Gas infrastructure development in archipelagic country sampe l. purba

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  • DEVELOPING

    GAS

    INFRASTRUCTURES

    CHALLENGES IN ARCHIPELAGIC COUNTRY

    Sampe L. Purba

    SKK Migas

    Presented in EURASIAN Natural GAS INFRASTRUCTURE

    Milan, Italy, May 2017

  • Agenda

    2

    Brief Introduction

    Current Challenges

    Lesson Learned From the Past

    Way Forward

    Concluding Remarks

  • Indonesia In Brief

    3

    Located in Equator Consist of more than 13,000

    islands Size : East West = 5,100 Km

    North South = 1,800 KmThree Time Zones

    (Lisbon Moskow = 5.134 km) Population = 250 millions ++ GDP (2016) = 940.95 Billion USD

  • Upstream Oil & Gas Condition

    4

    Oil & gas still dominatenational primary energydemand

    Indonesia has become net oilimporter since 2004.

    Since 2002 gas is moredominant than oil (in terms ofBOEPD).

    Rapid natural productiondecline, high water content,and aging facilities.

    Domestic infrastructure toutilize non-export allocated gasproduction is still insufficient.

    Democratization and regionalautonomy: more stakeholdersdemanding more involvement.

    4

  • Agenda

    5

    Brief Introduction

    Current Challenges

    Lesson Learned From the Past

    Way Forward

    Concluding Remarks

  • 6

    EAST JAVAWEST

    JAVA

    SOUTH SUMATER

    A

    RIAU ISLANDS

    MASELA

    PAPUA

    ACEH

    CENTRAL SULAWESI

    NORTH SUMATER

    A EAST KALIMANTAN

    SOUTH SULAWESI

    1.23 1.30

    1.32

    11.99

    11.36

    48.28

    3.52

    2.49

    12.34 2.85

    6.57

    12.79

    8.12

    2.162.09

    0.40 0.40

    7.74

    14.52

    6.05

    Reserves (in TCF)

    Demands for 2010 - 2025 (in TCF)

    Legends :

    Worlds Reserves

    Indonesia (19%)

    Indonesia contributes 19% of total Asia Pacific gas reserves

    (source: BP Statistical Review of World Energy 2011)

    Distribution of Gas Reserves in Indonesia

    (source: Indonesian Gas Balance 2011)

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    Asia Pacifics Reserves

    8.6%

    2.12

    2.04

    0.76

    Nat

    un

    aD

    -Alp

    ha

    CENTRAL SUMATERA

    IDD

    Tan

    ggu

    h T

    rain

    3

    MA

    SELA

    Do

    ngg

    iSen

    oro

    Energy domestics demands focused in Java inhabited by 70% population, while reserves spread elsewhere. Gas infrastructures link is a requirement.

  • In addition to the existing gas infrastructures, new gas pipelines and FSRUs are being constructed and planned to support the domestic

    demand

    Planned LNG Receiving Terminal

    Existing Pipeline

    Planned Pipeline

    CNG Plant

    LNG Plant

    Existing

    Project

    Potential

    Gas Supply: Gas Demand:

    Contracted

    Commited

    Potential

    FSRU Nusantara RegasCapacity: 3 MTPAOn stream Mid of 2012

    FSRU LampungCapacity: 2 MTPAOn stream July 2014

    Arun Regasification Capacity: 3 MTPAOn stream January 2015

    Donggi Senoro LNG PlantCapacity: 2 MTPAOn stream May 2015

    Source: SKK Migas

    7

  • 8

    Main Issues inManaging Indonesia

    Gas and LNG

    Issue:- Supply source

    vs demands- Access to pipe

    line- Bundling

    Unbundling

    Issue: Credible and

    stable absorption

    Change of usage allocation

    Real demand : Supply chain Buyer trader end user

    Issue: Access to

    infrastructures Regulated

    margin, IRR , ability to pay

    LNG vs domestic gas pipe

    Issue:- Field economics price

    vs ability to pay- Gas Price to End User- Gas Price for specific

    non commercialallocation

    Issue:- Volume, delivery periods dan

    on- stream schedules- Reserves, Demand vs tenure

    of PSC- Field economics and ability

    to pay from different buyers

  • Agenda

    9

    Brief Introduction

    Current Challenges

    Lesson Learned From the Past

    Way Forward

    Concluding Remarks

  • Stranded Gas Infrastructures Exchange deal

    10

    JAMBI

    BATAMSINGAPORE

    MALAYSIA

    Minas

    RumbaiPekanbaru

    Duri

    Grissik Gas Plant(Corridor Block)

    SUMATRA

    Decision Context (pre 1997)

    Gas reserve found in South Sumatra

    CPI burnt ca 70 MBOEPD to fuel

    Steam Generators

    No nearby ready market to absorb

    the gas

    Fuel is own-use under CPI PSC

    Focus is production of crude oil

    Decision Made (1997): Exhange Duri

    Crude with Gas from Asamera

    Btu to Btu Exchange

    CPI releases the same amount of

    energy as oil

    Such oil is recognized as Fuel Own

    Use

    CPI PSC is kept no gain no loss

    Gas Reserves in South Sumatra monetized

    More oil released for export

    Corridor Block developed.

    Pipeline Gas Transportation initiated

    CPI uses environmentally clean fuel

    CPI kept whole financially

  • Gas To Oil Exchange Contract (1997 - 2021)

    11

    CPI / Rokan PSCOperation

    Corridor BlockGrissik Plant

    Gas Transportation28, 536 Km pipeline

    2 Compressors Stations

    PTEA = 250 BBtudGSEA = 185 BBtud

    39 MBopd

    Dumai

    DSF

    Steam Gen

    Power

    Generation

    PTEAOil

    PTEA = Petroleum Transfer & Exchange AgreementGSEA = Gas Supply and Exchange Agreement

    PTEALifters

    More Gas Reserves in South Sumatra monetized

    More oil released for export

    Increased Pipeline Capacity

    CPI uses environmentally clean fuel and

    eliminate fuel oil

    GSEAOil

    23 MBopd

    GSEALifters

  • WNTS Exporting Pipeline gas

    12

    First gas was delivered from the NatunaSea gas fields to Singapore via the 400-mile-long subsea West NatunaTransportation System (WNTS) as part of a22-year natural gas sales contract betweenPertamina and Singapore's SembCorp Gassigned in 1999.

    The WNTS is a joint venture betweenPertamina and three PSC's operated byConoco Indonesia, Premier Oil and GulfIndonesia Resources, respectively. Conocois operator of the WNTS

  • Agenda

    13

    Brief Introduction

    Current Challenges

    Lesson Learned From the Past

    Way Forward

    Concluding Remarks

  • Roadmap National Gas Infrastructures

    14

  • Virtual Pipeline Cluster Concept

    15

  • 16

  • Cluster III Nusa Tenggara

    17

  • ASEAN GAS INFRASTRUCTURE OVERVIEW

    18

    Source: Bureau of Energy Resources U.S. Department of States

  • Indonesia LNG Moving Towards Dynamic Market

    Traditional LNG Market:Japan, Korea, Taiwan and China Portofolio Player New Potential Market

    19

  • Agenda

    20

    Brief Introduction

    Current Challenges

    Lesson Learned From the Past

    Way Forward

    Concluding Remarks

  • Upstream PSCs

    21

  • Concluding Remarks

    22

    Indonesia as archipelagic country facing challengingconditions in developing gas infrastructures

    Supply, Demand, Commercial, Infrastructures and Regulationsdo matters and needed to be formulated comprehensivelyand thoroughfully

    Land based pipelines, Receiving Terminals, hub and clusteringsystem for virtual pipelines is one of the viable solutions

    Regional and international markets also needs to bemaintained in order to pace with the interest of Contractorsand State

  • THANK YOU

    Sampe L. Purbaslpurba@skkmigas.go.idsampepurba@gmail.com

    mailto:slpurba@skkmigas.go.id

  • Brief CV

    Sampe L. Purba, is a Professional who is and has been in oil and gas relatedmanagerial business around 15 years. He has been involved in almost all valuechain of Oil and Gas key managerial role namely Planning department, Legal,General Support, Finance, Audit and Commercial. Currently he serves as ExecutiveSenior Advisor SKKMIGAS.

    SKKMIGAS is a Government-special installed body to manage all upstream relatedactivities in Indonesia, dealing with Contractors, Government and Supporting ValueChain in the Country

    Mr. Purba entered some Universities both domestics and abroad. He holdsundergraduate and post graduate degrees in Economics, Commerce and Law. Heis also alumni of Prestigious Regular National Leadership Course in NationalResilience Institution Republic of Indonesia

    Mr. Purba registered as active member of Professional Association such asAssociation of International Petroleum Negotiators (AIPN), Indonesian PetroleumSociety (IPA), Indonesian Accountant Association (IAI), Indonesia Bar Association,Associate of Certified Fraud Examiner, Indonesia Chamber of Commerce.

    As part of maintaining and updating his knowledge and sharing of experiences, Mr.Purba actively attends and gives workshop, conferences and seminar domestic andabroad.

    Mr. Purba also active communicating his ideas on many strategic and current issues,through newspapers, radio, TV, journals and book. Some of his thought can befollowed in http.//maspurba.wordpress.com

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