“ 4th LNG Supply, Transportation & Storage Indonesia, 20 May 2014, Stone Hotel, Legian, Bali “

Tammy Meidharma

PT Nusantara Regas

Asia’s First FSRU And its Role in

Pushing LNG Development in Indonesia

Background

Operational Experiences & Challenges

Roles of NRS in Supporting Sustainable Gas Supply

For West Java

Closing Remarks

Overview

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 Nusantara Regas (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.

Disclaimer

SOURCE: Woodmac, Energyfiles, Pertamina; FACTS; BPPT; PLN; PGN; team analysis

1 Potential reserves / Current production 2 Demand shortfall as per BPHMIGAS – includes unmet latent demand 3 Sumatra demand shown indicates sales to Duri for steam flooding and excludes local fertilizer sales that are assumed to be price out by

Duri and SSWJ imports

2007, 2020 BCFD

Java

1.3

Deficit

-2.2

Local

demand

3.4

Produc- tion

1.0

Deficit

-0.2

Local

demand2

1.2

Produ ction

20201 2007

Sumatera

1.72.1

Surplus Local

demand

0.4

Produc tion

2007 2020

0.61.7

Surplus Local

demand

1.13

Produ-ction

Kalimantan

2020 2007

3.60.43.9

Surplus Local

demand

Produc tion

3.60.7

Produc tion

Local

demand

4.32

Surplus

Java shortage expected to worsen by 2020, unless new infrastructure is built to transport gas from other regions

• Expected deficit in North Sumatera

• South Sumatera to remain a gas surplus region

Domestic Gas Supply-Demand

Planned pipeline Existing pipeline

Existing FSRU Planned FSRU & Regas

LNG KTI development

FSRU Jateng & IJP

Demand 2014 2018 2025

RU IV Cilacap 75 75 75

RU VI Balongan 40 75 75

Industry 84 100 120

Total 199 250 270

FSRU NRS & IJP

Demand 2014 2018 2025

PLN M. Karang 160 160 290

PLN Tg. Priok 60 60 300

PLN M. Tawar 50 50 50

Industry 53 376 650

Total 323 646 1290

FSRU Nusantara Regas Satu (NRS) has been integrated to pipeline surrounding West Java area to fulfill gas demand for industry

Regional Gas Demand Mapping

In MMSCFD

Source: Wood Mackenzie

WEST JAVA FSRU PROJECT

April 2012 May 2012

AMDAL

BIDDING PROCESS

ORF Mech. Completion 18 Apr 2012

Final Acceptance Test and Normal Operation 13 July 12

December 2010

PERMIT

October 2010 July 2012

First STS Operation 4 May 2012

First Gas in to PLN 24 May 2012

HoA LNG SPA

HoA GSA

Award FSRU

FSRU CONVERSION

EPCIC SUBSEA PIPELINE EXECUTION

18 MONTHS

Award EPCIC

West Java FSRU Project was categorized as a Fast Track Project based on President Instruction Number 1 / 2010 concerning the Master Plan for the Acceleration and Expansion of Indonesia Economic Development (MP3EI).

FSRU Key Installation

LNGC Khannur

FSRU Nusantara Regas Satu

Regasification Unit

Loading Arm

BOG Comp.

Export Gas

System

Mooring System

FSRU CAPACITY & DESIGN

• LNG storage tank : 125.000 m3

• Regas unit : 3 MTPA ~ 400 MMSCFD Sea water open loop system (Water –> Propane –> LNG)

• LNG Offloading System : STS

• Mooring System : Mooring Dolphin

Pig Launcher Platform

Re-gasification System

8

1. The Re-gasification Plant has a 3 x 50% configuration. 2. Two Re-gasification Trains are normally running, where one is selected to be the “LEAD”

Re-gasification Train and the other selected to be the “LAG” Re-gasification Train. The third Re-gasification Train is standby.

3. Each Re-gasification Train consists of three main sub-systems: LNG/NG System Propane System Seawater System

Subsea Pipeline & ORF

9

Subsea Pipeline • Design Specification : DNV OSF101 2007 • Suitable for Intelegent Pig • Pipeline Length : approx. 15 km • Material Grade : DNV Grade 450 • Coating : 3LPE & Concrete Weight • Cathodic Protection : Galvanic Anode as

per DNV F103 • Tie in to FSRU platform

Onshore Receiving Facilities • Pig Receiver • Gas Filter 2x500 MMscfd • Gas Heater • Gas Metering and Letdown System • Tie-in to Customers

100

200

300

400

500

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Send out gas (MMSCFD) Installed capacity (MMSCFD)

available capacity for future business

FSRU Utilization Factor in 2013

Overall Plant Availability Factor in 2013 was 97.5% which was higher than the target, 97%. On the other hand, FSRU Utilization Factor in 2013 was less than 50% of installed capacity. Hence, there is a room to optimize the excess capacity.

0

20

40

60

80

100

jan feb mar apr may jun jul aug sep oct nov dec

Actual

Target

Plan

Scheduled Turn Around 8 days 21.57 hrs

Plant Availability Factor in 2013

To optimize the idle capacity, there is a room for PLN and subsidiary companies to utilize the FSRU and supporting facilities. PT Nusantara Regas could offer the business scheme either merchant or re-gasification fee basis.

0

100

200

300

400

500

600

2012* 2013 2014** 2015 2016 2017 2018

N/A

Idle Capacity

Utilized Capacity

In MMSCFD

Installed Capacity

1. FSRU Nusantara Regas Satu (NRS) was put in COD in August 2012* 2. Utilized capacity was calculated up to end of April 2014**

There is a 150 – 200 MMSCFD predicted idle capacity can be used for new electricity generations and industries starting from 2015.

Fuel substitution for PLN Muara Karang has been carrying out since July 2012. 88.1% in average of allocated LNG in 2012 - 2013 had been used for fuel substitution. A little amount of allocated LNG was introduced and used for industrial in 2012 - 2013. Projected fuel substitution will be around 98% of allocated LNG in 2014 - 2018.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2012 2013 2014 2015 2016 2017 2018

Allocated LNG

PLN / Power

Industrial

In Billion BTU (BBTU)

78.9%

97.3%

98%

0.04% 0.03%

0

100

200

300

400

500

600

700

2012 2013 2014* 2015 2016 2017 2018

Potential Saving

Actual Saving

N/A

Actual saving in term of reduction of fuel subsidy was achieved approximately in amount of USD 259 million in 2012 and USD 546 million in 2013. The potential saving will be around USD 598 million average per year in 2014 - 2018 .

In million USD

(*) Approximately actual saving as of 30 April 2014

14

A flexibility gas delivery to fulfill a sustainable gas supply could be achieved

by Swapping Operation Mode.

FSRU

PLN MuaraTawar

ORF MuaraKarang

INDUSTRY West Java

PGN Via SSWJ 2

Gas Pipe

Re-gasified LNG

The successful operation of the First Indonesia FSRU is one of the key milestones for gas infrastructure development as well as the LNG Development for transportation.

FSRU NRS is the First Hub Station for accelerating Fuel Substitution Program and maintaining Flexibility Operational of Electricity Generation Power Plant.

16

GEOGRAPHICAL POLITICAL MARKET TECHNICAL

• Widely dispersed archipelago

• No extensive gas pipeline network

• Government to increase the portion of gas for domestic use

• Government awareness on the need for using LNG to transport gas

• Government commits to reduce local pollution and CO2 emissions

• High price oil bases fuel compared with LNG

• Indonesian fuel subsidies are increasing & costly as electricity demand grows

• Need for distributed power generation

• Proven technical feasibility study

• Important infrastructure and facilities such as West Java FSRU.

There are some drivers for Gas Infrastructure Development In Indonesia which consists of Geographical, Political, Market and Technical issues.

18

Role Of LNG as A Primary Energy For National Electricity

LNG as one of the Primary Energy for National Electricity will substitute significantly the role of High Speed Diesel (HSD) and Marine Fuel Oil (MFO) beyond 2014.

Back Up Calculation

Allocated cargoes in 2014 - 2018 : 27 standard(*) BRs = 22x125,000m3x23.5MMBTU/m3 = 64,625,000 MMBTU TGs = 5x125,000m3x22.61MMBTU/m3 = 14,131,250 MMBTU Total = 78,756,250 MMBTU Projected Demand = 77,863,000 MMBTU In percentage = 98% (*) Based on re – ADP in January 2014 Allocated cargoes in 2013 : 24 standard BRs = 22x125,000m3x23.5MMBTU/m3 = 64,625,000 MMBTU TGs = 2x125,000m3x22.61MMBTU/m3 = 5,652,500 MMBTU Total = 70,277,500 MMBTU Actual send out = 68,337,000 MMBTU In percentage = 97.25% Allocated cargoes in 2012 : 14 standard BRs = 14x125,000m3x23.5MMBTU/m3 = 41,125,000 MMBTU Actual send out = 32,438,000 MMBTU In percentage = 78.88%

Back Up Calculation

Potential Saving in 2012 = 41,125,000 MMBTU x (24.10-16.11) USD/MMBTU = USD 328,588,750 Potential Saving in 2013 = 70,277,500 MMBTU x (24.10-16.11) USD/MMBTU = USD 561,517,225 Potential Saving in 2014 - 2018(*) = 0.95x78,756,000 MMBTU x (24.10 -16.11) USD/MMBTU = USD 597,797,418 (*) Based on re – ADP in January 2014

Actual Saving in 2012 = 32,438,000 MMBTU x (24.10-16.11) USD/MMBTU = USD 259,179,620 Actual Saving in 2013 = 68,337,000 MMBTU x (24.10-16.11) USD/MMBTU = USD 546,012,630

Notes: 1. Operation cost based on HSD fuel is 24.10 USD/MMBTU and re-gasified LNG is 16.11 USD/MMBTU. 2. LNG price is calculated based on crude price at 100 USD/Barrel (ICP version).

21

Operational Experiences and Technical Challenges

3.1. LNG - Send Out Gas 2012

0

1000

2000

3000

4000

5000

6000

7000

jan

feb

mar

apr

may jun jul

aug

sep

oct

no

v

dec

LNG

Send Out

N/A

in BBTU Total Received LNG: 38,337 BBTU Average Send Out Gas: 154.1 BBTUD

22

Operational Experiences and Technical Challenges

3.2. LNG - Send Out Gas 2013

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000ja

n

feb

mar

apr

may jun jul

aug

sep

oct

no

v

dec

LNG

Send Out

None

in BBTU

Total Received LNG: 70,240.7 BBTU Average Send Out Gas: 198.6 BBTUD