INDONESIA
GAS/LNG DEVELOPMENT POLICY
BY :
DIRECTORATE OF PROCESSING AND COMMERCE
DIRECTORATE GENERAL OF OIL AND GAS
REPUBLIC OF INDONESIA
APEC EGCFE WORKSHOP
TAIPEI, MARCH 21-23, 2005
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
THE ROLE OF GAS
FOR INDONESIAN DEVELOPMENT
INDONESIAN DEVELOPMENT
SOURCES OF
ENERGY FOR
DOMESTIC
SOURCES OF
GOVERNMENTS
INCOME
OIL
FEEDSTOCK
TO STRATEGIC
INDUSTRIES
GAS
ENERGY SECTOR
INDONESIA GAS RESERVES
( STATUS JANUARY 2003 )
NATUNA
ACEH
8.8
54.8
East
Kalimantan
North
Sumatera 0,73
Central
Sumatera
South
Sumatera
44.5
7.5
SULAWESI
PAPUA
19.3
4.1
26.6
5.9
West Java
Gas Reserve (TSCF)
P1+P2+P3
5.7
East Java
TOTAL INDONESIA = 178,1 TSCF
INDONESIA GAS RESERVES
(1984-2003)
PSC
YEAR 2003
0,93 BSCFD
PERTAMINA
INDONESIA GAS PRODUCTION AND
UTILIZATION
PROD.
7,49 BSCFD 8,42 BSCFD
DOMESTIC
42,4%
EXPORT
57.6%
6
GASUT2001/14-01-2002
INDONESIA
GAS PRODUCTION AND
UTILIZATION
INDONESIAS LNG PLANT
ARUN
Capacity : 12.85 mtpa
(6 Trains )
Bontang
Capacity : 21.64 mtpa
(8 Trains)
Start up 1977
Plant to be expanded : Train I
Start Up 1977
TANGGUH
GAS RESOURCES
Capacity : 7 mtpa
Status:Under Construction
LNG INDONESIA
EXISTING FACILITIES
ARUN
Train 1
Train 2
Train 3
Train 4
Train 5
Train 6
2.14 MMTon/yr
2.14 MMTon/yr
2.14 MMTon/yr
2.14 MMTon/yr
2.14 MMTon/yr
2.14 MMTon/yr
BONTANG
1978
1978
1978
1983
1984
1986
Train A
Train B
Train C
Train D
Train E
Train F
Train G
Train H
2.62
2.62
2.62
2.62
2.73
2.73
2.74
2.95
MMTon/yr
MMTon/yr
MMTon/yr
MMTon/yr
MMTon/yr
MMTon/yr
MMTon/yr
MMTon/yr
1978
1978
1978
1983
1984
1986
1986
1986
PLANT TO BE DEVELOPED
LNG Tangguh (2 x 3.5 MMTon/yr)
Bontang Train I (3 MMTon/yr)
INDONESIAN LNG EXPORT
(Million Tons)
'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
Taiw an
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
10
INDONESIA LNG CONTRACTS
11
INDONESIA LNG CONTRACT
CONTRACT
VOLUME
(MTPA)
MARKET
LNG
PLANT
TERM
EXISTING
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
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
12
TOTAL
11,87
INDONESIA GAS TRANSMISSION
MAP
THAILAND
LAOS
Manila
Bangko
CAMBODIA
kBan
Mabtapud
Eraw
an
Khan
on
Song
khla
South
Phnom VIETNAM
Penh
Ho Chi
Minh
City
500 MMSCFD
2. West Natuna P. Sakra : 28
x 656 Km,
China
Sea
325 MMSCFD
3. Hangtuah (Mogpu) Duyong :
28 x 96 Km,
250 MMSCFD
Jerneh
Gunto
ng
WEST Kert Duyon
gMogp
eh
MALAYSI
A
u
Kuala
Lumpur
Port
Klang
Port
Dickson
Dum
ai
Duri
West
Natun
a
SINGAPORE
Bata Binta
n
m
Bandara
Seri
Begawan
Bint
Kuchi
ng
450 MMSCFD
HALMAHER
A
U
M
A
T
R
Atta
Tun
ka
Beka
u
pai
Sorong
SULAWESI
Banjar
masin
Palemb
ang
Jakar
ta
BURU
IRIAN JAYA
SERAM
Ujung
Pandan
g
Ardjuna
Fields
Cireb Semar
on
ang
MADUR
Bangk
J A V A SurabAalan
INDONESIA
GAS TRANSMISSION SYSTEM
Samari
nda
Balikpapa
n
aya
FUTURE REGIONAL
Pacific Ocean
Ternate
Bontang LNG
Plant
&
Export
Terminal
Jamb
i
Existing Gas Pipelines
Planned Gas Pipeline
5. Pagerungan Grissik : 28 x
380 Km,
Manado
KALIMANTAN
Griss
ik
350 MMSCFD
EASTulu
MALAYSIA
S
Pada
ng
4. Grissik P. Sakra : 28 x 490
Km,
Kota
Kinibalu
BRUNEI
Alph
Natun
a
a
Singapor
e Gas
Trunkline
Pena
ng
Meda
n
1. Grissik Duri : 28 x 530 Km,
Philipines
Bangkot
Lawi
t
Banda
Aceh
Lhokseu
mawe
TRANSMISSION PIPELINE & FLOW
Indian Ocean
I N D O N E S I A
BALI
Pagerunga
n
SUMBAW
A
FLORES
LOMBOK
SUMBA
TIMOR
AUSTRALIA
13
L-9
GRAND 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
14
OPTIMIZING
UTILIZATION OF NATURAL GAS
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)
15
GAS POLICYS PLATFORM
TO ROLL BACK PETROLEUM
FUEL SUBSIDY
TO INCREASE ROLE OF GAS IN
THE ENERGY MIX
FOR DOMESTIC
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
16
GOVERNMENT BASIC
POLICY
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.
17
KEY ISSUES
DOMESTIC VS EXPORT ISSUE
DEVELOPMENT OF LNG BUSINESS
ROLE OF GAS IN INDONESIAS ENERGY MIX
SHIFTING PARADIGM FOR LARGE GAS RESERVES
THE LOCATION OF GAS RESERVES FROM DEMAND
CENTER (GEOGRAPHICAL ISSUE)
PRICING MECHANISM AND POLICY
GAS INFRASTRUCTURE
INDONESIA INTEGRATED GAS PIPELINE SYSTEM
TRANS ASEAN GAS PIPELINE (TAGP)
18
THE MARKET DEVELOPMENT OF
INDONESIAS LNG
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.
19
CONCLUSIONS
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
20
THANK YOU
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