Gas Pipeline

Arun

Belawan

M. Karang Gresik

Semarang Tegalgede

Palembang

Wampu

Bontang

Pagerungan

FSRU Nusantara Regas

•  Dimension: 24” x 75 km •  Consumers: Power Plant & Industries •  Onstream: Q3 2014 (1st Phase) Q2 2015 (2nd Phase)

M. Karang – Tegalgede Gas Pipeline •  Dimension: 28” x 265 km •  Consumers: Industries, Petrochemical &

FerIlizer Plants •  Onstream: Q1 2016

Semarang – Gresik Gas Pipeline

P. Batu AAF & KKA

Cirebon

SUPPLY : •  DomesIc •  InternaIonal

INFRASTRUCTURES : •  FSRU •  Pipelines •  CNG •  LPG/NGL Plant

CONSUMERS : •  Power Plants •  F e r I l i z e r &

Petrochemical Plants •  Industries •  City Gas

Upstream Downstream Midstream

BUSINESS PROCESS

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Existing & Ongoing Gas Pipelines Infrastructure to Meet Growing Gas Demand

Source Pertamina

Agenda



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•  Indonesia retains the national energy sustainability by optimizing potential domestic sources as well as securing overseas supply supported by a complete Gas Chain Portfolio such as an integrated inter-island infrastructure through open access pipeline. Redouble efforts, including to extent possibility to procure LNG from new supplier, to lock in long term LNG contracts from global suppliers.

•  Government has to ensure the availability of reliable and efficient gas infrastructures with sufficient capacity, moreover, their support is essential to accelerate the gas infrastructures development, such as gas/LNG domestic allocation, permits and import licenses.

•  Pertamina as 100% State Owned Company has the obligation to support the Government to develop integrated infrastructure.

Pertamina’s View of The Challenges & Opportunities on Gas Infrastructure Development

Source: Pertamina 12

Thank You

pertamina strategy in fulfilling domestic gas...

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