DISTRIBUTIONOFLNGIN

INDONESIA
M.I Zikrullah
Vice President for Oil and Gas Utilization Management
BPMIGAS
Maximizing the value of Indonesian gas in partnership with Norway
Energy Seminar
5 October 2011, Hotel Borobudur, Jakarta

Agenda
IndonesianLNG ExistingCondition
GlobalandIndonesiaLNGMarket
FutureLNGProjectsandReceivingTerminals

2011 BPMIGAS All rights reserved

StrategyforGasAllocation
Conclusions

IndonesianLNG ExistingCondition
Arun&Bontang
Arun LNG
12.3
MTPA
Bontang LNG
22.2MTPA

Tangguh LNG
7.6MTPA

No.

Destination Country

Volume(MTPA)

1.

Japan

6.32

2.

South Korea

2.04

3.

Taiwan

1.84

@2010 BPMIGAS.Allrightsreserved

Tangguh
No.

Destination Country

Volume(MTPA)

1.

SouthKorea

1.15

2.

USA

3.7

3.

China

2.6

4.

Japan

0.36

Bontang&ArunLNG

@2010 BPMIGAS.Allrightsreserved

EnteringLNGbusinesssince1977
fromtwoLNGcentersinArun(Aceh)
andBontang(Kalimantan),
ThecapacityofBontangandArun
LNGplantsis 22.2MTPAand12.3
MTPArespectively,
Productionpeakat29MTPA by
1999, anddecliningafterward
Majormarkets:Japan,SouthKorea
andTaiwan;andsomesales
contractshavebeenexpiredsince
2007.

@2010 BPMIGAS.Allrightsreserved

TangguhLNG:3rd LNGCenter
Tangguhislocatedinthewestern
partofPapua,totalcapacityof7.6
MTPA,
Buyers:Fujian,POSCO, KPower,
JapanandSempraEnergy,
SomevolumeofSempraEnergy
contracthaspossibilityfor
diversion,
StartedProductionattheendof2009,anditisnowreaching
itscapacityproduction of 7.6 MTPA

@2010 BPMIGAS.Allrightsreserved

ImprovingGlobalLNGMarket
Postglobaleconomiccrisis,strong increaseofglobalLNG
demand :from260MTPAin2010toaround380MTPAin2015,
andafurther riseto530MTPAin2020.
SuchstrongincreasemainlytakesplaceinEuropeanandAsia
Pacificmarket,while USLNGmarketmightbestagnantdueto
thefastdevelopmentofunconventionalgas,particularlyshale
gas.
Onthesupplyside,until2015,additionalLNGcapacityfromnew
projectsmaynotbesufficient.However,cargodiversionfromUS
marketmayalleviatethetightbalanceofsupplyanddemand.
After2015,globalLNGsuppliescouldmeettheexpectedLNG
demandiftheplannedadditional LNGcapacityincrease canbe
implementedaccordingly.
6

@2010 BPMIGAS.Allrightsreserved

FurtherLNGExpansion
Development inIndonesia
Indonesia has numerous advantages to
further develop the LNG business:
Significant volume of natural gas and CBM
resources available to supply the existing
and new LNG centers
Strong domestic gas demand
Growing demand in Asia Pacific
Floating LNG Receiving Terminals In Progress
7

MASELA

MATINDOK
J

IDD

Muara Bakau

Tangguh Train 3

New LNG Projects

2010BPMIGAS Allrightsreserved

Future LNG Receiving Terminals

Arun Regasification
Belawan FSRU

West Java FSRU

2010BPMIGAS Allrightsreserved

Central Java FSRU

@2010 BPMIGAS.Allrightsreserved

EffortstoCaptureLNG
BusinessOpportunities
Substituting the declining gas supplies for the existing LNG
centers by developing new gas fields, including CBM.
South Mahakam, Deepwater Makassar Strait, Sebuku and
Muara Bakau gas fields for existing Bontang LNG Center.
DevelopingnewLNGcentres.
TangguhTrain3andMasela(FloatingLNG).
DonggiSenoro (downstream).
OptimizingtheallocationofLNGproductiontofulfilldomestic
needs

10

Overview of Domestic Gas

Demand and Supply
Domesticgasdemandwouldgrow5.1%
2.9 BCFDin2007to5.5BCFDby2020.

Drivingfactorsforsuchstronggrowth:

@2010 BPMIGAS.Allrightsreserved

oilsubsidyphasedout,electricityshortagesandcapacity
expansionforindustryandelectricityplant.

Decliningexistingsupplyrequiresfastexecutionof
newgasdevelopment project,e.g:
Ongoingproject:Terang Sirasun,Cepu,SenoroMatindok,
Abadiandothers
Newprojects:NatunaDAlpha,CBMand others.
11

12000
10000
8000

BBTUD

Existingcontractualgassupplyboth
forexportanddomesticuse will
decline.
Despitethedecline,theremightbe
additionalvolumeforgasexport
underthefollowingconditions:
Domesticdemandside
managementbyintroducingenergy
conservationandoptimizationof
primaryenergysupplies.
Strongexpansionofnaturalgas
development,includingCBM.

6000
4000
2000
0

2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

@2010 BPMIGAS.Allrightsreserved

GasBalance&Gas
SupplyScenarios

ContractedEkspor

ContractedDomestic

CommittedDomestic

ExistingSupply

ProjectSupply

PotentialSupply

12

CBMProspect&Development
Thirty nine (39) companies
have signed PSCs
CBM production target:

@2009BPMIGAS.Allrightsreserved

2011: production start

2015: 100 MMCFD
2020: 500 MMCFD
2023: 1.5 BCFD

CBM allocated for gas

pipeline & LNG production
Resources close to existing
LNG facility

13

STRATEGY FOR GAS ALLOCATION

Domestic market prioritized
primary energy supplies and feedstock for industry.
Sustainable security of supply.

@2010 BPMIGAS.Allrightsreserved

Allocation for export purposes is possible under:

Strong expansion of potential gas reserves such as: CBM,
Natuna DAlpha and others
Effective gas demand management through conservation
and optimization
The situation when there is a need to increase field
economics

14

@2010 BPMIGAS.Allrightsreserved

Conclusion
Indonesia has opportunity to expand LNG business
The gas allocation approach to encourage domestic
market satisfying economic requirement of the LNG
development project
Despite growing gas demand for domestic market,
some LNG volume could be allocated for export
Besides LNG, Indonesia has opportunity to extend
gas trade through pipelines, particularly with
neighbouring countries

15

THANKYOU

16