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17th INTERNATIONAL CONFERENCE & EXHIBITION

ON LIQUEFIED NATURAL GAS (LNG 17)

Small Scale LNG, The Best Suited for Indonesian’s Archipelago

By: Moch Taufik Afianto, PT Pertamina (Persero)

April 18th, 2013

17th INTERNATIONAL CONFERENCE & EXHIBITION ON

LIQUEFIED NATURAL GAS (LNG 17)

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The presentation is made solely for the purpose of this event and is not intended to be and should not

be used by any other person or entity. The contents may contain copyright and/or legally privileged

information and the reader must therefore not use, copy, disclose or take any action based on this

presentation material or any information herein.

PT Pertamina (Persero) and its respective subsidiaries, affiliates and associated companies (or by

any of their respective officers, employees or agents) will not in any manner whatsoever be deemed

or construed to implicitly or explicitly represent or warrant the accuracy or completeness of the

information or the contents of this presentation material. All consequences and/or liabilities (including

without limitation, those arising from negligence) to other parties for the utilization of the documents

are specifically disclaimed.

Objectives for Small-Scale LNG in Indonesia

Small-scale LNG Projects in Eastern Indonesia

Conclusions

Political

• National Energy Security and Sustainability

• Increase electrification ratio in eastern part of Indonesia

• Reduce fuel subsidy cost

• To increase the portion of gas for domestic use

• Support Government’s Policy in respond of Kyoto Protocol

Market

• To dominate gas market in eastern part of Indonesia

• Create multiplier effects

• Lead development of industries and city gas usage through possible market expansion

Infrastructure & Capability

• Gain more skill, experience, and technology for sustainability

• Create connected national grid of gas infrastructure

• Implement supply chain strategies

• Enter a complete LNG Chain Portfolio, in terms of facilities and size

Increased deployment of small scale LNG in Indonesia will enhance National Energy Sustainability and reduce government diesel subsidies

In Eastern Indonesia, the cost of electricity

generation is up to five times higher due to the

extensive use of diesel fuel.

Indonesia’s

Electricity Cost(*)

PLN (State Electricity Enterprise) to convert diesel fuel to gas fuel in effort to reduce fuel cost for power plant in Eastern Indonesia with potential cost saving of approximately US$ 5,400 million per year.

Small scale LNG come up as the potential options for transporting natural gas to remote gas receiving destinations.

Small scale LNG concept can become an effective gas supply solution for the scattered islands of Eastern Indonesia, where the other transportation modes are not economically viable.

*Cost consists of fuel, power purchase, personnel, depreciation and other operating expenses

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Note:

: Demand Points

: Supply Points

Unlike in Java and Sumatra, construction of extensive gas transmission pipelines in Eastern Indonesia is not feasible as the relatively low gas demand does not justify the high capital investment costs.

Gas pipeline networks are not well established in Eastern Indonesia. LNG is the most strategic solution to balance the supply-demand gap in respect to geographical condition and distance between gas supply to demand points in Indonesia.

Due to marginal demand in the range of 3 to 30 MMSCFD in the eastern region of Indonesia, small scale LNG transportation & receiving terminal is the most suited and efficient way for gas distribution.

Small scale LNG concept is to reach “stranded” LNG markets, which means too far from existing pipeline system, not economically feasible for pipeline extension or new pipeline construction.

Demand volume, geographical profile, and existing infrastructures are the main considerations to choose the right match technologies.

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End User Power Plant & Industry

Coastal Ship LNG Terminal

LNG Satellite Terminal

Container Terminal

Liquefaction Plant

1

2

3

4

5

LNG Trucking

Barge Ship

Pesanggaran

Maros

Pontianak

Pomalaa

Halmahera Bontang

Donggi Senoro Salawati

Small Scale LNG for Eastern Indonesia Location : Maros, Batakan, Tanjung Batu,

Halmahera, Pomala, Pesanggaran

Pontianak, Kupang

Total Capacity : ±1 MTPA

Main Consumer : PLN & ANTAM’s Power Plant

Project Owner : PT Perta Daya Gas

Tanjung Batu

Batakan

30 mmscfd

3 mmscfd

20 mmscfd

10 mmscfd

25 mmscfd

Kupang

16 mmscfd

Supply

Demand Capacity

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FSRU Jateng

0%

20%

40%

60%

80%

100%

120%

0 1 2a 2b 2c 2d3 4a 4b 4c 5a 5b 5c 6a 6b 6c 6d 6e 6f 7a 7b 7c 7d 7e 7f 8a 8b 8c 9a 9b 9c 9d 10 11a

11b

11c

11d

Scenario

Energy Sales Price to Customer

The project must be feasible and competitive

enough with the current diesel price…

…while feasibility of the project depends on the

chosen transportation mode which

proportionally affect the investment and

operating cost employed.

More detailed site surveys are needed to

understand technical hurdles in each locations

(i.e. river width, water draught, road condition,

etc) for converging the scenarios and moving to

a more firm project proposal.

Scenario Destination Possible LNG Source Case Scenario

0 Baseline, Diesel Fuel - Diesel Fuel

1 Kalimantan A PT Badak NGL Land Transport - Truck

2a

Kalimantan B

PT Badak NGL Land Transport - Truck

2b PT Badak NGL Container Barge

2c PT Badak NGL Container Barge A - Truck

2d PT Badak NGL Container Barge B - Truck

3 Kalimantan C PT Badak NGL Land Transport - Truck

4a

Kalimantan D

PT Badak NGL Land Transport - Truck

4b PT Badak NGL Container Barge A - Truck

4c PT Badak NGL Container Barge B - Truck

5a

Kalimantan E

PT Badak NGL Land Transport - Truck

5b PT Badak NGL Container Barge A - Truck

5c PT Badak NGL Container Barge B - Truck

6a

Sulawesi A

PT Badak NGL - A Container Barge

6b PT Badak NGL - A Container Barge - Truck

6c PT Badak NGL - B Container Barge - Truck

6d PT Badak NGL - A Container Barge

6e PT Badak NGL - A Container Barge - Truck

6f PT Badak NGL - B Container Barge - Truck

7a

Sulawesi B

PT Badak NGL - B Container Barge

7b PT Badak NGL - B Container Barge - Truck

7c PT Badak NGL - A Container Barge - Truck

7d PT Badak NGL - B Container Barge

7e PT Badak NGL - B Container Barge - Truck

7f PT Badak NGL - A Container Barge - Truck

8a

Sulawesi C

PT Badak NGL Small Ship

8b Sengkang LNG Coastal Ship

8c PT Donggi Senoro LNG Small Ship

9a

Sulawesi D

PT Badak NGL Container Barge

9b PT Badak NGL Container Barge - Truck

9c PT Donggi Senoro LNG Container Barge

9d PT Donggi Senoro LNG Container Barge - Truck

10 NTB, NTT, Halmahera A PT Badak NGL Coastal Ship

11a

NTB, NTT, Halmahera B

PT Badak NGL Small Ship

11b Simenggaris LNG Small Ship

11c Salawati LNG Small Ship

11d Simenggaris, Salawati Small Ship

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Phase Location Transportation Mode Start Up Plan

1

Maros - South Sulawesi Power Plant 10,000 m3 LNG Coastal Ship To be confirmed

Pesanggaran - Bali Power Plant 12,000 m3 LNG Coastal Ship To be confirmed

Tanjung Batu Power Plant LNG Storage Barge Q1 2016

Batakan Power Plant LNG Trucking Q1 2016

ANTAM Pomalaa Power Plant 10,000 m3 LNG Coastal Ship To be confirmed

2 ANTAM Halmahera Power Plant 10,000 m3 LNG Coastal Ship To be confirmed

3 Pontianak Power Plant LNG Coastal Ship To be confirmed

Kupang Power Plant LNG Coastal Ship To be confirmed

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With increasing need of electrification ratio in eastern part of Indonesia and good spirit for reducing Government subsidy on diesel fuel, PERTAMINA explore the possibility for replacing diesel fuel with cheaper gas to supply power plants and industrial sector in eastern part of Indonesia.

Eastern part of Indonesia has marginal gas demand in the range of 3 to 30

mmscfd, small scale LNG transportation & receiving terminal is the most suitable and efficient way for gas distribution.

Gas demand volume, geographical profile, and existing infrastructures are the

main considerations to choose the right match technologies. Through the development of several small scale LNG projects, Indonesia is

entering into a complete LNG chain portfolio, in terms of facilities and size. A closer stage to reach gas supply – demand balance and to boost national

energy sustainability.

Thank You