Gas Distribution Through Pipelinein Indonesia

By Michael Baskoro - PGN

Maximizing the Value of Indonesian Gas in Partnership with NorwayHotel Borobudur, Jakarta, October 5th, 2011

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Disclaimer:The information contained in our presentation is intended solely for your personal reference. Inaddition, such information contains projections and forward-looking statements that reflect theCompanys current views with respect to future events and financial performance. These viewsare based on assumptions subject to various risk. No assurance can be given that further eventswill occur, that projections will be achieved, or that the Companys assumptions are correct.Actual results may differ materially from those projected.

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SupplyvsDemandandInfrastructuresCondition

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Indonesia:AMajorProducerofNaturalGas

ThelargestprovengasreservesinAsiaPacificAheadofAustralia,ChinaandMalaysia(BPWorldEnergyReport2010)

ThelargestprovengasreservesinAsiaPacificAheadofAustralia,ChinaandMalaysia(BPWorldEnergyReport2010)

Source: Director General of Oil and Gas

6.39

26.68

7.96

1.32

3.71

53.06

7.76

21.49

24.14

6.316.18 6.30

ExperiencedomesticnaturalgasshortagesDuetofastgrowingdemandandthelimitationofnaturalgasinfrastructure

ExperiencedomesticnaturalgasshortagesDuetofastgrowingdemandandthelimitationofnaturalgasinfrastructure

Natural Gas: Proved reserves (BP World Energy Report 2010) 2009share

Trillion cubic metres 2005 2006 2007 2008 2009 of totalIndonesia 2.48 2.63 3.00 3.18 3.18 1.7%Australia 2.35 2.34 2.29 3.08 3.08 1.6%China 1.53 1.68 2.26 2.46 2.46 1.3%Malaysia 2.48 2.48 2.38 2.38 2.38 1.3%Total Asia Pacific 13.48 13.75 14.65 16.00 16.24 8.7%

Total World 172.28 173.18 176.68 185.28 187.49 100.0%4

2093

1247

965

246131 100 79

0

500

1000

1500

2000

2500

WhattheUsersNeed:MoreGasSupplies!

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NoSubsidyofFuelfortheIndustriesSubsidiesforindustriesrevokedin2005

Pricing and EfficienciesSignificantpriceandefficienciesbenefitsbyconvertingtonaturalgas,aswellasenvironmentalconcerns

ConversionofPowerPlantsPentupdemandfromtheconversionofexistingdualfiredpowerplantspendingavailabilityofgas

DemandfromtheindustriesRequirenaturalgastocompeteintheeraofFreeTrade

IndustryDemand2011

Source:MinistryofIndustryRepublicofIndonesia&PLN

CurrentLowConsumptiontoDriveDemand

LowlevelofcurrentconsumptionofnaturalgasandelectricityEnsurethecontinuinggrowthofdemandfornaturalgas

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Energy IDR/Kwh

Oil 1,420

NaturalGas 339

Coal 366

Geothermal 542

Hydro 12

CostofElectricityProduction

Source:PLN&BisnisIndonesia(Januari2011)

7INDONESIAN GAS BALANCE 2010-2025

NaturalGasinIndonesiaDemandvsSupplyIssues

Demand for natural gas is concentrated insome industrial areas (West, Central &East Java, Banten, North Sumatera).

Demand for natural gas is growing rapidly. To this day still very dependent onpipeline gas.

Supply for natural gas is located far frommarkets and sometimes in remoteareas/deep water.

New natural gas explorations andproductions are growing slowly.

Several gas fields have been tied to longterm export contracts.

VSNew infrastructures mustbe developed: Transmission anddistribution pipeline

LNG facilities (FSRU orland base)

CNG, etc

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RecentIndonesiasInfrastructures

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Producers ShippersNaturalGas

Distribution Network

Retailer

Transmission Line

Wholesaler

PGNMediating

Other Bussines

GASDELIVERY

END CUSTOMERSIndustries IPP PLN Commercial&Household

PGNCurrentPositioninValueChain

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OurSourcesofGas

Pertamina CirebonDOHCirebon15BCF

Pertamina JBBDOHCirebon338BCF

Pertamina SumateraSelatanDOHSumsel,Merbau Field,Pagardewa,Prabumenang,Tasim,Musi Barat1006BCF

GrissikPSCGrissik CorridorBlock2581BCF

MedcoE&PIndonesiaSouth&CentralSumatraBlock14BCF

Lapindo BrantasWunut Field136BCF

KodecoWestMaduraPSC52BCF

Pertamina MedanDOHRantau44BCF

*)@1000BTU/SCF

IndonesiaPertamina TACEllipseJatirarangon Field41BCF

Maleo Field243BCF

HuskyOilBDField146BCF

KALIMANTANMedcoE&PLematangLematang Block

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PGN

IndustrialCustomers(SteelMillls,

Petrochemical,Ceramics,Textile,

Glass)

PowerSectors(PLN,IPP)

CommercialCustomers

(Hotels,ShoppingMalls,Commercial

buildings)

ResidentialCustomers

GASSUPPLY Contractedforvolumeandprices

CUSTOMERS Contractedfor

volume BusinesstobusinessPrices

Key Suppliers Under Upstream Authority / BPMigas

PGNsRole ConnectingtheProducerstotheConsumers

Represented98%ofvolume

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OurTransmissionNetwork&Facilities

Duri

KALIMANTAN

Terbanggi Besar St.Pagardewa Station

Panaran Station, Batam

Labuhan Maringgai St. Muara Bekasi Station

Grissik Receiving Station

Legend:

South Sumatera West Java Transmission Pipeline (SSWJ I & II) (1.002 km)

Grissik Duri transmission pipeline (536 km)

PLN Medan

Strategic Business Unit (SBU) I

Strategic Business Unit (SBU) II

Strategic Business Unit (SBU) III

Grissik Singapore transmission pipeline (469 km)

Pagardewa Compressor St.

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Wampu - Belawan transmission pipeline (68,6 km)

Total transmission pipeline length: 2.076 km

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Cater for 44,4% of total retail infrastructure *

* Source : MEMR Decree No. 0225/ 2010

Dist P/L: 587 km (Future LNG RT)

70%PEP/L

NORTHSUMATERA

Dist P/L: 56 km

19%PEP/L

BATAM

Dist P/L: 135 km

99,8%PEP/L

PALEMBANG

Dist P/L: 709 km

30%PEP/L

EASTJAVA

Dist P/L: 2,400 km (Future LNG RT)

50%PEP/L

WESTJAVADist P/L: 11 km

PEKANBARU

DistributionNetwork fortheRetail andHousehold Customers

Dist. P/L : Distribution PipelinePE P/L : Poly Ethylene Pipeline

Total distribution pipeline length: more than 3,750 km

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ConclusionRemarks

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The demand for natural gas in Indonesia is still increasing

rapidly. It is a promising market to be exploited.

Infrastructures development (transmission, distribution

pipelines and facilities) are in progress and will continue to

grow in order to connect producers and end customers.

PGN is committed to take the leading role in connecting gas

supply to the market.

Contact:PTPerusahaanGasNegara(Persero)TbkJl.KHZainul Arifin No.20,Jakarta11140,IndonesiaPh:62216334838Fax:62216331632http://www.pgn.co.id

Thank You

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