INDONESIA LNG:

TO SUPPORT THE

DEVELOPMENT OF POWER

AND INDUSTRY DEMAND

Sampe L. Purba

Senior VP – Executive Advisor SKKMIGAS

Presented on: The FSRU Asia Summit 2017

20 – 21 June 2017

The Role of SKK Migas as Upstream Oil &

Gas Management: playing the role of an

integrator

Healthy and competitive return on investment

Prompt and thorough approval processes

Capital value Process, start-up and execution

Investment objectives

National & Local content development and utilisation

Oil and gas delivery to meet domestic needs

Government revenues

Developmental objectives

Technically feasible

Economically

investable

Environmentally

sustainable

Good Governance

Cost efficiency

National Capacity

Building

Balancing

New Paradigm Revenue approach to economic engine growth and development (Shifting Paradigm to togenerate multiplier effect to the national economy: Pro Growth, Pro Job, Pro Environment, while enhancing the local content in project development) 2

Indonesia - Managing Gas

For Nation’s Economic Growth and Global Market

Contribution

Finding more gas

resources and how we can

transfer it to add to the

proven reserves• Maintaining exploration to find

hydrocarbon and adding more gas reserves

Developing gas supply

to meet the ever

growing demand• Gas Supply and Demand

Management

Ensuring attractiveness of

upstream gas activities• Low production cost• Fair share of revenue

There is shifting

energy from oil

dominant to gas

dominant• Maintaining the oil

production using EOR and IOR

3

The rising energy demand as consequence of rapid economic growth will make Indonesia more focus in supplying its

domestic needs. However, exports will be maintained for existing contracts as well as to support new project

developments. As domestic demand will grow in gradual manner, there is a need to implement more interruptible mid-

terms contracts to create the flexibility in domestic and export supply.

While exports are being maintained, most of additional gas supply now goes to the domestic market

Source: SKK Migas

4

4,3

97

4,4

16

4,2

02

4,0

08

3,8

20

3,7

75

3,6

81

4,3

36

4,0

78

3,6

31

3,4

02

3,2

37

3,0

90

28

49

1,4

80

1,4

66

1,5

13

2,3

41

2,5

27

2,9

13

3,3

23

3,3

79

3,2

67

3,5

50

3,7

03

3,7

85

3,8

80

39

71

-

1,000

2,000

3,000

4,000

5,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

BB

TUD

Export Domestic

Indonesia Gas Demand vs Supply

Source: Wood Mackenzie on Indonesia Energy Forum 2016 5

Cautiously to understand and read the Graph and Figures

Demand side :

- Prediction on economy growth

- Alternative available domestic source of

energy (Coal, Fuel, Gas, others renewable

energy)

- Energy supply packaging contract

- Dynamics of RUPTL (Projection for 10

years, yet revisited annually)

6

Supply Side Issues

• Economics of fields to develop

• Terms of PSC – economics limits

of reserves

• Scheduling to monetization

• Long term Commitment stability

of supply

• Under and less utilization of gas

allocated 7

Nation Strategic Target

267

MMSCFD

2,867

MW

6,754

MW

450

MW

1,091

MW

1,830

MW440

MW

423

MMSCFD

86

MMSCFD

147

MMSCFD48

MMSCFD

38

MMSCFD

35 GW Electricity Project

TOTAL GAS NEEDED:1,100 MMSCFD

TOTAL POWER:13,432 MW

Anticipate to be a LNG Importer :

With Electricity as an Anchor Buyer8Source: Ministry of Energy and Mineral Resources

Demand and Allocation of Natural Gas in Indonesia for Electricity

LNG SupplyPipeline Supply

in BBTUD

Source: Minister of Energy and Mineral Resources Decree No. 1750 Year 20179

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 PlantCapacity: 3 MTPAOn stream January 2015

Donggi Senoro LNG PlantCapacity: 2 MTPAOn stream May 2015

Source: SKK Migas

FSRU BenoaCapacity: 0.5 MTPAOn stream March 2016

10

11

With Current Capacity is Under Utilitize, we should

cautiously Review on LNG Regasification Plant

Source: Wood Mackenzie on Indonesia Energy Forum 2017Source: SKK Migas

12

Issues in Fulfilling Gas Demand in Java

Gas Demand for Industry and

Electricty mainly in Western Java

Supply

LNG

Bontang

Tangguh

Import?

Pipeline

Gas

Sumatera Supply

Western java supply

Supply from other Java region

13

Indonesia Domestic Regassification

Infrastructure to Support Demand Growth

Source: Wood Mackenzie on Indonesia Energy Forum 2017 14

`

INFRASTRUCTURES: Pipeline, Liquefaction, Regasification and Proposed

Virtual Pipeline Power Plant—Central and Eastern Indonesia (2030)

Total Investment Needed:

24.3 Billion USDSource: Mr. Naryanto Wagimin Presentation – Ministry of

Energy and Mineral Resources15

Virtual Pipeline Cluster Concept

16

Supply – Demand – Infrastructure interdependence

17

18

BLUEPRINT FOR GAS POWER PLANT DEVELOPMENT IN EASTERN PART OF INDONESIA

PLTMG Saumlaki 10 MW PLTMG Merauke 20 MW

PLTMG Dobo 10 MW

PLTMG Langgur 20 MW

MPP Papua (Jayapura) 50 MWPLTMG Jayapura Peaker 40 MW

PLTMG Timika Peaker 10 MW

PLTMG Fak-Fak 10 MW

MPP Papua Barat (Manokwari) 20 MW

PLTMG Biak 15 MW

PLTMG Serui 10 MWPLTMG Bintuni 10 MW

PLTMG Nabire 20 MW

PLTMG Seram Peaker 20 MW

PLTMG Ambon Peaker 30 MW

MPP Maluku (Ambon) 70 MW

PLTMG Namlea 10 MW

Gas Salawati

Gas Bintuni

1.524 NM144.4 MMSCFD

862 NM78.6 MMSCFD

1.494 NM15 MMSCFD

HUB

19Source: Ministry of Energy and Mineral Resources

End Remarks• In meeting growing gas demand, Increasing LNG use for domestic

consumption is unavoidable. Gas infrastructure will be the key.

• Oil and gas business activities not as an extractive industry per se but to

generate multiplier effect to the national economy: Pro Growth, Pro Job,

Pro Environment, while enhancing the local content in project

development.

• Indonesia is actively constructed FSRU to support the growth of

Domestic Demand

• Significant gas base load demand can be created, as replacement of fuel

base consumption, i.e. gas oil is still spread out. Once the base demand

and infrastructure are in place, gas consumption will proliferate, hence

creating Indonesia not only as importance LNG producers but also as

LNG consumers

• However, One should take into account the dynamics of projection of

demand as it highly correlates with economic growth and all variety of

primary energy supply Sources20

THANK YOU

20

16

© S

KK

Mig

as –

All

righ

ts r

eser

ved

22

Brief CV• Sampe L. Purba, is a Professional in oil and gas related managerial business

around 15 years. He has involved in almost all value chain of Oil and Gas keymanagerial role namely Planning department, Legal, General Support, Finance,Audit and Commercial. Currently he serves as Senior VP - Executive AdvisorSKKMIGAS

• Mr. Purba entered some Universities both domestics and abroad. He holdsundergraduate and post graduate degrees in Economics, Commerce and Law.He is 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, Indonesian Accountant Association, Indonesia Bar Association, Associateof 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 seminardomestic and abroad.

• Mr. Purba also active communicating his ideas on many strategic and currentissues, through newspapers, radio, TV, journals and book. Some of his thoughtcan be followed in http.//maspurba.wordpress.com

• slpurba@skkmigas.go.id; sampepurba@gmail.com