Premier s gas exports powering Singapore s growth The story to date and opportunities for the future

Transcription

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

2 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. June 2010 Page 1

3 West Natuna location map June 2010 Page 2

4 West Natuna planned production facilities June 2010 Page 3

5 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 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. June 2010 Page 4

6 Oil prices track HSFO Brent vs HFSO (1 July Sep 09) HSFO $/mt Our gas is in essence a Brent linked fuel Brent $/bbl June 2010 Page 5

7 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 of 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. June 2010 Page 6

8 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 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 June 2010 Page 7

9 West Natuna future gas demand 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. * Singapore Energy Market Authority June 2010 Page 8

10 Singapore population growth Singapore population growth (2000 to 2020) Actual Projection 5.00 Millions Source: SingStat June 2010 Page 9

11 Singapore GDP growth Singapore GDP growth (2000 to 2020) Percent Actual Lower Range Higher Range Source: MTI and Economic Strategies Committee June 2010 Page 10

12 Singapore power demand Yearly electricity consumption by use 80,000 70,000 60,000 Domestic Manufacturing Other industries Forecast (WoodMac) 50,000 40,000 30,000 20,000 10,000 0 Source: EMA and WoodMac June 2010 Page 11

13 Singapore gas demand by sector Singapore gas demand breakdown ( ) On-grid power Captive power Non-power (direct sales to industry) Non-power (steam sales from Cogen) Non-power (residential and commercial) 1200 BBtud Source: WoodMac June 2010 Page 12

14 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 June 2010 Page 13

15 West Natuna other competition 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 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. * Singapore Energy Market Authority June 2010 Page 14

16 Singapore gas balance Singapore gas demand supply balance ( ) Contracted and committed DCQ LNG uncontracted Natuna Sea Block A uncontracted Natuna Sea YTF South Sumatra uncontracted South Sumatra YTF TOTAL Demand BBtud Source: WoodMac June 2010 Page 15

17 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 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. June 2010 Page 16

18 Natuna Block A sales gas reserves (1.5 TCF) 5. Naga Iguana 2016 Beruang Lembu Petang Macan Tutul Iguana Naga Gajah Baru Bison Gajah Puteri Pelikan Anoa 2. WL drilling Gajah Baru Anoa Phase Bison G.Puteri Pelikan 2013 Plus 11mstb oil and condensate June 2010 Page 17

19 Natuna Block A gas sales forecast Natuna Block A gas sales forecast BBtud Exploration potential Iguana Naga Gajah Baru Bison Gajah Puteri Pelikan Anoa Export capacity GSA2/3/4 GSA1 Today Extra available export capacity Double production over 3 years Potential Gajah Puteri across nearby Kakap Possible additional compression Exploration to increase production June 2010 Page 18

20 Natuna Block A infrastructure investment Natuna Block A gas sales forecast 10 $1.5 billion capital investment over 8 years 100 No. of platforms No. of platforms No. of producing wells Extra kilometres of pipeline Infrastructure Today Pipelines (km) / No. of producing wells June 2010 Page 19

21 Conclusion In 1996 Premier forecast that Singapore gas demand would grow strongly after 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. June 2010 Page 20

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