INDONESIA’S NGV INDUSTRY STATUS&

APCNGI ROLE IN THE INDUSTRYPresented by

April 2012

Presented by Robbi R. Sukardi, Secretary General APCNGI

CONTENTS :

ü APCNGI Profile

ü Indonesia’s CNG-NGV Industry Status

ü APCNGI and KANGV role to participate

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ü APCNGI and KANGV role to participate in Indonesia’s rising NGV industry

APCNGI Profile

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APCNGI PROFILE :

§ APCNGI or Asosiasi Perusahaan Compressed Natural Gas Indonesia or Indonesia’s Association of CNG Companies was established in 2009.

§ APCNGI Vision & Objective:

“APCNGI aims to serve the need and collaboration of CNG Station owners , CNG fleet operators, CNG manufacturers, CNG equipment suppliers, CNG consultants, CNG installation

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CNG equipment suppliers, CNG consultants, CNG installation & engineering, government representatives, non-governmental organizations, CNG focus groups, and other companies/institution involve and interest on the CNG industry through continuous promotion and support on the use of natural gas as a safe, environmentally friendly, and alternative fuel in Indonesia.”

APCNGI Missions:

1. Develop the CNG industry that meets a national and international safety standards.

2. To serve as a forum for members to deliver their aspirations regarding the CNG business.

3. To improve coordination among members and governments to create a fair, competitive, and good corporate governance CNG business practice.

4. To increase the professionalism standards among members on

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4. To increase the professionalism standards among members on every aspect of their CNG business.

5. As an effective communication media and promotion.6. As a partner for the government to formulate a legislation and

enforcement efforts related to the CNG Industry.7. As a formal representative for Indonesia’s CNG companies to

affiliate with international association/organization in the CNG industry.

Natural Gas Supplier

Natural Gas Pipeline

CNG On-line Station

CNG Trucking Fleets

Daughter Stations

Natural Gas Vehicles

Natural Gas Vehicles

Industrial EnergyCNG Station

Manufacturers

CNG Cylinders SuppliersCNG Consultants

& Engineers

CNG Operators

CNG Transporters

CNG Converter Kits Instalator

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Vehicles Vehicles

Focus Groups

Organizations

Scope of APCNGI Members

• 14 APCNGI CNG Mother Station **• 3 APCNGI Conversion Workshop

APCNGI members consists of :

• 22 Established CNG Mother Stations• 5 Plan Development CNG Mother Stations• + 300 units CNG Skids module• + 60 MMSCFD CNG Production Supply• 5 CNG Manufacturers & Equipment Supply• 4 CNG Converter Kits Instalator• 2 CNG Consultant

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• 1 APCNGI CNG Mother Station• 1 APCNGI Conversion Workshop• 1 ESDM CNG Mother Station• 2 ESDM CNG Daughter Stations *

• 3 APCNGI Conversion Workshop • 7 APCNGI Transporters • 2 ESDM CNG Mother Station *

• 12 APCNGI CNG Mother Station ***• 5 APCNGI Conversion Workshop.• 5 APCNGI CNG Transporters.• 10 Pertamina CNG Station• 1 Pertamina Mother Station *• 4 Pertamina Daughter Stations *

APCNGI ACTIVITIES :

Collaboration with ANGVA Yearly SeminarDiscussion Forum with Indonesia’s Legislative Senator

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Seminar & TrainingCNG Equipments & Supply Trade Shows

APCNGI ACTIVITIES :

Site Visit Trips to APCNGI members CNG StationsCNG Bus Transjakarta Road Trip

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Press Conference CNG Delivery Support to DKI Transjakarta Bus

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Indonesia’s CNG-NGV Industry Status

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Master Planning

Pilot Programme

Commercialization

Market Development

WHERE INDONESIA IN THE DEVELOPMENT STAGES

1986 -1987

1988 -1989

1990 - 1992

1989 - 1992

2006

2007

2012

2012

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Regulatory Enactment

Public Awareness

NGV Developed

Mature Market

2005 -2007

2006-2007

2011

2011

SUCCES FACTORS

1. Availability of abundant natural gas reserves

2. Infrastructure

3. Pricing Policy

+

CHALLENGES

+ + +

+ + + +

What are Indonesia’s NGV Success Factor & Challenges?

4. Availability of funds

5. Market Awareness & Acceptance

6. Industry & Regulator Body Support

+ +

+ + + +

+ +

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Availability of abundant natural gas reserves ü AVAILABLE

ü Indonesia has the largest supply of natural gas among its South East Asia neighbor countries

Energy fuel Total Reserve Proven2004

ProductionYear

Dimished

Oil

Coal

Source: BP Migas and Indonesia Petroleum Report 2005-2006 and Department Mines & Energy Indonesia Energy Blue Print Report & 2009 Data Report

East Asia neighbor countries

ü In 2006 gas production was recorded at 8,280 MMSCFD.

ü In 2007, gas production increase to 8,901 MMSCFD of which 37% for domestic and 63% for export.

ü In 2009 is estimated that over 10,000 MMSCFD will be produce.

Infrastructure üInfrastructure û NOT ENOUGH & NOT WIDELY SPREAD

BLUEPRINT PENGELOLAAN ENERGI NASIONAL 2005 – 2025 Dept. ESDM

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EXPLORATION & PRODUCTION(NATURAL GAS PRODUCER)

ECONOMIC / PRICE FACTORS POLICY HOLDER

§ Country’s natural gas availability§ World’s natural gas price § Market demand size

§ Onshore vs. Off shore§ Economics of scale size of the well§ Natural gas composition § Capacity & size of refinery facility§ Tender process priced obtain

NATURAL GAS AT WELL(INDONESIAN GOVERNMENT)

§ Parliament/Legislator Approval§ Central Government (President)§ Local Government

§ Department of Mines & Energy § BP Hulu (Upstream) Migas§ Company’s Shareholder & BOD

Pricing Policy û MUST BE ECONOMICALLY MARKET DRIVEN

TRANSPORT(PIPELINE OWNER)

COMPRESSION(STATION OWNER)

§ Economics of scale size transported§ Distance to targeted area § Difficultness to transport area § Tender/contract price obtain

§ Volume of pressure obtain§ Compression ability (fast vs. slow fill)§ Location of the station§ Power supply availability§ Gas composition§ Supply gas purchase

§ Department of Mine & Energy § BP Hilir (Downstream) Migas§ Company’s shareholder & BOD

§ Company’s shareholder & BOD

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AVAILABILITY OF FUNDS ü WITH CONDITIONS

ü Macro Economy & Political Stability Factor:

• World’s financial crisis occurred in 2007-2008 had not affect much of the country’s economy.

• Past 2 years, the Indonesia’ federal reserve bank (Bank Indonesia) has continued to lower its treasury interest rate (SBI).

• Local banks are currently liquid.

EQUIPMENT INVESTMENT

LAND & CIVIL DEVELOPMENT

ü Volume Pressure Obtain è compressing stages

ü Compression ability è fast or slow fill / # of dispenser

ü Availability of power supply è gas or electric driven

ü Gas composition è with or without gas dryer

ü Location è Owned or Rent

ü Land Size è large vehicles or small vehicles

ü Certification Approval - Migas or Depnaker

ROI factors to be considered …

AVAILABILITY OF CAPITAL üavailable

• Local banks are currently liquid.

• Rupiah currency has indicate stable and strong positioning this past weeks.

• Presidential election proceeded swiftly and safely with minor disruption.

ü Industry and Market Demand Factor:

• CNG Filling Station and the NGV market still has a lot of potential growth market

• Government regulation to support and to promote the use of NGV exist.

• Gas supply from PGN is available.

o Return on Investment Factor:

ü Certification Approval - Migas or Depnaker

ü Local Government Approval CERTIFICATION & APPROVAL

GAS SUPPLYü PGN or Pertamina or other

ü Contract terms è Rupiah or USD base

OPEATIONAL COST

PROFIT MARGIN

ü Power supply è electric or gas bill

ü Cost of money è high or low leverage

ü Return on Investment è IRR and Payback period

ü Taxes

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MARKET AWARESS & ACCEPTANCE

ü Indonesian society are becoming more concern for a cleaner and friendly environment as well are more aware of global warming threat whereby petrol fuel emission contributes the most pollutant for the city air.

• Bike to Work Group.

• Closing of Jakarta’s city main road during every weekend morning.

û LOW ACCEPTANCE

ü In terms of their choices of fuel, majority will choose cheapest price and practical.

• Vehicle owner will be willing to fill CNG fuel but are hesitant to buy the converter

However,

Although,

• Vehicle owner will be willing to fill CNG fuel but are hesitant to buy the converter kits.

• Not only vehicle owner will be willing to convert their vehicles if converter kits are cheap or free but also if it is practical to fill CNG fuel in every 5 km radius.

ü Most of people in Jakarta understood CNG only as the fuel for the Transjakarta-Busway and some taxi’s owner.

ü In other cities outside Jakarta in fact do not realize CNG can be an alternative fuel for vehicles and that mostly understood natural gas are pipeline gas for industrial usage and misunderstood between CNG and LPG are different commodities.

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INDUSTRY & REGULATORY BODY SUPPORT ü GROWING SUPPORT

ü The NGV industry is gaining a lot of support from DKI Provincial Government commitment in using CNG as their choice of fuel for its Transjakarta’s busses.

ü The NGV industry is receiving real action implementation from the Department of Transportation through the distribution of converter kits for public transportation in cities like Jakarta, Surabaya, Bogor, Palembang, and other cities to come.

ü Provincial governments and county governments regulatory support on CNG.ü Provincial governments and county governments regulatory support on CNG.

ü The Indonesian Government within the past 6 (six) months have communicate through media and indicate it will enforce the usage of CNG as an alternative fuel for the public sector transportation.

ü NGV groups like KANGV and APCNGI establishment and presence have and will continue strengthen the NGV market growth in Indonesia also increase public awareness on new CNG technologies and CNG safety issues.

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APCNGI and KANGV role to participate in Indonesia’s rising NGV industry

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§ Sharing APCNGI members profile and database, sharing CNG members’ business developments, sharing members’ experience and knowledge on CNG business in Indonesia, and promoting public awareness on KANGV and APCNGI cooperation.

§ Develop a business cooperation with

§ Share knowledge on how the private companies in Korea excel in promoting and developing the use of CNG as an alternative fuel for transportation.

§ Assist APCNGI on the basic technical knowledge of Korean’s NGV technology and related facilities, as well an understanding of the design, operation

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§ Develop a business cooperation with KANGV that members’ of APCNGI can obtain enough information on Korean’s CNG equipments and products with a possibility of a flexible but credible financing scheme.

§ Established a strategic program between KANGV and APCNGI on a NGV collaboration projects in Indonesia.

understanding of the design, operation and maintenance for CNG station.

§ Educate on the conformity of safety standards used in Korean’s CNG equipments and CNG Station engineering design.

§ Act as a liaison between APCNGI’s members and KANGV’s members for future NGV collaboration projects.

CNG On-line Station

CNG Trucking Fleets

Daughter Stations

Natural Gas Vehicles

Natural Gas Vehicles

INDONESIA NGV INDUSTRY

NGV COOPERATION PROJECTS DEVELOPMENT

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CNG Station Manufacturers

CNG Cylinders Suppliers

CNG Consultants & Engineers

CNG Operators

CNG Transporters

Training Workshop

CNG Converter Kits Instalator

CNG Cylinders Testing Facilities

NGV Monitoring Systems

MedanLarge Busses: 2913 unitMedium Busses: 4275 unitSmall Busses: 9734 unitPublic Transport: 9758 unitTaxi: 104 unit

DumaiPublic Transport: 479 unit

PekanbaruLarge Busses: 8255 unit

JambiLarge Busses: 3104 unitSmall Busses: 2287 unitPublic Transport: 1038 unitTaxi: 30 unit

BatamTaxi: 2938 unit

SUMATERA

APCNGI-KANGV POTENTIAL COLLABORATION MARKETS:

Large Busses: 8255 unitPublic Transport: 600 unitTaxi: 472 unit

Taxi: 30 unit

PalembangLarge Busses: 468 unitSmall Busses: 504 unitPublic Transport: 2082 unitTaxi: 114 unit

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CilegonPublic Transport: 261 unit

Kota Bogor

JAVA

SerangPublic Transport1002 unit

Kota BekasiLarge Busses: 264 unitMedium Busses: 211 unitPublic Transport: 1732 unitTaxi: 3100 unit

Kab. TangerangLarge Busses: 162 unitSmall Busses: 2465 unitPublic Transport: 3671 unitTaxi: 3399 unit

Kota TangerangLarge Busses: 89 UnitSmall Busses: 300 unitPublic Transport: 2461 unitTaxi: 3698 unit

Kab. BekasiLarge Busses: 46 unitPublic Transport: 1589 unitTaxi: 1287unit

Kab. KarawangTaxi: 1890 unit

DKI JakartaLarge Busses: 2809 unitMedium Busses: 7821 unitSmall Busses: 26002 unitPublic Transport: 2576 unitTaxi: 19827 unit

Kota CirebonLarge Busses: 363 unitMedium Busses: 136 unitSmall Busses: 146 unitPublic Transport: 979 unitTaxi: 60 unit

Kab. CirebonPublic Transport: 1440unit

Kab. GresikPublic Transport: 288 unitTaxi: 40 unit

Kota SurabayaLarge Busses: 463 unitPublic Transport: 6247 unitTaxi: 3996 unitKota Bogor

Large Busses: 239 unitMedium Busses: 73 unitSmall Busses: 4529 unitPublic Transport: 3459 unit

Kab. BogorLarge Busses: 79 unitMedium Busses: 68 unitSmall Busses: 657 unitPublic Transport: 1351 unit

CimahiSmall Busses: 402 unitPublic Transport: 1289 unit

Kota DepokLarge Busses: 157 unitMedium Busses: 46 unitSmall Busses: 568 unitPublic Transport: 2880 unitTaxi: 4072 unit

Kota BandungLarge Busses: 192 unitMedium Busses: 12 unitSmall Bus: 12 unitPublic Transport: 5521 unitTaxi: 1201 unit

Taxi: 3996 unit

Kab. SidoarjoLarge Busses: 307 unitMedium Busses: 144 unitSmall Busses: 1535 unitPublic Transport: 1426 unitTaxi: 130 unit

Kab. MojokertoPublic Transport: 412 unit

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THANK YOU

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Asosiasi Perusahaan CNG Indonesia (APCNGI)Secretariat Office Address: Graha CNG. JL. Tebet Timur dalam II No. 35Jakarta 12820. IndonesiaTelp.: +62-21-8319878; Fax: +62-21-8291391Website: www.apcngi.or.id