Indonesia Gas/LNG Supply and Demand

Opening Remarks

IndoGAS 2019, Strategic Panel Discussion 1

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CONFIDENTIAL
20th February 2019 - Jakarta
 Indonesian Gas Production declined at 3%/yr since 2010
Gas exports have declined as production is diverted to domestic demand
Domestic gas demand has also softened recently: losing market to coal in power generation

Gas supply into downstream (2010-2018) Power generation mix by fuel (2010-2018)

9000 300
Coal Gas
Oil Hydro
8000 Geothermal Other Renewables
250
LNG

Power generation by fuel (TWh)

7000 Production

6000 Piped Gas 200

Exports

5000
MMscfd

Others
150
4000
Fertilizer

3000 100
Industry
2000
50
Power
1000 Generation

0 LNG 0
demand
2010 2011 2012 2013 2014 2015 2016 2017 2018 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: MEMR, Poten & Partners Source: PLN, IEA, Poten & Partners

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CONFIDENTIAL
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 Indonesia LNG imports over-contracted through to 2025
Diversion of domestic or import SPA volumes likely to be required

Exports and imports as an ‘optimization tool’ to balance the market

LNG Supply and Demand Outlook (2019-2030)

16 40%

Uncontracted LNG
14 35% production*

12 30% LNG Imports HoAs

% LNG in domestic demand

10 25%
LNG Imports SPAs
MMt/y

8 20%
LNG Domestic SPAs

6 15%

LNG Demand
4 10%

Share of LNG in
2 5%
domestic gas
LNG Exports SPA
demand (%)

0 0%
Source: Poten & Partners
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Note: * Excludes potential projects post 2025 such as Abadi LNG
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 Indonesia’s domestic gas prices are destined to rise
Driven by rising LNG imports and rising domestic production costs

Other countries have faced the same problems. Diverse strategies, involving price adjustment
and market restructuring, have been pursued
Oil, LNG and Domestic Gas Prices (2010-2018)
25

20
$/MMBtu

15

10

0
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18
Trinidad USA Nigeria Algeria
Egypt Equatorial Guinea Angola Oman
Yemen Abu Dhabi Norway Belgium
Spain France Netherlands Singapore
Korea Australia Brunei Indonesia
Malaysia Russia JCC NBP
Japan LNG JKM HH Indonesia domestic price
Source: Poten & Partners
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CONFIDENTIAL
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FEBRUARY 2019
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 NATURAL GAS & LNG CONSULTING CONTACTS:

AMERICAS (NEW YORK) AMERICAS (HOUSTON) EUROPE, M. EAST, AFRICA ASIA PACIFIC
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CONFIDENTIAL Contact: Majed Limam Contact: Doug Brown Contact: Graham Hartnell Contact: Will Pulsford
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Email: mlimam@poten.com Email: dbrown@poten.com Email: ghartnell@poten.com Email: wpulsford@poten.com
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