The Natural Gas Economics (CHM8120801)

(3 Credits)
Objective: On completion of the course, student should be able to: understand natural gas

industry structure, natural gas market, natural gas pricing and natural gas development and financing, and analyze economical aspects of gas value chain from production, transportation to utilization.
Instructor: Prof.Dr. Widodo W. Purwanto and Guest lecture Content: 1. Overview of natural gas industry What is natural gas, gas uses and gas supply Structure of natural gas industry Natural gas policy (Lecture 1) (Lecture 1) (Lecture 1)

2. Natural gas market

World and national supply and demand of natural gas (Lecture 2) Gas markets structures (LNG, pipeline) (Lecture 2) Deregulation of gas markets Spot markets and trading hubs (Lecture 2

(Lecture 2)

3. Natural gas prices and Tariff Basic pricing theory Natural gas price (pipe gas) Toll fee LNG Pricing (general, asean) 4. Natural gas contracts and sale agreement The important of GSA (Lecture 4) Type and content of GSA LNG contract 5. Economic cost of natural gas value chain Exploration & Production Costs Transportation costs: Pipeline, CNG, NGH Liquefaction, LNG shipping, and Re-gasification costs

(Lecture 3) (Lecture 3) (Lecture 3) (Lecture 3)

(Lecture 4) (Lecture 4) (Lecture 5) (Lecture 6&7) (Lecture 8&9)

6. Natural gas values in demand sectors

Power generation, industry, households, commercials

(Lecture 10&11) (Lecture 12) (Lecture 12) (Lecture 12) (Lecture 13) (Lecture 13) (Lecture 13)

7. Natural gas project development and finance (1) Basic project feasibility Classical project financing Case study : Pipeline gas transportation 8. Natural gas project development and finance (2) Public-Private partnership Organization of Project Finance Case study: LNG Project References:

Tussing, Tippee, The natural Gas Industry. Evolution, Structure and Economics, Pennwell Books, 1995 Fletcher J. Sturm, A Non-Technical Guide. Trading of Natural Gas, Vivek Chandra, Fundamentals of Natural Gas. An international Perspective, Pennwell, 2006 Bob Shively and John Ferrare, Understanding Todays Natural Gas Business, Enerdynamics, 2007. Julius D., Mashayekhi A., The Economics of Natural Gas: Pricing, Planning and Policy, Oxford Institute for Energy Studies, 1990. Ole Gunnar Austvik, Economics of Natural Gas Transportation, Lillehammer College August 2000. 64 pages, Research Report no. 53 ADB and WB reports on Natural Gas Development Proceedings of International Gas Union International Energy and Economic Journals Journal of Energy Policy Internet links: o http://www.naturalgas.org/ o http://publications.worldbank.org/ecommerce/ o http://www.adbi.org/publications/ o http://www.biee.org/ o http://www.stanford.edu/group/EMF/projects/emf23mtg4.htm o http://www.ogbus.ru/eng/economics.shtml o http://www.appanet.org/files/PDFs/NaturalGasPriceOutlook306.pdf o http://www.eia.doe.gov/oiaf/analysispaper/global/lngmarket.html Paper/Presentation (40%); Exam I (30%); Exam II (30%)

Grading System:

Paper Topic & Student

Topics 1. Gas field development 2. Gas pipeline 3. CNG marine 4. LNG 5. LNG Terminal 6. CBM 7. CNG terestial 8. GTL/DME 9. NGH 10. CCGT (GTW)

Students/Group 1 2,11 3,1 4,2 5,3 6,4 7,5 8,6 9,7 10,8 11, 9 10

11. NGV
12 Gas Pricing

group - 2 topic Group 1. Akhmad& Dedy 2. Himawan & Luluk 3. Alex & Nugroho 4. Dhany & Ellen 5. Intan & Izzu 6. Kusnu & Mohamad 7. Siti & Tri 8. Arief & Adi 9. Agustinus &Danny 10. Ketut & Mariana 11. Ratih, Tigor, Yanri Topics