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INDONESIAINDONESIAGAS/LNG DEVELOPMENT POLICYGAS/LNG DEVELOPMENT POLICY
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Outline of Presentation• The Role of Natural Gas in Indonesia
• Domestic
• Export (LNG and Pipeline)
• Indonesia Gas Reserves
• Indonesia Gas Production and Utilization
• Government Policy on Natural Gas
• The Future Market Development of Indonesia LNG
• Conclusion
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OIL
SOURCES OFENERGY FOR
DOMESTIC
THE ROLE OF GAS FOR INDONESIAN DEVELOPMENT
INDONESIAN DEVELOPMENTINDONESIAN DEVELOPMENT
SOURCES OFGOVERNMENT’S
INCOME
FEEDSTOCKTO STRATEGIC
INDUSTRIES
GAS
ENERGY SECTOR
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Gas Reserve (TSCF)P1+P2+P3
TOTAL INDONESIA = 178,1 TSCF
INDONESIA GAS RESERVESINDONESIA GAS RESERVES( STATUS JANUARY 2003 )( STATUS JANUARY 2003 )
8.8
0,73
7.5
26.6
5.95.7
54.8
44.5
19.3
ACEH
CentralSumatera
PAPUA
NATUNA
East Java
NorthSumatera
South Sumatera
EastKalimantan
West Java
4.1
SULAWESI
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INDONESIA GAS RESERVESINDONESIA GAS RESERVES(1984-2003)(1984-2003)
0
20
40
60
80
100
120
140
160
180
200 TSCF
Potential 22,43 17,4 20,1 27,6 22,7 19,55 23,75 38,9 36 46,71 45,9 51,3 58,7 61,6 83,3 65,78 66,2 75,8 86,2 86,9
Proven 48,68 66,42 68,54 69,35 74,32 71,9 67,42 76,23 64,4 67,35 68,92 72,27 77,2 76,17 77,07 92,49 80,3 92,1 90,3 91,2
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
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INDONESIA GAS PRODUCTION AND INDONESIA GAS PRODUCTION AND UTILIZATIONUTILIZATION
YEAR 2003YEAR 2003
PROD.8,42 BSCFD
PSC 7,49 BSCFD
PER
TA
MIN
A0,9
3
BS
CFD
57.6%
42,4%DOMESTIC
EXPORT
GASUT2001/14-01-2002
MMSCFD (%)
FERTILIZER 696.5 8.3
REFINERY 63.0 0.7
LPG/LEXPLANT 77.1 0.9
STATE GAS COMPANY 435.4 5.2
CEMENT 7.9 0.1
ELECTRICITY 500.2 5.9
STEEL INDUSTRY 71.5 0.8
ANOTHER INDUSTRY 273.2 3.2
OWN USE 968.8 11.5
FLARING/LOSSES 473.7 5.8
3,567.3 42.4
LNG 4516.2 53.6
LPG 15.5 0.2
GAS PIPE 321.5 3.8
TOTAL EXPORT 4853.2 57.6
8420.5
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INDONESIA INDONESIA GAS PRODUCTION AND GAS PRODUCTION AND
UTILIZATIONUTILIZATION
0
500
1000
1500
2000
2500
3000
3500 BCF
Export 826 842 854 928 1037 1108 1243 1439 1519 1555 1684 1612 1683 1857 1718 1815 1589 1524 1741 1843
Domestic 198 230 257 258 272 290 296 324 321 356 479 585 608 598 596 702 747 763 794 806
Own Use 359 378 382 396 403 430 454 516 526 541 594 658 701 520 469 381 397 383 373 358
Production 1521 1580 1630 1732 1847 1975 2159 2482 2582 2662 2942 2999 3164 3166 2979 3058 2901 2807 3036 3155
1984 1985 1986 187 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
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INDONESIA’S LNG PLANT
BontangCapacity : 21.64 mtpa(8 Trains)Start up 1977Plant to be expanded : Train I
TANGGUHGAS RESOURCESCapacity : 7 mtpaStatus:Under Construction
ARUNCapacity : 12.85 mtpa(6 Trains )Start Up 1977
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LNG INDONESIA
Train 1 2.14 MMTon/yr 1978
Train 2 2.14 MMTon/yr 1978
Train 3 2.14 MMTon/yr 1978
Train 4 2.14 MMTon/yr 1983
Train 5 2.14 MMTon/yr 1984
Train 6 2.14 MMTon/yr 1986
EXISTING FACILITIES
ARUN
Train A 2.62 MMTon/yr 1978
Train B 2.62 MMTon/yr 1978
Train C 2.62 MMTon/yr 1978
Train D 2.62 MMTon/yr 1983
Train E 2.73 MMTon/yr 1984
Train F 2.73 MMTon/yr 1986
Train G 2.74 MMTon/yr 1986
Train H 2.95 MMTon/yr 1986
BONTANG
PLANT TO BE DEVELOPED
• LNG Tangguh (2 x 3.5 MMTon/yr)
• Bontang Train I (3 MMTon/yr)
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INDONESIAN LNG EXPORT INDONESIAN LNG EXPORT
Taiwan 0,7 1,6 1,7 1,7 2,3 1,9 1,5 1,5 1,6 2,0 2,9 3,2 3,5 3,5
Korea 0,1 1,7 2,1 2,0 2,3 2,7 3,4 4,2 5,3 5,3 6,3 6,9 7,0 8,2 6,1 3,1 5,1 5,1
Japan 0,6 3,7 6,3 8,6 8,7 9,1 9,6 14,2 15,1 15,2 15,1 16,5 16,6 17,7 18,2 18,6 18,2 18,7 17,6 18,6 18,4 19,5 19,8 18,0 16,8 17,9 17,8
'77 '78 '79 '80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03
(Million Tons)
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INDONESIA LNG CONTRACTSINDONESIA LNG CONTRACTS
0
5
10
15
20
25
30
USA 0 0 0 0 0 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7
China 0 0 0 0 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6
Taiwan 3.41 3.41 3.41 3.41 3.41 3.41 3.41 1.84 1.84 1.84 1.84 1.84 1.84 1.84 1.84
Korea 5.36 5.36 6.46 6.46 6.46 4.17 4.17 4.17 4.17 4.17 4.17 3.15 2.12 2.12 2.12
Japan 18.25 17.99 15.74 15.63 15.74 15.63 15.74 14.75 3.51 2.69 2.69 0.39 0.39 0 0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Million Tonnes
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INDONESIA LNG CONTRACT
CONTRACT VOLUME (MTPA)
MARKET LNG PLANT
TERM
ARUN II 3,51 JAPAN ARUN 1/1984 – 12/2004
ARUN III 2,33 KOREA BONTANG/ARUN 1986 – 2007
KOREA II 1,95 KOREA BONTANG/ARUN 7/1994 – 6/2014
JAPAN 1981 (Ext) 3,47 JAPAN BONTANG 8/1983 – 3/2003
BADAK III 1,76 TAIWAN BONTANG 1/1990 – 12/2009
BADAK IV 2,30 JAPAN BONTANG 1/1994 – 12/2013
JAPAN 1973 (Ext) 8,34 JAPAN BONTANG 1/2000 – 12/2010
TAIWAN 1,90 TAIWAN BONTANG 1/1998 – 12/2017
BADAK V 1,05 KOREA BONTANG 1/1998 – 12/2017
MCGC 0,34 JAPAN BONTANG 3/1996 – 12/2015
TOTAL 26,96
EXISTING
NEW / EXISTING
JAPAN 1981 (Ext) 3,47 JAPAN BONTANG 4/2003 – 3/2011
ARUN (Ext) 1,00 JAPAN BONTANG 1/2005 – 12/2009
FUJIAN 2,60 CHINA TANGGUH 1/2007 – 12/2031
KOGAS 1,10 KOREA TANGGUH 1/2005 – 12/2024
SEMPRA ENERGY 3,70 US WEST COAST TANGGUH 6/2008 – 6/2028
TOTAL 11,87
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INDONESIA GAS TRANSMISSION INDONESIA GAS TRANSMISSION MAPMAP
Pacific Ocean
AUSTRALIA
Indian Ocean
Bangkok
Phnom Penh
Ban Mabtapud
Ho Chi Minh City
CAMBODIA
VIETNAM
THAILAND LAOS
KhanonSongkhla
Erawan
Bangkot
Lawit Jerneh
WESTMALAYSIA
Penang
Kerteh
Kuala Lumpur
Manila
Philipines
South
China
SeaSin
gap
or
e G
as
Tru
nkl
ine
Natuna
Alpha
Kota KinibaluBRUNEI
Bandara Seri BegawanBint
uluEASTMALAYSIA
Kuching
Banda Aceh
Lhokseumawe
Medan
Duri
Padang
S U M A T R A Jamb
i
Palembang
Bintan
SINGAPORE
Samarinda
Balikpapan
Bontang LNG Plant
& Export Terminal AttakaTunuBeka
pai
KALIMANTAN
Banjarmasin
Manado
SULAWESI
Ujung Pandang
BURU SERAM
Ternate HALMAHERA
Sorong
IRIAN JAYA
Ardjuna Fields
Jakarta
SemarangJ A V A Surab
aya
Bangkalan
MADURA
BALI SUMBAWA
Pagerungan
LOMBOK
Cirebon
FLORES
SUMBATIMOR
I N D O N E S I A
Duyong
West Natuna
Port Dickson
Port Klang
Existing Gas Pipelines
Planned Gas Pipeline
INDONESIAFUTURE REGIONAL
GAS TRANSMISSION SYSTEM
Mogpu
Dumai
TRANSMISSION PIPELINE & FLOW
1. Grissik – Duri : Ø 28” x 530 Km,
500 MMSCFD
2. West Natuna – P. Sakra : Ø 28” x 656 Km,
325 MMSCFD
3. Hangtuah (Mogpu) – Duyong : Ø 28” x 96 Km,
250 MMSCFD
4. Grissik – P. Sakra : Ø 28” x 490 Km,
350 MMSCFD
5. Pagerungan – Grissik : Ø 28” x 380 Km,
450 MMSCFDBatam
Guntong
Grissik
L-9
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GRAND STRATEGIESGRAND STRATEGIES
TO GUARANTEE THE SUSTAINABILITY OF GAS SUPPLY AND DEVELOPMENT OF ITS INFRASTRUCTURE
TO EXPAND CURRENT GAS PIPELINE TRANSMISSION AND DISTRIBUTION NETWORKS IN A SCHEDULE STEP WISE MANNER.
TO UTILIZE GAS RESERVE AT CERTAIN LOCATION OPTIMALLY, BY TAKING INTO ACCOUNT FACTOR SUCH AS THE SIZE, AVAILABILITY AND LOCATION OF THE RESERVE, GAS DEMAND, REQUIRED INFRASTRUCTURE AND TECHNICAL AND ECONOMICAL FEASIBILITY
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TO CREATE A CONDUCIVE INVESTMENT CLIMATE TO GUARANTEE THE SUSTAINABILITY OF GAS SUPPLY AND DEVELOPMENT OF ITS INFRASTRUCTURE. THIS HAS BEEN REALIZED BY MINISTER OF ENERGY AND MINERAL RESOURCES (MEMR) BY PROVIDING A MORE ATTRACTIVE FISCAL INCENTIVES;
TO EXPAND TRANSMISSION PIPELINE SYSTEM AND DISTRIBUTION OF NATURAL GAS THAT THEIR DEVELOPMENT ARE CONDUCTED GRADUALLY AND IN LINE WITH SCHEDULE
TO OPTIMIZE THE UTILIZATION OF NATURAL GAS RESERVE EXISTING IN A CERTAIN AREA BY CONSIDERING THE AVAILABILITY/RESERVES (AMOUNT AND LOCATION), DEMAND/MARKET (AMOUNT AND LOCATION), REQUIRED GAS INFRASTRUCTURE AND TECHNICAL FEASIBILITY (SPECIFICATION, DELIVERABILITY, ETC) AND ECONOMICS (INVESTMENT, ETC)
OPTIMIZING OPTIMIZING UTILIZATION OF NATURAL GASUTILIZATION OF NATURAL GAS
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GAS POLICY’S PLATFORM
FOR DOMESTIC
• TO ROLL BACK PETROLEUM FUEL SUBSIDY
• TO INCREASE ROLE OF GAS IN THE ENERGY MIX
• INCREASE ADDED VALUE OF GAS
• NEW LNG CENTRES
• TRANS ASEAN GAS PIPELINE PROJECT IMPLEMENTATION
FOR EXPORT
STRATEGIC STEPS• GAS FOR VEHICLES CNG, LPG
• GTL TECHNOLOGY (METHANOL, DME) FOR ENERGY
• GAS FOR POWER GENERATION, CITY GAS AND PETROCHEMICAL INDUSTRY
• “INCENTIVES” FOR GAS PRODUCER : INCREASE EXPLORATION AND DEVELOPMENT OF FRONTIER AREA AND MARGINAL FIELDS
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PREVIOUSLY LARGE GAS RESERVES ARE AIMED FOR EXPORT OBJECTIVE AND SMALLER GAS RESERVES ARE INTENDED FOR DOMESTIC USE. THIS PARADIGM HAS CHANGED, THE GAS RESERVES EITHER HUGE OR SMALL AMOUNT, CAN BE UTILIZED FOR DOMESTIC NEEDS DEPENDING ON ITS ECONOMICS.
GAS INFRASTRUCTURE (ALIGNED WITH THE MASTER PLAN OF THE ASEAN GAS GRID) IS DEVELOPED TO CONNECT SUPPLY POINT WITH CONSUMER POINT.
THE UTILIZATION OF NATURAL GAS IS BASED ON THE MOST ECONOMIC OPTIMIZATION OF THE NATIONAL ENERGY SUPPLY.
GOVERNMENT BASIC GOVERNMENT BASIC POLICYPOLICY
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DOMESTIC VS EXPORT ISSUEDEVELOPMENT OF LNG BUSINESS ROLE OF GAS IN INDONESIA’S ENERGY MIXSHIFTING PARADIGM FOR LARGE GAS RESERVES THE LOCATION OF GAS RESERVES FROM DEMAND CENTER (GEOGRAPHICAL ISSUE)PRICING MECHANISM AND POLICYGAS INFRASTRUCTURE INDONESIA INTEGRATED GAS PIPELINE SYSTEM TRANS ASEAN GAS PIPELINE (TAGP)
KEY ISSUESKEY ISSUES
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• In early 2000, LNG market experienced a tight competition, indicating over-supply situation, and lower price of LNG.
• The expected growing LNG demand worldwide, particularly in some countries has brought a new dynamics on LNG market.
• The potential market for LNG is huge
• For Indonesia, the world LNG market is the opportunity to diversify Indonesian LNG to a new market that provides challenging Terms and Conditions, including LNG pricing.
THE MARKET DEVELOPMENT OF THE MARKET DEVELOPMENT OF INDONESIA’S LNG INDONESIA’S LNG
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Future Indonesian LNG development will be focused on :
• Expanding Capacity in the existing LNG plants and developing new LNG Centers
• Maintaining the existing LNG supply for traditional market (Japan, South Korea, and Taiwan)
• Entering new market, US west coast and China
• Providing sufficient gas supply for domestic market
CONCLUSIONSCONCLUSIONS
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THANK YOU