The Importance of Infrastructure in Expanding Gas Demand. - Nanang Untung -

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1 The Importance of Infrastructure in Expanding Gas Demand - Nanang Untung - LNG Malaysia Forum 2013 Kuala Lumpur, March 21 st, 2013

2 DISCLAIMER The presentation is made solely for the purpose of this event and is not intended to be and should not be used by any other person or entity. The contents may contain copyright and/or legally privileged information and the reader must therefore not use, copy, disclose or take any action based on this presentation material or any information herein. PT Pertamina (Persero) and its respective subsidiaries, affiliates and associated companies (or by any of their respective officers, employees or agents) will not in any manner whatsoever be deemed or construed to implicitly or explicitly represent or warrant the accuracy or completeness of the information or the contents of this presentation material. All consequences and/or liabilities (including without limitation, those arising from negligence) to other parties for the utilization of the documents are specifically disclaimed.

3 Outline 1. Introduction 2. LNG Demand 3. LNG Infrastructure Development PT Badak NGL role in LNG Infrastructure Development 4. Conclusion

4 Gas Goes Global * Includes biofuels BP Energy Outlook 2030 Gas dominating the energy mix Gas grows the fastest (2.1% p.a) while oil the slowest (0.7% p.a.) LNG grows even faster (4.5% p.a)

5 Global LNG Market Europe 78 North America Middle East 228 Pacific RIM 9 South America Africa 100 Asia Pacific Per 2025 (mmtpa) Contracted LNG Supply LNG Output Source: WoodMackenzie More > 40 countries export and import LNG Flexibility and spare capacity allows broader coverage of the market Energy company, including Pertamina is active securing potential upstream block in North America, Africa and Middle East to secure supply in meeting growing demand

6 Indonesian Economic 2012 and Potential in Outlook biggest world economic 45 million from population are consuming class 53% population in cities contribute 74% Indonesian GDP 55 million well trained worker to strengthen national economic 7 biggest world economic 135 million of population will be part of consuming class 71% population in cities contribute 86% Indonesian GDP 113 million well trained worker to strengthen national economic Sumber: McKinsey Global Institute Consequently, the Indonesian energy sector is poised for significant growth in volumes and value

7 Indonesian Supply Demand Outlook MMSCFD Actual Forecast 8.1% demand increase p.a export supply (contracted) (*) 6% demand increase p.a. 30% of Total Energy Mix Target domestic supply (contracted) proven gas reserves (un-contracted) yet-to -find gas reserves Demand growth driven by : Gas fired power generation plants Industries demand Fertilizer plants 0 (*) : Annual Average Growth Rate OUTLOOK : - Domestic gas demand increasing and reach 10.0 BSCFD in 2025 creating 4.0 BSCFD gap. - Balancing LNG exports and domestic needs - Infrastructure and pricing development is on going to achieve the energy mix target Source: Focus Group Discussion ESDM June 2011, WoodMackenzie

8 Domestic Gas Price is on the move Driven by domestic LNG price Domestic demand driven by gas-fired power plants, Industry and Fertilizer The cost of alternate fuels for power and industry is significantly higher than current gas prices

9 Outline 1. Introduction 2. LNG Demand 3. LNG Infrastructure Development PT Badak NGL role in LNG Infrastructure Development Context 4. Conclusion

10 LNG Is Integrated And Dedicated Business Chains LNG IMPORT LNG EXPORT

11 Infrastructures Development PT Badak NGL PT Arun NGL Arun LNG Receiving & Regasification Terminal Project LNG for Transportation & Households; Indonesia 1 st Mini LNG Plant LNG for Mining s Heavy Eq. Vehicle CNG for Transportation Gris sik FSRU West Java FSRU Central Java Donggi Senoro LNG Plant Small-Scale LNG Transportation and Receiving Terminal for Eastern Indonesia Location 11

12 Pertamina Proven Track Record PT Badak journey MTPA (INNOVATION ERA) 16.2 DECLINING PRODUCTION * MTPA 9.2 CHALLENGES: Found Gas Reserve Train A/B Modification LPG Plant Exp. Train A-D Debottlenecking Train E/F Debottlenecking MAINTAINING WORLD CLASS REPUTATION LNG CENTER OF EXCELLENCE BUSINESS DIVERSIFICATION MAXIMIZE REVENUES Train A/B Train C/D Train E Train F Train G Train H 2012 *) Forecast end of year

13 Pertamina Proven Track Record at Badak LNG Plant Production Capacity MPTA LNG 22.5 LPG 1.02 DOCK 3 DOCK 2 LPG TANKS Facilities Unit Process Trains 8 LNG Tanks 6 LPG Tanks 5 Boilers 21 Power Generators 15 Sea Cooling Water Pumps 22 Loading Docks 3 1 DOCK UTI-1 UTI-2 A B C D F G H E 13

14 Achievement of PT Badak NGL Co Shortest duration to complete grass root LNG project ( ) The 1st LNG plant in the world to ship more than LNG Cargoes. The 1st oil & gas company in the world that has achieved Level 8 of DNV ISRS8. 14

15 The World is Facing a Growing Shortage of Skilled Work Force AGEING WORKFORCE The industry is expecting to lose a huge percentage of its baby boomers skilled workforce. THE BIG GAP : The baby boomers vs. young generation (knowledge transfer and the experience) THE YOUNG GENERATION WORK FORCE Three years for new staff to become familiar with the industry, and about a further ten years to gain a professional discipline.

16 Conclusion In 2025, gas/lng demand gap projection in Indonesia is around 4 bscfd, and those some importance domestic demand could be satisfied by LNG, The biggest challenge for Indonesia is to ensure that the infrastructure is ready to face the likelihood of new era of importing LNG. PERTAMINA is setting up complete LNG infrastructure to anticipate, Arun regas terminal, FSRU s and small scales LNG in Eastern part of Indonesia are strategic facilities to satisfy LNG demand; current investment plan highlights also developing the necessary networks to support the whole LNG chain, PERTAMINA 30+ years comprehensive world class reputation has vital role ensuring that the infrastructure is ready and will be managed and operated safely at the highest standard of world class LNG Industry.

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18 LNG Center of Excellence OPERATION AND MAINTENANCE BADAK LEARNING CENTER CENTER OF LNG RESEARCH EXCELLENCE LNG FIRE FIGHTING EXPERTISE 18

19 PT Badak NGL Co as LNG Center of Excellence ON THE JOB TRAINING Supervisor Operator Technician Laboratory Safety Officer LNG FIRE FIGHTING TRAINING Fire Brigade Auxiliary Team OPERATION & MAINTENANCE Commissioning Start-Up Plant Shutdown EXPERTISE HAZOPS Project Management LNG RESEARCH Mini LNG LNG Vehicle Cooperation with University Pertamina Tangguh Yemen LNG TOTAL Petro China DS LNG INPEX Angola Snohvit