FLNG - Offshore Assets Development , Korea 2010 Sampe Purba

CURRENT OFFSHORE GAS ASSETS, DEVELOPMENTS &

POTENTIAL for FLNG DEVELOPMENT

Sampe L. PurbaVP Program and Budgeting PSCBPMIGAS – [email protected]

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AgendaOVERVIEW OF OFFSHORE GAS RESERVES : SHALLOW, DEEPWATER AND STRANDEDGAS RESOURCE ALLOCATIONACHIEVING SYNERGIC COOPERATION AND BUSINESS PARTICIPATIONPERSPECTIVE ON FLNG TECHNOLOGY AND DEVELOPMENTConcluding remarks

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SEDIMENT BASINS SPREAD ACROSS THE COUNTRY

SOUTH CHINA SEA

SERAW

AK

BASINS WITH OIL & GAS PRODUCTION (14)

BASINS WITH DISCOVERY (7)

BASINS DRILLED (15)

BASINS NOT YET DRILLED (24)

MALAYSIA

PACIFIC OCEAN

SUM

ATRA

KALIM

ANTA

N

SULAW

ESI

IRIAN JAYA

JAWA

C

A

B

N

NATUNA

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EXPLORATION AND EXPLOITATION BLOCKS ACROSS THE COUNTRY

5.55

1.26

10.57

17.74

3.68 EAST JAVA

5.29

21.78

52.15

2.6923.71

15.22

Country’s Gas Reserve(3P) Map

Land = 68.56 TCFG

Shallow = 23.71 TCFGDeep Water = 15.22 TCFGStranded = 52.15 TCFG

Sea :

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Our Treasures

Country’s Gas Reserves

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Gas allocation shown

Lifting Oil4.99%

Own Use+HSE Flare16.82%

Pupuk7.94%

Listrik10.24%

Industri13.61%

Industri CO20.02%

Domestik (LPG)1.84%

Ekspor44.54%

Domestik55.46%

Ekspor44.54%

9

Fertilizer

7.94%

Power10.24

%Manufactu

re 13.61%

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Small and marginal field

Major field with economics reserves

Domestic marketInternational

market with higher price

Export to domestic price difference1. DMO volume to

Contractor2.Some to Govt

Entitlement

Development of small and marginal

field

National Gas Supply Management Policy model• Objective:

• to improve the economics of marginal gas development• Implementing Gas Domestic based on accessibility to the consumer’s market

Supply gas

Revenue

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Host Government Perspectives

National Resource allocation

Development

scenario and

Technology Options

Local Business Synergy

and Participati

on

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National Resource allocationDomestic vs Export• Security of domestic supply and industrial feedstock• Hunting and securing hard currency

Transforming the national industry• Increasing added value for sustainable development• Degree of Participation in LNG chain : subsurface,

extracting, liquifaction,shipping, regasification• Accelerating and stimulating supporting manufacture

Regional and National Geo Economics Strategy• Safeguarding and enhancing geographical border• Participation of National or State Owned Company in border

line fields

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Local Business Synergy, Contribution and Participation >> comprehensive growth

SWAP for captive market• Barter for domestic shipyard contract• Alliance with domestic manufacturing

company• DMO swap inter Corp

Local contents• Local logistic base• Training ground for national employees• Community Development and corporate social

responsibility

Supporting services• National Banking involvement in intermediaries and

transaction• research center• Insurance and financing

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Regulatory aspect

Allocation and commercial

aspect

•Domestic market obligation (DMO)

•Pricing and commercial aspect

•Taxation, remittance, banking

Technical and

operational aspec

t

•Reserve confirmation, drilling, processing and shipping

•Health, Security and Environment

Legal aspec

t

•Ownership and legal status of FLNG

•Schematic arrangement as downstream or upstream expansion

•Will it be categorized as storage or ship ?

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Risk from Government or HostCountry Perspectives

Mostly are ignored as too blurry to measure in exact monetarywisePressure to get ease the burden of economyLow added value in economy chainImporting dominant player to your yard

Risk as Octopussy effect, almost cul de sac and entering point of no return

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INVESTOR’S Perspective

Sanctity of Contract

and certainty of Rule of the games

Maximization of

Return of Investmen

t

Technical aspect

consideration

Enhancement and Trade off

to its Global

Portfolios

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Sanctity of Contract

Maximation of Return of Investment

Technical and commercial

Aspect

Enhancement to its global

position

Sanctity of contract vs Flexibility

Hurdle rate competition among global portfolios

• required reserves•Subsurface property characteristics

•Capitalizing and mobilizing HQ resources (e.g Technical, R &D, global supply chain)

Major changes of circumstances and Squaring mechanism

Concerned over Opex – Capex not to over run

•Size of FLNG•Hull and top side design and lay out•Liquifaction technology

•Integration line of business (FEED – Project – Upstream – downstream – support services)

Excercise inalienable rights in the name of sovereignty interest

Long term operational investment horizon

• shipping arrg’mt•Receiving terminal•Commercial deal•Financier

•Higher bargain position across its peer

INVESTOR’s Perspective

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Alignment of interest

Profit and

economics

People Welfare

Profit and

welfareTo balance the interest of parties involved

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AgendaOVERVIEW OF OFFSHORE GAS RESERVES : SHALLOW, DEEPWATER AND STRANDEDGAS RESOURCE ALLOCATIONACHIEVING SYNERGIC COOPERATION AND BUSINESS PARTICIPATIONPERSPECTIVE ON FLNG DEVELOPMENTConcluding remarks

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Development Scenario and Technology OptionsUtilizing stranded gas reserves from remote areas• On shore or pipe line transfer• FCNG • FLNGDevelopment Scenario• Full scale• Partial, sequental stages• Early Production to confirm reserve and technology

Technology issues• Proven or newly applied technology• Patent for technology

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14%

81%

5%

Capex Estimate

Sub Sea Prod SystFLNGLogistic Base

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Proje

ct m

anag

emen

t

Equip

men

t

Bulk M

ater

ials

Mod

ule F

abrica

tion

Mod

ule In

stal

l & H

ook

upHull

Tank

Moo

ring S

yste

m

Tran

spor

tation

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

13.76%15.73% 15.29%

16.92%

4.55%

21.29%

5.00%3.15%

4.32%

FLNG Project cost COMPONENT

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Concern on the FLNGLiquefaction process in open and high volatile seaViability and safety margin of loading LNG at sea (need mooring system to stabilize Plant ship/barge)Loading of LNG and LPG to transport ship carrier (vertical and lateral movement of the sea – winds, current, wave)Operational and flexibility to deal with inert gas (CO2) or corosives(SO2)

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http://www.bakerinstitute.org/programs/energy-forum/publications/docs/NewEnergyTechGasSectors_EvolutionofMarkets.pdf/view?searchterm=floating%20LNG%20technology

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This figures are indication, some of which are still under

study

The prospect indication of Floating Production System as per 2009

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Latest dev’t in FLNG Project to – be : Masela Inpex

• The first gas discovery in Arafura Sea, Indonesia

• Gas reserves est 6 – 9 TCF

• Remote location, no major gas market & infrastructure (150 Km from Tanimbar island, 500 km from Aru Island

• Water depth 400 – 800 m

• Expect to be first LNG Project in Southern East Indonesia

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When size matters

USS Blue Ridge (LCC -19)Flagship, US Seventh Fleet

Length 194 m, beam 32.9 m Length 500 m, width 82 m

FLNG , 1 x 4.5 MTPA

Football yard – as per FIFA standards :

Length 100 – 110 m, width 64 – 75 m

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Natuna : FLNG >> one- of the potential dev’t scenario

• Giant Reserves 222 TCF, high CO2 dry +/- 70%, or net reserve recoverable gas +/- 46 TCF

• to considerRemote location, no major gas market & infrastructure

• Water depth +/- 145 m• Gas Pipe line, FLNG or land

base LNG Plant open

Existing P/LP/L under constructionPotential P/L

Natuna Island

0 200

400

KM

600

Natuna D Alpha

Jakarta

West Natun

a M -I Border

Kerteh GP

P

JDA M

-T Border

Singapore

Ratchaburi

Rayong

Erawan

Bintulu

Arun

Vietnam

Cambodia

Batam

Existing P/LP/L under constructionPotential P/L

Natuna Island

0 200

400

KM

600

0 200

400

KM

600

Natuna D Alpha

Jakarta

West Natun

a M -I Border

Kerteh GP

P

JDA M

-T Border

Singapore

Ratchaburi

Rayong

Erawan

Bintulu

Arun

Vietnam

Cambodia

Batam

Distance from Natuna to Potential Markets

– Natuna Island 225 km

– National Border 520 km– Bintulu 450

km– Kerteh 790

km– Batam 880

km– Jakarta 1,340

km– Rayong 1,540

km

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Challenge for F/ LB LNG Plant

• LNG Plant Site Pipeline CoridorLiquefaction TrainsStorage TanksLoading terminal• Marine Base Jetty for berthing/offloadingStorage for drilling materialsGeneral bulk StorageLaydown / work areasAssembly of steel risersAccomodation• AirportFixed wing operationHelicopter operationCommunication centerAccomodationsMedical facilities

• Volume of Production , Plateau period and life time (need to have reasonable certainty ahead of developing scenario

• Location : Remote and almost in the middle of no where

• High CO 2 content for removing and treating

• High Capex required to develop fields, treating production and marketing of gas

• Required abundant volume of gas

• Technonolgy and Commercial Challenge

• Logistics Challenge

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FLNG sub components Concern

FEED Gas Receiving System

Capacity to separate feed gas, condensate and produced water, and temporarily materials without interruption operations

Gas Processing system Acid gas removal unit, dehydration unit, mercury removal unit, booster compressor as necessary

Liquifaction Processing system

Safety and reliability, technology risk, engineering design, operability, thermal efficiency, environmental considerations

Condensate Process system

Separate light component, control vapor pressure

Water Process System To lean, reclamate, recycle and reinjection at acceptable stdrd

Products Storage & Loading systems

Storage for LNG and condensate product and designing the efficient and safe offloading system

Hull & Mooring System Suitable to storage LNG, condensate, chemical and machinery rooms

Utility systems Power generators, fuel, steam and cooling sisytem, instruments, fire protection systems etc.

Living Quarters Control rooms, maintenance, accomodations, authority and security,recreational, heli deck ect

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Concluding remarks

More of petroleum reserves are laid in remote and deep sea

To monetize and economize it is technical and economical consideration

FLNG is one of alternatives to free and utilize stranded reserves

While such challenges can be well tacled and responded from business perspectives, the host Government measure

things far more and beyond direct economic project consideration

per se

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Achir’ul kalam

Thank youTerima kasihMaturnuwunMerdekaHorassss

[email protected]

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Brief CVMr. Sampe L. Purba, born in 1963, currently holds position as Vice President for Program and Budgeting Management of PSC in BPMIGAS, a state legal owned institution supervising and managing all Production Sharing Contracts operating in Indonesia. His job mainly deal with management assessment of program, commercial and financial aspects of oil and gas business. He also deeply involves in evaluating of Project Finance dealing with international financial institution, LNG Project Finance, Taxation and Risk management matters.

Mr. Purba got his degree in Economics more than twenty years a go from The University of North Sumatera. He also holds a State Registered Accountant, and Post graduate degree in Finance – Commerce from The University of New South Wales and also completing his Business Law degree from a leading university in Indonesia. Mr. Purba attended also short course in National Resilience Institute to equip and broad his spectrum and perspectives in managing natural resources. Currently, Mr. Purba pursues his study on post graduate in diplomacy and business negotiations

As part of maintaining and updating his knowledge and sharing of experiences, Mr. Purba actively attends and delivers workshop, conferences and seminar domestic and abroad. He is an active members of Indonesia Accountant Association, Indonesia Petroleum Society and Association of International Petroleum Negotiators.

7 Apr 2023

FLNG - Offshore Assets Development , Korea 2010 Sampe Purba

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Transcript of FLNG - Offshore Assets Development , Korea 2010 Sampe Purba