Article in Society of Petroleum Engineers

Dharmawan Samsu:

An Executive Interview

harmawan Samsu, or Dhar in short, is everything a successful leader should

be. Claiming to be an introvert in an extroverted world, Dhar is in fact a

very warm person, always the fi rst one to greet others and throw a smile. We met him in the

middle of his very busy schedule.

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9SPE News . Oct/Nov ‘12

Dhar graduated from the Physics Department of the University of Indonesia in 1989. He made up his mind for a career in oil and gas upon his bachelor thesis on East Java basin seismic interpretation. He then started his career with ARCO as a fi eld geophysicist in Indonesia. His work on the Terang Sirasun basin mapping brought him his fi rst US assignment from 1995-1997.

He came back shortly to Indonesia, where he played a key role in the discovery and resource appraisal of the Tangguh fi eld, before returning to the US to work in the Deepwater Gulf of Mexico from 1998-2000. After the merger between ARCO and BP, Dhar was assigned to the BP North America Exploration from 2000 – 2003.

Another call from Indonesia needing its best talents back home took Dhar to a different challenge in the East and West Java assets, following which he came back to his exploration domain as Exploration Manager for BP Indonesia where he also continued the development of Tangguh fi eld. Then in late 2011, he was chosen to lead BP Indonesia as the Head of Country.

Below is our conversation with Dharmawan Samsu.

Before we talk about your career, can you tell us what made you interested in working in oil and gas in the fi rst place?

I started my career as a young geophysicist. When I graduated from the Physics Department at UI, I had already set my mind to have a career in the geoscience fi eld, and joining the oil and gas industry. There were two events that triggered that. During my sophomore and third year, I was active in professional organizations and associations. Perhaps because of that, I got invited to an Schlumberger event in 1989 that featured many successful and prominent people in the oil and gas business. Participating in that event made me proud and motivated me. Another event was when I applied for a summer vocation program with Schlumberger, and Kerja Praktek (KP) or Practical Training with Asamera. I went to fi eld and fell in love with the profession ever since.

Finishing my undergraduate degree, I chose seismic interpretation in East Java basin as my fi nal thesis. It was a struggle coming from a Physics background and then learning about geophysics and geology. However, I was lucky to have strong mentors early in my career with seasoned professionals such as Suprayitno Munadi, Roberto Fainstein, Stephen Scott, and Abdul Kohar from his early days in ARCO. The passion started there.

Now, tell us more about you career, and the milestones in the making of Dharmawan Samsu.

My fi rst assignment working in the fi eld was as a fi eld geophysicist. I had a tremendous opportunity to map the Terang Sirasun basin in East Java. This assignment helped me understand the close integration between geology and geophysics, as well as the basics of engineering and technical presentation. It was one of the high profi le projects at that time that allowed me the opportunity to present to the senior management, including to the ARCO Vice President worldwide. It was the fi rst big milestone in my geoscience career.

Following the success of that discovery, I was sent to my fi rst overseas assignment in the US ARCO headquarter to continue to study on the direct hydrocarbon indication and 3D visualization. But before I completed that assignment, I was sent back to Indonesia. The company needed a geophysicist to assist the team that recently made a big initial discovery in the Weriagar fi eld, Tangguh. It needed not only expertise from other disciplines, but also a capable Indonesian in a team of multinationals to provide balance. It was a diffi cult time as it interrupted my family’s life in US. This was the early milestone where I put my country’s needs above all else. I came back and got involved directly in the Tangguh project on Vorwata mapping. These works formed our current understanding of the Vorwata as the backbone and main fi eld of Tangguh.

From then on, my career saw greater integration between the geoscience, petroleum, and reservoir engineering and commercial fi elds. We suspected the size of

the fi eld but needed to certify it and develop it as an LNG project. We were ready to certify Vorwata with D&M and LAPI ITB, and defi ne the commerciality for an LNG business, when the economic crisis hit in 1998.

Another milestone came right after that. As the company had promised, following the completion of that stage, ARCO sent me back to an overseas assignment, as they promised. I was put in a New Venture Exploration project. This was no longer on-the-job-training, but a real job where a team performance depended on my leadership and performance. As there was no other Indonesian in the team, it was an opportunity to show what an Indonesian can bring to the company; I had to compete with local colleagues and other expats. Working with a project culture and management system that I was not familiar with, it was the shaping of my becoming a full explorationist. It was another training milestone with the main lesson being: you have to push yourself to prove to others that you have the same or higher quality and capability to contribute.

When the merger between ARCO and BP happened, BP moved me to the North America Exploration in Houston, to work on the Gulf of Mexico Deep Water Exploration project. Houston is the technology headquarters for BP. This was another change of culture for me, when BP was also still in the process of a culture change following its recent merger with Amoco. BP back then was already the melting pot as it is now. And that taught me the importance of cultural sensitivity and diversity while working and completing tasks together.

Another enlightening moment came when I worked in this project for three years. My team leader, who was about to go for an extended maternity leave, challenged me to lead the team. It became an arranged test; to allow me to see where I would fi t best while still under the mentorship of my team leader, as well as an effort to prepare me to take on bigger roles for the day I return to Indonesia. I accepted the challenge. It was not an easy six-month challenge, dealing with technical and commercial as well as personnel management, which I did not expect before. The assignment provided me the opportunity

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10 SPE News . Oct/Nov ‘12

to step up and present my decision on a more comprehensive matter to senior management in BP. Through hard teamwork and my leadership the team delivered a project recommendation that was well received by the higher management. I passed the test, and was given a Spot Recognition Award and a signed letter from my team leader stating, “You are a Leader!”

I continued my assignment by learning Project Commercial courses on leasing, sales, etc. These new skill sets were put in practice immediately in the two jobs I was next assigned to back in Indonesia; the East Java asset, and later the West Java asset. I was responsible for a team of more than 90 people in Offshore North West Java (ONWJ). This assignment provided me real training in portfolio management, leadership, commercialization, people development, and external communication and engagement. Another integration milestone in my career.

After that, BP put me back into exploration as the Exploration Manager for BP Indonesia, putting a gear forward, and resurrecting the exploration agenda for BP in Indonesia with focus on the Indo-Australia margin. We continued to expand by assessing other opportunities in the southern part of Papua and Arafura Sea. That was the beginning of us going back to exploration. Next we will also conduct exploration within the Tangguh block itself. And this proves that BP is interested in a long-term presence in Papua and Indonesia.

In 2011, because of my technical background and leadership experience, BP trusted me to take over the leadership when Pak Nico Kanter decided to leave the company. And that is the progress of my career story so far; I hope our younger readers can gain some insights from it.

You put strong emphasis on integration several times. Can you enlighten us further?

Yes, indeed. Integration is the key of success. When we talk about integration, narrow-mindedness has to be removed from our minds.

There is no successful project that results from a single discipline only. For example, we cannot make a successful geophysical interpretation if we do not understand geology. When we start drilling a well - particularly complex drilling because the low-hanging fruit in the drilling world have almost completely gone - geoscientists have to be able to advise drilling engineers the properties of the well, such as temperature, pressure prediction, etc. Later on there will come reservoir modeling, economics, and many more. A narrow mind will not get through and achieve success easily without understanding other disciplines. My assignment in West Java opened up my mind on the importance of a fully integrated approach.

It is imperative that you excel in your main discipline fi rst - you need your fi rst fi eld of knowledge and expertise to be the anchor. I call this getting the depth in your career. Integration means that you see how other people and other disciplines interact and affect your outcome. I call this embracing the breadth.

Our homework is to educate the younger generation to develop the breadth without losing focus on the depth; without leaving the main anchor and main fi ngerprint. It is very important to develop your depth fi rst and then the breadth, otherwise you will become too generalist too early in your career.

From the career progression you described, your experiences prepared you to become “a chosen one”. Can you share with us some important lessons from that long career?

I never asked for the job. If you take any positive challenge passionately and wholeheartedly, it will help you in your pursuits, whatever they may be.

It is important that once you fi nd your passion, you go deeper into that, and never feel satisfi ed too easily. The sky is the limit. I found in my early career that it is very important to fi nd someone you can consult with, or mentors. Because sometimes we do not know what we know. Hence, mentors can help enlighten many things.

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For some people, choices were made for them. Others may need to choose. There are born-leaders, and there are trained leaders. Refl ecting back on my career, initially my choices were made for me. But after that, my leadership was shaped through training. When opportunity for a responsibility comes, you have to grab it, step up to the plate and deliver. This is the school of leadership I believe I am in, where leaders are shaped by assignments, practices, coaching and feedback. This is the real training as there are people also needing your decision, coaching and feedback. You will then need to refl ect more and listen more.

You are so passionate about what you are doing. What inspires and motivates you?

Everyone must have an ideal in his or her mind, something that we look upon that gives meaning to our life. The ideal that you choose will guide you where to go and how. As I chose geoscience as my path, I worked hard to be the best geoscientist I can be, to contribute more to Indonesia. The other passion I have is sharing knowledge with and teaching the younger generations.

The meaning of life, for me, is fulfi lled when somebody, directly or indirectly, thanks me or recognizes me as a source of his or her knowledge advancement. A simple thanks from a student when I visit the campus motivates me a long way. In a greater sense, being part of solution to our energy situation in Indonesia also fulfi lls that sense of ideal. I choose BP as the path of achieving that.

Being a national in a big international fi rm is not easy, in particular when you reach a level where responsibility and accountability gets bigger. I am developing the opinion to myself that I represent Indonesia to BP and also represent the industry to bigger stakeholders in Indonesia. The balance is quite important. Then the key is to be thoughtful in making recommendations and whole heartedly provide direction to implement them. When you have done your best to maintain that balance, being honest to yourself, then you are more confi dence that you have contributed in the frame you are in. That motivates me.

You were, and have been, very active in professional organizations and associations. Does that have any value in shaping your career?

Yes, indeed. The professional organizations and associations such as student chapters, IATMI, IAGI, SPE, etc. are worth sacrifi cing and spending time for, as the returns are much greater, in particular for a geoscientist in the business world.

It does not matter how smart you are as a geoscientist, if no one buys your ideas, your work stops there. Volunteering in professional organizations and societies provide the safest way to practice leadership and develop your future network, while contributing to a greater good for the profession and the country at the same time. I refl ect on what I have become today, and the answer perhaps lies in my practice in those organizations that perhaps were refl ected in my career path.

What is your defi nition and recipe for success?

Success to me can come in two ways: when you are able to develop others, and being recognized for that; and the second is when the business I represent and stakeholders I infl uence see the mutual achievement. Maintaining, developing, and nurturing the balance is the essence of success.

What about maintaining balance for your personal needs as well? Who is Dharmawan outside of work?

Yes, I do try to maintain a life outside of work. However, when you are given bigger responsibilities and accountabilities, our personal needs will take second place. There is a greater cause out there where many people and stakeholders, such as the

government, local communities, external parties, partners, and NGOs, depend on the quality and speed of our decisions. I always put that in higher priority than my personal needs.

However, I can only do that with the support of my family. I consider myself a very lucky person to have very understanding wife and daughter. My wife fully supports the path that I chose. I have one daughter, a very independent young woman, who is studying geology now. They fully understand that my business accountabilities require me to be available 24/7. With that full support, I can then focus on the work agenda, listen to people in my team, in Papua, with extensive amount of travel. It comes back again to balance. I always make sure that whenever I have time with family, it is the best quality time.

I was asked about the sacrifi ces we need to make to achieve the best of what we can offer. My answer is that we make those sacrifi ces earlier on in our career, with full consciousness, accepting our path and striving for the best. Beyond that, you have to defi ne the balance that works for you. It is different from person to person. Responsibility takes sacrifi ce, but when chosen wisely, with all things considered, you can do it wholeheartedly.

Now let’s talk about Indonesia’s oil and gas. Your footprints are quite substantial in shaping it. What do you see in the future?

Exploration, exploration, and more exploration.

Through organizations and societies like the SPE, we are made aware of the situation of our industry. Indonesia will still be heavily dependent on the oil and gas sector in the future, as we are right now with more than one third of our State budget coming from it. There are two areas of activities in our industry. First is to maintain the base - the old fi elds from which most of our current production come - through reservoir management, enhanced oil recovery, infi ll drilling, etc. Second, we need to improve our Reserve Replacement

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Ratio by encouraging the industry to do more exploration work. We need to maintain the balance between the increase of exploration and the effectiveness of managing the base.

I do not think our industry needs more incentives. What needed is to remove the disincentives. We need more truthful dialogs, where national oil companies (NOC), international oil companies (IOC), Government, the House of Representatives, media, and local communities, agree to strengthen the support for more exploration. Working in Papua, I am a fi rm believer of the need for stronger collaboration with local stakeholders, such as local government and society. I am also learning that it requires all parties’ mutual understanding to achieve the optimal, meaningful, and sustainable synergy.

I support the view that we are changing the paradigm of moving from the west to the east of Indonesia, particularly for the gas business. In the east, most of the projects are gas, hence another paradigm shift from oil to gas. The oil era is indeed coming to an end.

Can you talk more about BP?

Our history in Indonesia is quite long and extensive, either through our heritage companies or through BP now and in the future. Our biggest agenda currently is the development of a third train at Tangguh, a big milestone for us. Total investment from BP and partners are up to US$12billion.

We have also gained some insight on what Indonesia needs when we developed the blueprint for our expansion. Based on that we voluntarily committed 40% of the gas production from Train 3 for domestic use. We will also provide the gas that will be used

for local electricity power generation in Papua Barat province. We are also continuing our social investment there.

BP’s footprint is quite large now in Papua. What is the meaning of Papua to BP?

Papua, and Indonesia as a whole, is very important for BP. When we engage local and foreign stakeholders to discuss BP and Papua, we always maintain that our intention to invest remains strong, even in the midst of the growing need for domestic gas and the discussions of fair level pricing. The fact that BP is still going ahead with the expansion plan demonstrates the importance of this project to BP.

Second, it demonstrates that Indonesia is still a good place to invest, despite outsiders’ view that Indonesia becoming more inward looking. Third, it demonstrates that Papua is still a safe place to work, both for Indonesians and foreign investors.

Papua plays an important role for our continued presence in Indonesia. We have established a stable operational base there. We have come a long way since we began our operation many years ago. We have been producing LNG since 2009, and are fi nding more reserves to be certifi ed for Train 3, and continue to pursue for more resource for future trains. We are building more businesses on top of that stability. BP is confi dent to become the partner of choice for the Government and Papua.

And what is the meaning of BP to Papua?

Let me answer that by continuing from our confi dence as the strategic partner for Papua. The confi dence comes from our integrated social programme. We have six pillars of the programme: Health, Education, Governance,

Community Relations, Livelihood, and ICBS (Integrated Community-Based Security programme). We are quite pleased with the results on all fronts. We are never complacent and always listen to stakeholders. We also have TIAP (Tangguh Independent Advisory Panel), which consists of a US Senators and a foremost Papuan leader who provide independent feedback to our programs there.

As the program continues, I believe that all the learning we have experienced from the past will be strengthened to achieve a stronger social sustainability, which is the key to operational sustainability, whereby the oil and gas activity in Tangguh works in harmony with the people living around it.

There are several excellent scorecards we can share. One of them is the reduction in the malaria prevalence rate from 24% in 2004 to 0.3% at all villages around Tangguh now. Other achievements include the signifi cant improvement in the level of graduation and participation at elementary and secondary high schools. Our livelihood program has also picked up pace. People surrounding Tangguh, which were hunter-gatherers, are now able to supply fresh produce for us to purchase. Moving forward, we are looking forward to working together with them to increase their capacity to prosper beyond Tangguh.

When Tangguh Train 3 becomes online in early 2019, we will provide gas that could generate 50 MW of electricity. We will work with Electricity Company and other stakeholders in the relevant Government ministries, as they would be responsible in developing the transmission and distribution of that electricity. In the meantime, we have found out that we would be able to secure up to 8 MW of power to be distributed by PLN, who would need to build the transmission

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and distribution to local communities. From that 8 MW, some 4 MW will be ready to PLN in January 2013. It is a big achievement by the team that is continuously listening to, and being positively challenged by the community, to do better.

How is the role of women in BP?

BP is a fully diversifi ed and inclusive organization. The equal right opportunity for all is high in our agenda. I happen to also be the sponsor for BPWIN, BP’s global network of professional women working in BP. Our industry is still a male-dominated one, but role of women is equally important.

With regional and world dynamics, many LNG producers including US, Australia, Middle East, Indonesia, will compete for the same market, namely Asia Pacifi c. How do you see the competition? How do you see the domestic market outlook in gas?

In domestic market, demand will still be growing fast, as the industrialization growth of Indonesia will remain one of the highest in

the region. The need for energy will increase, and gas will be the key part of it. A balance between export and domestic use will need to be achieved. The fair level of pricing for gas will also need to be achieved through Business-to-Business talks and support from the Government.

We all acknowledge that Indonesia is a pioneer for LNG in Asia Pacifi c. We have the biggest opportunity to maintain that role through long historical relationship, provided that we can respond quickly to market changes. Other competitive advantage of Indonesian LNG is the proximity to the target markets.

For Tangguh, the key to come ahead of the competition is by progressing timely and fl awlessly. That includes obtaining all the necessary permits and approvals to enable BP to start front-end engineering and design (FEED) in early 2013 and fi nal investment decision (FID) before the 2014 elections, to be on-stream ahead of the 2018-2019 gas commissioning timeframe. It is still very promising for Tangguh and Indonesia.

From left to right: Atria Lesmana, Bambang Istadi, Dharmawan Samsu, Mega and Hasbi Lubis

How much the competition will dictate the price, or the other way around? That depends on how big the demand in the area will grow. The second factor is how much we, BP and Indonesia, can capitalize on our current exploration boost. The fl awlessness of Tangguh expansion’s Train 3 and beyond will become critical factor.

Last question; how do you prevent yourself from getting stressed out?

I do my hobbies. Cycling is one of them. I am also active in professional organizations and societies. I encourage our young professionals to have those kinds of activities. Also, do not forget to have quality life with your family.

Always think of what you have done and achieved today, before entering the next challenges tomorrow. Do it every single day.


In the beginning, it was all about subsidy.

PLN generates electricity from various fuelsthat are sub effi cient in terms of cost and source mix. Many power plants were designed to burn gas as a cleaner alternative to fuel oil, in anticipation of abundant future domestic gas sources. But domestic gas supply in many cities has not materialized, so PLN continues to burn oil fuel. This is economic for PLN due to subsidized fuel prices, but is bad for Indonesia as a net oil importer since 2004.

Oil prices skyrocketed in 2008. This forced PLN and the Government of Indonesia to quickly act to better manage their fuel mix. Chart 1 shows that PLN plan to replace MFO and HSD with cheaper coal and gas (piped and LNG). The major projects are the Muara Karang and Tanjung Priok power plants that support the biggest loads in West Java. Chart 2 shows around 400 mmscfd (± 3mtpa) of additional gas supply is required to replace fuel oil in these two plants.

The birth of PT Nusantara Regas and the fi rst ever Asia Pacifi c LNG FSRUPLN chose LNG as available piped gas volumes were too low. A consortium agreement to build and operate an LNG receiving terminal was established on 22 April 2008, followed three days later by the signing of MOU’s for LNG utilization for the domestic market between Pertamina, PGN and PLN.

A land-based LNG receiving terminal was not

recommended, due to uncertainties in land clearance, and a longer construction period.

A sea-based Floating Storage Receiving Unit (FSRU) was selected. FSRU is proven technology that is safe, reliable, easy to setup and maintain. However, no FSRU exists in the Asia Pacifi c region. Indonesia needed to pioneer one.

On 17 May 2010, PT Nusantara Regas (PT NR), a joint venture company between Pertamina and PGN, was established to develop and run the LNG FSRU to supply PLN power plants and other industries in West Java. Picture 1 shows the location of the FSRU relative to the Muara Karang power plant.

In October 2010, the Final Investment Decision was made, followed by signing of the Sales and Purchase Agreement with Mahakam gas suppliers and the Gas Sales Agreement with PLN.

FSRU “Nusantara Regas 1” is a converted LNG Carrier from Golar Energy. It was built in 1977, has a capacity of 125,000m3of LNG, and can re-gasify 500 mmcfd (~3.8 mtpa) of gas. It is owned by an Indonesian entity, fl iesan Indonesian fl ag, can be moored onsite for 20 years, and has 40 years of hulllife. The Picture 2 shows the FSRU installation and in operation.

Given so many fi rsts, this was not an easy project to implement. It required strong leadership and clear vision. Enter Hendra Jaya, previously General Manager of JOB Pertamina – Medco Tomori, as President Director of PT NR to work withthe competent directors and staff already in place.

Ground Breaking occurred in June 2011, and Commercial Operations begun on 1 August 2012.

FSRU Nusantara Regas 1 secured 1.5 mtpa LNG from the Mahakam gas producers, supplying around 200 mmscfd to PLN Muara Karang, mostly for peak generation. Although this represents less than half of its full capacity, the FSRU project is saving $ 1.8 million per

SOURCE: PLN

National electricity will requires more LNG

Power Plant Capacity Gas Req. Gas Supply Balance

MW BBTUD BBTUD BBTUD

Muara Karang :- Existing- Repowering

908694 253 110 -180

Tanjung Priok :- Existing- Repowering

1,180743 296 10 -286

TOTAL 549 120 -466

LNG FSRU Pioneer

Nusantara Regas: Pioneering the First LNG FSRU in

Asia PacificBy: Hendra Jaya, Nusantara Regas


become a gas hub, whereby additional FSRUs as hubs will serve end users through small cargo ships and even trucks. Several gas sales MOUs have already been exercised. In addition, parent company PGN is fi nding other domestic buyers.

For Indonesia, having a variety of gas carriers and transporters, such as PT NR, PGN, Pertamina Gas, provides security and fl exibility of gas supply. However, we need further policies to develop the domestic gas market, and to ensure the players, which are fully or partially owned by Government, will not suffer adverse effects from competition.

Wisdom of the PioneerIndonesia is well known as a world leader in LNG exports, but until now it has never “exported” LNG to the domestic market at this scale. Hendra leads a team of capable persons but without experience in building LNG

receiving terminals. The team compensated for its lack of capability with hard work, speed of execution, and close supervision. The team was supervised by at least four bodies: UKP4 (Presidential task force on control of development program), Vice President’s offi ce, Ministry of State Enterprises, and Ministry of Energy and Mineral Resources. Internally, Hendra needed to manage cultural differences between parent companies Pertamina and PGN, while developing PT NR’s own identity and culture.

Given Governmental pressure and involvement, one would think that all parties would be aligned to achieve the same goal. In reality, things weredifferent. Hendra and team needed to negotiate their way out of license complexity. They identifi ed more than 100 different licenses required from various stakeholders to produce fi rst gas, andmanaged to slim this down to 40+. This is still way too many. Such hindrances should be a relic of the past bureaucracy.

Hendra identifi ed three keys to success to build and install the fi rst FSRU in the Asia-Pacifi c. Firstly, strong leadership with clear vision was crucial to keep the project on-time and on-budget. Secondly, stakeholder communication unifi ed vision and convinced all parties to remain in the spirit of the project. Thirdly, the ability to earn trust internally and to build partnerships.

Great voyage ahead for PT NR and for Indonesia domestic gas.

day in fuel subsidies.

The Future of LNG FSRUHendra delivered the fi rst FSRU in the Asia-Pacifi c region on time and without serious incident. This gives confi dence to stakeholders that Indonesia is once again leading LNG innovation.

His next focus is to grow PT NR as a profi table business.

Operation of West Java FSRU at full capacity will fulfi ll gas demand from PLN and for other industries in the Jakarta area, and reduce fuel oil subsidies.

LNG supply is the issue. PT NR currently has a single source of LNG, which will reduce to 1.25 mtpain 2013. Current LNG supply is only suffi cient to meet a part of demand from PLN Muara Karang. PT NR is working closely with SKMIGAS and PSC’s to double LNG supply by the end of 2013. PT NR, as holder of SPA’s and GSA’s, is in position to manage LNG shipments from various sources, which will reduce dependency on PSC priority and scheduling.

Fuel oil prices are forecast to stay high, so economics of LNG for power generation remain attractive. Nevertheless, the Government and PLN need to further encourage conversion from fuel oil to gas as much as, or perhaps more than, to coal. Gas infrastructure and the LNG FSRU will improve fuel mix fl exibility, and increase source sustainability from both domestic and imported LNG.

PT NR plans to grow beyond PLN and power generation. Hendra envisions PT NR to

LNG FSRU Pioneer

LOCATION: 5o 58’ 28,920” LS dan 106o 47’ 57,96” BT RADIUS : 2 KM , WATER DEPTH: 22 – 23 M

PIPING LENGTH FROM SHORE: 15 KM

FSRU LOCATION

PLN MUARA KARANG

Picture 1: FSRU Location

• Mooring system consists of 4 mooring dolphins and 4 breasting dolphins• Mooring dolphins will be equipped with 3 pad-eyes for connecting the mooring lines• Breasting dolphins are equipped with 2 pad-eyes for connecting the mooring lines and 3 fenders to absorb the impact from LNGC• The LNG carrier calling at the FSRU (side by side mooring)is taken to be maximum 157,000 m3• LNG transfer from LNG carriers via marinized LNG hard arms

LOKASI FSRT DI TELUK JAKARTA

PROJECT UPDATES FSRU Key Term & Installation


Deep Water Gas Development

Inpex’s courage to develop Indonesia’s fi rst Floating LNG (FLNG) project in the Arafura Sea in Eastern Indonesia is fuelled

by a spirit to support Indonesian energy sustainability.

The story started in 1998 when the Masela PSC was signed. In 2000, the discovery well Abadi-1 was drilled followed by 3D and six appraisal wells to confi rm reserve size. Pre-FEED extended from 2000 to 2008 and led to the FLNG development concept, complete with supporting studies and assurance a 30 year production life. Floating liquefaction technology was selected instead of a conventional land-based LNG plant as the Abadi fi eld is far from land and separated by the deep Timor Trough as seen in the map below. In December 2010, fi nal approval of the Plan of Development (PoD) was received.

The Abadi FLNG vessel will combine proven technology from FPSO, LNG carrier and LNG onshore plants, and is set to produce 2.5 mtpa (million metric tons per annum) of LNG. It will be amongst the fi rst FLNG projects worldwide, and the fi rst in Indonesia. Challenges include deep-water, high reservoir temperatures

and pressures, continuous wave movement, cyclones and limited processing space.

Masela is operated by Masela PSC, a subsidiary company of INPEX Corporation, an oil and gas company with 46 years of experience in 39 projects worldwide, including 11 projects in Indonesia. Inpex’s cumulative worldwide investment to date is USD 18.3 billion.

The illustration below shows the Stage-1 Development Concept, which targets the northern reservoir block. The map shows the sub-sea drilling centre and the offset Floating LNG vessel location. Five production wells will be drilled from a single drilling center. FEED for the SURF (Subsea Umbilical Riser and Flowline) commenced in November 2012, and the FLNG FEED will start soon.

The Floating LNG facility will consists of the topside LNG Plant, hull and other elements as depicted below. Different from land-based LNG plants, FLNG design requires studies for process and equipment marinization, to account for wave motion, marine environmental loads, corrosion resistance

Delving into the Novelty of the Masela Abadi FLNG Project Development

By: Dinar Indriana Khoiriah,

Sr. Project Communication Coordinator of INPEX Masela Ltd.

Contract Area: Masela PSC BlockEquity holder: INPEX (60%) EMP (10%) Shell(30%)Block acquired: November 16, 1998Acreage: 5,725 km2(Original) 3,221 km2(Current)Field area: More than 1,200km2 (30kmx40km)Production: LNG 2,5mtpa @ FOB Condensate 8,400 BOPDLiquefaction: APCI Dual Mix Refrigerants

Exploration Milestone2000 - Drilled Abadi-1 and discovered gas in the Plover sandstone2002 - Drilled 2 appraisal wells (Abadi- 2 and 3) and confi rmed Hydrocarbon presence of each well2007-08 - Drilled 4 appraisal wells to fi rmly confi rm the reserves size - Conducted Pre-FEED for FLNG

Drilling Center and FLNG Deployment Diagram

and protection from collisions.

Topside layout design considers safety, operability and maintainability, with a focus on risk exposures within the Living Quarters such


Deep Water Gas Development

as fl are heat radiation and explosions in the process area. The illustration below shows an example FLNG layout, where the utility area segregates the living quarters from the hazardous processing area and fl are.

Process performance may be affected by wave motion. Tall towers and columns such as absorbers, fractionators and main heat exchangers must be designed to handle this motion. LNG containment must account for sloshing in a partly-fi lled condition, the need for deck space for process plant operability, and safety and maintainability.

LNG will be offl oaded to LNG carriers with a side-by-side confi guration as shown below. The close proximity of the LNG carrier and FLNG means that LNG offl oading can only be done in benign conditions. Condensate produced with the gas will be offl oaded to condensate carriers with a tandem confi guration, as typically done with conventional FPSOs.

Masela Abadi FLNG will increase gas sustainability for domestic and overseas buyers over a long term. Key commercial arrangements currently being discussed with

the Government of Indonesia include domestic gas allocation to support Indonesia’s economic development, taking into account the balance between domestic supply and exports. LNG marketing activities are being carried out in parallel with project development.

Masela Abadi Floating LNG will be the largest and most-complex investment in Indonesian offshore oil and gas processing. Reliable operation in sometimes harsh marine conditions requires vast number of process and operational elements to be simultaneously performed with the risks associated with liquefaction plant performance and offshore operations. As fl oating liquefaction development becomes a reality, attention will move from the technical arena to economics and commercial obstacles. Many economic, commercial, fi nancial and legal considerations need to be better understood and their risks mitigated before offshore LNG production can become a widespread gas monetization solution.


Marginal Gas Development with Compact Motor-driven LNGBy: Mutsumi Horitsugi, Chief Engineer HITACHI Ltd.

In the 21st century, a number of political and environmental crises have pushed gas to the fore as a more environmentally-

friendly energy source than oil and coal. Large gas projects can absorb the cost to install long pipelines or to install a LNG plant. But how to commercialize small and isolated gas projects? Compact Motor-driven LNG is one potential solution.

Key WordsLNG, Motor Drive, Stranded Gas, Marginal Gas Field

1. BackgroundNatural gas is more environmentally-friendly than oil, and gas fi elds are distributed more widely than oil fi elds. Therefore, it is expected that natural gas usage will continue to increase. This increase is further driven by technical innovation such as high-effi ciency Combined Cycle Gas Turbines (CCGT) for power generation.

However, for natural gas to become a major energy source, we must build infrastructure to transmit and distribute the gas from the fi elds to the markets. Map 1-1 shows that

gas production in regions other than North America and Russia (where gas pipeline networks are well established) is low despite plenty of resources. This is due to a lack of infrastructure for gas transmission.

Indonesia is a good example. It has plenty of gas resources, including conventional and unconventional gas such as CBM and shale gas as shown on Map 1-2. However, infrastructure

to transport and distribute the gas is under development in some cases and simply not economic in many other cases, especially to islands in eastern Indonesia. It will take time to cover widely spread marginal gas fi elds of 70% in volume of conventional gas and distribute them to many of remote islands.

2. Ways to transmit Gas EnergyEstablished ways to transmit gas energy to markets include pipeline, LNG, CNG, Gas-To-Liquids and Gas-To-Wire. Future ways include Natural Gas Hydrates (NGH) transported by reefer.

This article will focus on LNG, which is mainly liquefi ed methane at -161.5 oC at atmospheric pressure with 1/600 volume of gaseous methane. LNG is transported by cryogenic tanker and in some places by road tankers.

The LNG business started in 1969 when Tokyo Electric Power Co. (TEPCO) and Tokyo Gas commenced LNG imports from Alaska. These companies benefi ted enormously from stable LNG prices through two oil crises in the 1970’s. Presently, LNG contributes 7.5% of total natural gas consumption, excluding domestic usage. More than 30% of LNG has been consumed in Europe and the USA. LNG can compete with piped gas due to economies of scale from large LNG plants and LNG carrier ships.

But such LNG projects are suited only to

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Map 1-1 Gas Reserves & Production Volume by Region

Map 1-2 Natural Gas Resources in Indonesia


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giant gas fi elds, which require long term gas contracts to recover the huge investment. Smaller gas fi elds have remained stranded.

One solution to commercialize sub-LNG gas fi elds has been to liquefy gas synthetically (GTL) to create methanol and/or Di-Methyl-Ether (DME) using the Fischer-Tropsch-Oil (FTO) process. The FTO process involves reforming natural gas into carbon monoxide (CO) and hydrogen (H2), and then synthesis into the fi nal product. The present conversion rate is low at about 20% which can be uneconomic.

Development of a catalyst to directly synthesize liquid hydrocarbons and/or chemicals from methane is still under development, so the indirect synthesis and reforming process will be the main process in the industry for some time.

To increase the volume of reformer, introduction

of Auto Thermal Reformer (ATR) has been studied. However, problem is the high cost of the Oxygen (O2) plant, which tends to make the project uneconomic. To avoid the costly Oxygen plant, heat resistant Ion Transport Membrane (ITM) to separate Oxygen from air is under research and development in several laboratories to produce synthetic gas (CO+H2) more economically.

Methanol has disadvantages such as

toxicity and low calorifi c value, but is useful as a raw material for chemical products. It can

also be converted into DME by dehydration which is proven technology, but the energy effi ciency of the conversion is only about 60% which creates a high production cost. DME can be used as a substitute for LPG.

GTL diesel can be blended to decrease the sulfur content of diesel from crude oil, but the present process to convert gas to diesel also has a low thermal effi ciency. The wax by-products from the GTL diesel need to be processed in a hydro-cracker which is an extra cost.

Gas-to-Wire (GTW) can be a good solution for marginal gas fi elds located not far from a power market.

3. Applicability of Compact LNGCompact LNG is a solution for smaller gas fi elds located long distances from markets as shown on Table 3-1

The cross-over–point between Conventional LNG and Compact LNG is at around 150 mmscfd, equivalent to approximately one million tons of LNG per year.

There are many kinds of LNG processes as shown on Table 3-2. Processes for large-scale LNG plants have higher effi ciency, huge cost, huge footprints and complexity.

For smaller gas developments, Single Mixed Refrigerant (SMR) is a better option than N2 Expanders because SMR has higher effi ciency and greater tolerance to changes in feed gas properties that occur when additional gas fi eld developments come online.

Table 3-1 Solutions for Gas Transmission


4. Compact Motor-driven LNG Technologies

LNG refrigerant compressors are usually driven by steam turbines and/or gas turbines. Steam turbine systems require a lot of auxiliary equipment and consume energy to generate steam, so are not suited to small-scale LNG plants. As for gas turbines, the range of small gas turbines is limited, so it is hard to fi nd suitable gas turbines for small-scale LNG plants.

Figure 4-1 shows a fl ow diagram of the SMR process, where the motor-drive system receives a power from a local power plant or the grid. Compared to turbine-driven systems, a motor-drive SMR systems offer simpler operation, smaller footprint, lower Capex and Opex, higher availability, and shorter construction schedule with maximum prefabrication and skid-mount installation. Availability of motor-drive systems is typically 5% higher than gas turbine system due to less maintenance as shown in Table 4-2.

Thermal effi ciency of motor-drive systems is higher than gas-turbine systems. This is because standards like API-617 specify that process compressors should have 10% of performance margin, and that drivers including gas turbines should have another 10% of margin. The result is gas turbines are operated under partial load which results in lower thermal effi ciency.

The end result is motor-drive SMR process will have higher total effi ciency than gas-turbine drive systems, even though SMR has a lower

liquefaction effi ciency than gas-turbine drive systems.

This is because of the independent design of the power plant without margin requirements from applicable standards.

In the case of motor-drive systems with Variable Speed Drives (VSD) using inverters, care shall be taken to avoid vibrations caused by harmonics from inverters. Simulation is the key technology to confi rm stable operation prior to the fi eld installation by controlling all the resonance points among harmonics frequencies and natural frequencies of all rotating equipment such as motors, generators and gas turbines.

Other than harmonics, technical considerations include gas property variation between gas fi elds, acid gas like H2S, and impurities like alkaline metals. Small-scale LNG plants cannot support luxurious gas treatment facilities to strip out all harmful substances. Therefore, a fi t-for-purpose gas treatment facility shall be designed for each case considering reliability of the system and conformity to applicable environmental regulations.

5. ConclusionConsidering all the above, it is expected that compact motor-drive technologies can realize competitive LNG prices by minimizing Capex for fi xed facilities like the gas treatment system. Skid-mounted facilities such as cold boxes and gas turbine generators are expandable, fl exible for variable operation and can be reused for future projects.

The feasibility of Compact LNG will be improved by well-organized asset management of such movable equipment. The prize is enormous – commercialization of stranded, marginal and geriatric gas fi elds around the world, and even associated gas from remote oil fi elds.

Figure 4-1 Typical Flow Diagram of SMR with Motor-drive System

Table 4-2 Comparison of Gas-turbine Drive VS Motor Drive

Reference1) Society for the study of gas market problem in

METI Japan http://www.meti.go.jp/policy/gas/kihonken/

houkoku/houkoku-sankoukokusai.pdf2) Mr. Hiroshi Morishima, All about Natural Gas

– Latest Knowledge for Major Energy in 21 Century, Oil & Gas Review 2004/1-3 VOL.37 No.1-2(JNOC)

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