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 StrategyforGasAllocation
2011 BPMIGAS All rights reserved

Conclusions

IndonesianLNG ExistingCondition
Arun&Bontang
No.
Arun LNG 12.3 MTPA Bontang LNG 22.2MTPA Tangguh LNG 7.6MTPA

Destination Country Japan South Korea Taiwan

Volume(MTPA) 6.32 2.04 1.84

1. 2. 3.

Tangguh
@2010 BPMIGAS.Allrightsreserved

No. 1. 2. 3. 4.

Destination Country SouthKorea USA China Japan

Volume(MTPA) 1.15 3.7 2.6 0.36

Bontang&ArunLNG
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

@2010 BPMIGAS.Allrightsreserved

New LNG Projects

Tangguh Train 3
MATINDOK J

2010BPMIGAS Allrightsreserved

MASELA

Muara Bakau

IDD

Future LNG Receiving Terminals

Arun Regasification Belawan FSRU

West Java FSRU

Central Java FSRU

2010BPMIGAS 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

@2010 BPMIGAS.Allrightsreserved

10

Overview of Domestic Gas Demand and Supply

Domesticgasdemandwouldgrow5.1%
2.9 BCFDin2007to5.5BCFDby2020.

Drivingfactorsforsuchstronggrowth:
oilsubsidyphasedout,electricityshortagesandcapacity expansionforindustryandelectricityplant.
@2010 BPMIGAS.Allrightsreserved

Decliningexistingsupplyrequiresfastexecutionof newgasdevelopment project,e.g:

Ongoingproject:Terang Sirasun,Cepu,SenoroMatindok, Abadiandothers Newprojects:NatunaDAlpha,CBMand others.
11

GasBalance&Gas SupplyScenarios
Existingcontractualgassupplyboth forexportanddomesticuse will decline. Despitethedecline,theremightbe additionalvolumeforgasexport underthefollowingconditions: Domesticdemandside managementbyintroducingenergy conservationandoptimizationof primaryenergysupplies. Strongexpansionofnaturalgas development,includingCBM.
12000 10000 8000

BBTUD

6000 4000 2000 0

@2010 BPMIGAS.Allrightsreserved

ContractedEkspor ExistingSupply

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
ContractedDomestic ProjectSupply CommittedDomestic 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.

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

@2010 BPMIGAS.Allrightsreserved

14

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

@2010 BPMIGAS.Allrightsreserved

15

THANKYOU

16