Downstream Perspective on Challenges to Sustainable Gas Challenges to Sustainable Gas Development in Indonesia Jakarta - January 28, 2015 Ministry of Industry Jl. Gatot Subroto Kav. 52-53 Jakarta Selatan
Downstream Perspective on
Challenges to Sustainable Gas Challenges to Sustainable Gas
Development in Indonesia
Jakarta - January 28, 2015
Ministry of Industry
Jl. Gatot Subroto Kav. 52-53 Jakarta Selatan
Overview
Economy Outlook
Gas Demand on Industry Sector
Supply for IndustrySupply for Industry
Infrastructure
Gas Price
Energy
INDONESIA ECONOMY AND INDUSTRY GROWTH
3rd Trimester 2014 (percent)
INDUSTRY GDP GROWTH
2005 2006 2007 2008 2009 2010 2011 2012 2013Tw I-Tw III
2014
5,86 5,27 5,15 4,05 2,56 5,12 6,74 6,42 6,10 5,30
ECONOMY GDP GROWTH
2005 2006 2007 2008 2009 2010 2011 2012 2013Tw I-Tw III
2014
5,69 5,50 6,35 6,01 4,63 6,22 6,49 6,26 5,78 5,11
Source : BPS
3
INDUSTRIAL TARGET OF THE YEAR
No Indicator Unit 2015 2016 2017 2018 2019
1 Non-Oil&Gas Industrial Growth % 6.93 7.34 7.76 8.17 8.59
2 Labour million 15.83 16.39 16.96 17.56 18.17
INDUSTRIAL GROWTH TARGET 2015-2019
Next years, upstream oil and gas projects will be dominated by gas project on the off share area.
Oil & Gas Projects DevelopmentOutlook onstream Oil and Gas Projects
40
60
80
100
120
MB
OE
PD
5241
78
32
78
97
2014 2015 2016 2017 2018 2019
Gas Minyak & Kondensat
Jangkrik NE
Jangkrik
IDD - Bangka
MDA-MBH
0
20
40 30 28
2 3
32
18
3
Ul
Banyu Urip
Peciko-7C
Handil Ph-4
Kepodang
Area MTD
Senoro
Musi Timur
GG
Blok A
South MHK
Ande-ande
Lumut
YY
Bukit Tua
IDD-Gendelo
Bukit Tua
IDD-Galem
Jam TBR
Source : SKK Migas
Tangguh Train 3
Gas Demand for Industry
No. DEMAND 2014 2015 2020 2030
INDUSTRY 2.200,76 2.280,93 2.993,23 3.018,15
A Raw Material 1.068,22 1.086,22 1.736,22 1.739,32
1 Fertilizer 773,22 791,22 1.028,22 1.028,22
2 Petrochemical 295,00 295,00 708,00 711,10
B Energy 1.132,54 1.194,71 1.257,01 1.278,83
(MMSCFD)
B Energy 1.132,54 1.194,71 1.257,01 1.278,83
a. Process include 336,03 337,18 379,17 379,41
1 Ceramic 133,82 133,95 134,68 134,68
2 Glass 81,19 81,19 81,19 81,19
3 Glassware 28,38 28,38 28,60 28,83
4 Cement 8,00 8,00 10,00 10,00
5 Steel 80,00 80,00 120,00 120,00
6 Rubber Glove 4,65 4,67 4,70 4,70
Source : FIPGB
No. DEMAND 2014 2015 2020 2030
b. Fuel 796,51 857,53 877,84 899,42
1 Food and Drink 57,72 62,96 68,25 75,81
2 Steel 148,88 148,98 134,34 134,63
3 Textile & Products 36,01 36,16 36,98 37,89
Gas Demand for Industry
(MMSCFD)
4 Petrochemical 157,96 169,96 170.86 170,86
5 Paper 270,32 301,92 307,92 319,92
6 Wheel 51,57 53,30 55,45 55,45
7 Vehicles 4,89 4,89 4,89 4,89
8 Other 69,16 79,36 99,15 99,98
Source : FIPGB (data update : 20 Maret 2014)
Banda Aceh
Industri : 5 prsh
Kebutuhan : 130 mmcfd
Gas Industry User 2014
Sumatera Utara
Industri : 28 prsh
Kebutuhan : 45,32 mmcfd
Kalimantan Timur
Industri : 7 prsh
Kebutuhan : 522,99 mmcfd
Riau
Industri : 6 prsh
Kebutuhan : 60.65 mmcfd
Kebutuhan :
2014 : 2.200,76 MMSCFD
2030 : 3.018,15 MMSCFD
Papua
Industri : 2 prsh
Kebutuhan : 0 mmcfd
Sulawesi Tengah
Industri : 1 prsh
Kebutuhan : 70 mmcfd
Jawa Bagian Timur
Industri : 133 prsh
Kebutuhan : 253,80 mmscfd
Jawa Bagian Barat
Industri : 321 prsh
Keb. : 839,17 mmcfd
Jawa Bagian Tengah
Industri : 9 prsh
Keb. : 21,01 mmscfd
Source : FIPGB
Sumatera Selatan
Industri : 11 prsh
Kebutuhan : 257.46mmcfd
Maluku
Industri : 2 prsh
Kebutuhan : 0 mmcfd
Kebutuhan : 70 mmcfd
Sulawesi Selatan
Industri : 4 prsh
Kebutuhan : 0,36 mmcfd
PGN Supply
2015
• Western Java (Palembang, Cilegon, Tangerang, Jakarta, Bogor,
Bekasi, Karawang) supplies high of 680 MMSCFD of gas and 600
for the lowest tinggkat. Supply comes from Philip PHE Chonoco
Pager Dewa. And in 2015 will get a supply of Lampung FSRU for
the first phase supply of 100 MMSCFD.
• Jawa Timur (Gresik, Sidoarjo/Mojokerto, Pasuruan/Probolinggo),
supply good enough.
• Central Java, will be supplied through the program MINI CNG
transported by truck from Gresik.
• Medan, will increase supply through LNG MICRO program for 5-
10 MMSCFD to be transported from Batam.
� Medan, will be supplied from the Tangguh LNG cargo at 28 or
23.96 million metric tonnes, while the gas to be supplied from
the rest of the Exxon gas before Arun LNG receiving terminal
ready.
� Jawa Barat, supply ammount250 (PLN and Industry).
Pertagas Niaga Supply
(2015)
� Jawa Barat, supply ammount250 (PLN and Industry).
� Jawa Tengah, CNG gas will be supplied through the tubes
reparing pipeline from Gresik to Semarang.
� Jawa Timur, will get an extra addition of 30-40 Hesky MMSCFD
and in 2019 there will be a supply of Tiung Blue at 100
MMSCFD.
Gas Pipeline
• Transport system by pipeline is very important and
relatively inexpensive, these costs include the cost of
survey and mapping, pipeline route liberation, network
communications, facilities maintenance, measurement communications, facilities maintenance, measurement
stations, protection against rust, compressors, valves
and safety equipment appropriate to be consumed,
simulation Kalija pipeline transportation costs only
25% of the price of gas 1 BBTUD.
Transmission Pipeline Network
Transmission pipeline network with a total length SSWJ 2,157 miles.
Duri
Medan
KALIMANTAN
SULAWESI
Panaran Station, Batam
PLN - Medan
Jakarta
Grissik
Pagardewa
SULAWESI
JAWA
PAPUA
Labuhan Maringgai
Muara Bekasi
Terbanggi Besar St.Pagardewa Station Labuhan Maringgai St Muara Bekasi Station
Grissik Receiving Station
Pagardewa Compressor St.
Keterangan:
South Sumatera – West Java Transmission
Pipeline (SSWJ):
Grissik – Duri transmission pipeline
Grissik – Singapore transmission pipeline
Distribution Pipeline Network
• Pipa Dist.: 587 km
• Pipa Trans.: 33 km
• (Future LNG RT)
70 % Pipa PE (Industri, komersial, UMKM & RT)
SUMUT
Pipa Dist.: 56 km
19 % Pipa PE (Industri, komersial, UMKM & RT)
BATAM
Pipa Dist.: 135 km
PALEMBANG
Total panjang jaringan
distribusi: ±±±± 3.900 km untuk
melayani 88.134 pelanggan
(industri, komersial, UMKMdan rumah tangga).
PGN Pipeline = 44,4% from total downstream gas pipeline in Indonesia*
* Source: Kepmen ESDM 0225/ tahun 2010
Pipa Dist.: 135 km
99,8% Pipa PE (Industri, komersial, UMKM & RT)
Pipa Dist.: 709 km
30% Pipa PE (Industri, komersial, UMKM & RT)
JATIM
Pipa Dist.: 2.400 km
50% Pipa PE (Industri, komersial, UMKM & RT)
JABAR
Pipa Dist.: 11 km
PEKANBARU
Infrastructure Development Plan in West Java
PGN
• Will develop distribution pipeline network to Sukabumi
• Will develop distribution pipeline network to Subang
Infrastructure Development Plan in Central Java
1. PGN,
• Will build the terminal Tambak Aji, gas supplied from Gresik by truck in
2. Pertagas
• Will connect the pipe Gresik - Semarang, for while the distribution of gas
(CNG) is done with tubes.
• Will build the terminal Tambak Aji, gas supplied from Gresik by truck in
miniature CNG with gas prices of USD 14.8 per MMBTU.
• Will develop pipeline network from Cirebon to Semarang.
• Will develop pipeline network from Kepodang to Tambak Lorok.
1. PGN, will develop on area Tuban and Lamongan
2. Pertagas, transmission pipeline connecting from Kangean to Gresik.
East Java Infrastructure Development
Gas pipeline system by Pertamina (Jawa Timur)
Infrastructure Development Plan Infrastructure Development Plan in North Sumaterain North Sumatera
1.1. PGNPGN
– PGN, is preparing a program of micro LNG is transported
from Batam by 5-10 MMSCFD to port in Belawan, Medan
at a price of USD 17 per mmbtu.
2. 2. PertaminaPertamina Gas (Gas (PertagasPertagas))
– Pertagas, the construction of the pipeline installation
Arum - Belawan already connected and LNG supply to
industry and PLN planned to start early 2015.
– For a while, the gas flows are the rest of the Exxon gas
production before Arun LNG receiving terminal ready.
– Further development in 2015 will connect Belawan
Pertagas-KIM (Medan Industrial Estate) and KIM -
Tanjung Morawa.
Gas Price
Tariff USD per mmbtu Adm Fee per m3
SBU Wilayah I Jawa Bagian Barat
K1 7.90 770
K2 7.90 750
SBU Wilayah II Jawa Bagian Timur
K1 6.43 770 K1 6.43 770
K2 6.43 750
SBU Wilayah III Sumatera Bagian Utara
K1 7.25 690
K2 7.25 660
• Singapura since June-July 2013 (Sing $) : 4,08; 4,09; 4,12; 4,74; 5,16; 5,04
• Malaysia June 2012-July 2012 (Ringgit Malaysia) : 10,20; 1012; 11,81; 12,72; 12,19; 12,06
Malaysia sale to electricity company RM 13,7 or USD 4,47
• Data Platts : gas delivery Asia on pegged USD 14,49
Gas Price in Several Countries
• Data Platts : gas delivery Asia on pegged USD 14,49
• Philipine : USD 5,43
• Vietnam : USD 7,50 (for electricity : USD 6, fertilizer : USD 8,50)
• India : USD 5,42, April 2014 will increase USD 8,4
• China : USD 4,55, will increase 15%
Although China and India will raise the price of gas in the country but will not exceed delivery to Asia, USD 14,49.
Recent Energy Supply (1)
• Provision of energy is still dominated by fossil fuels (oil, natural gas and
coal) are not renewable, so not reflect the principles of sustainable
energy.
One-third of the fuel consumption is imported so not reflect the
principle of independence.
• Renewable energy potential is quite large, even not used and • Renewable energy potential is quite large, even not used and
underused (only about 5%), because it was perceived expensive.
• There is a sort of 'inequality' in access to supply (grid) energy. Area
GDP is high and as a foreign exchange earner, even relatively low
electrification ratio, so do not reflect the principles of fairness.
• Excessive use of fossil energy resulting in increased GHG emissions
resulting global warming and climate change.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
1. Electricity Subsidies3,93 4,30 4,10 3,36 3,31 10,65 33,90 37,48 78,58 53,72
2. Electricity Fossil
Subsidies *)3.30 3.55 3.49 2.92 2.86 9.20 29.75 32.63 68.16 46.14
3. Fuel Oil Subsidies55.64 63.26 31.75 30.04 59.18 103.35 64.21 83.79 139.03 45.04
Total Fossil Subsidies58.94 66.81 35.24 32.96 62.04 112.55 93.96 116.42 207.19 91.18
Recent Energy Supply (2)
• Electricity subsidies in 2015 is estimated to reach Rp. 72.4 trillion by the quality of
the supply continues to decline.
• Fuel subsidies, is expected to rise 7.6% compared to the state budget APBN-P in
2014 amounted to Rp 246.5 trillion. 249 trillion.
58.94 66.81 35.24 32.96 62.04 112.55 93.96 116.42 207.19 91.18
Sumber : Kementerian ESDM
NO RENEWABLE ENERGYRESOUCES
(R)CAPACITY(C)
RATIO C/R(%)
1 2 3 4 5 = 4/3
1 Water 75,670 MW 5,705.29 MW 7.54
2 Geothermal 28,543 MW 1,189 MW 4.17
3 Mini/Micro Hydro 769.69 MW 217.89 MW 28.31
4 Biomass 49,810 MW 1,618.40 MW 3.25
5 Solar Cell 4.80 kWh/m2/day 13.5 MW -
6 Wind 3 – 6 m/s 1.87 MW -
7 Uranium3.000 MW
30 MW 1.00
Energy Reserves and Production
7 Uranium(e.q. 24,112 ton) for 11 years*)
30 MW 1.00
*) Only in Kalan – Kalimantan Barat
No UNRENEWABLE ENERGYRESOURCES
(R)
RESERVES
(RS)
RATIO R/RS
(%)
PRODUCTION
(PROD)
RASIO RS/PROD(YEAR)*)
1 2 3 4 5 = 4/3 6 7 = 4/6
1 Oil (billion barel) 56.6 7.99 **) 14 0.346 23
2 Gas (TSCF) 334.5 159.64 51 2.9 55
3 Coals (billion ton) 104.8 20.98 18 0.254 83
4 Coal Bed Methane/CBM (TSCF) 453 - - - -
*) No new reserve assumption
**) Include Blok Cepu Source : Kementerian ESDM
Expected Energy Management (1)
• Relatively clean gas, is used as a "bridge" towards the provision of
renewable energy in the long term.
• The existence of 'energy sovereignty' in the sense that Indonesia
has the freedom / "independence" to utilize its own energy
source.
• Bureaucracy and energy governance 'is not complicated "but"
powerful "and respected.
• Energy supply is no longer a sufficient supply, but also to be self-
sufficient, sustainable and equitable for the people of many
(Vision Energy +).
• First streamline the supply and use of energy.
• Efficient use of energy.
Expected Energy Management(2)
• Minimize the use of fossil fuels (oil and coal), while natural gas is
used as an interim step.
• Maximize the use of renewable energy, fossil energy balance.
• The results of the energy sources are prioritized to (returned to)
the provision of energy, state revenues derived from taxes.the provision of energy, state revenues derived from taxes.
• Presents' role of the state "when the economic principle unmet”.
• The change from "Energy Subsidies" to "Investment Subsidies"
for Energy Infrastructure and Consumer Subsidy Focus.
GAS DEMAND FOR PETROCHEMICAL INDUSTRY DEVELOPMENT IN WEST PAPUA
ProductCapacity
(Ton Per Year)
Gas Volume Demand
MMSCFD
Urea 2,300,000 180
Methanol (intermediate)
• DME
• Polypropylene
1,310,000
160,000
321,000
140
The next continues development 458
The next continues development
(Methanol and Polypropylene)458
TOTAL 778
• Total gas demand as raw material Petrochemical industry for 25 years with the production
efficiency of 330 days per year;
• Required for gas for 25 years in accordance with the economical factory;
• Based on the meeting with Kem. EMR and BP Migas on August 29, 2012, the allocation of
gas to the fertilizer industry in West Papua by 180 MMSCFD can be met with regard to the
economic field.
• While for industrial methanol, BP Migas convey available gas reserves in Papua (not
necessarily from Tangguh) that can be produced with regard to the economic development
of the field.
GAS DEMAND FOR FERTILIZER INDUSTRY REVITALIZATION
PlantsCapacity
(Ton)
Gas
Demand
(mmscfd)
Operating
Timeline
Kaltim-5 1,155,000 80 2014
Pusri IIB 907.500 62 2016
Pusri IIIB 1.150.000 70 2017
Ammonia Urea II 570,000 85 2015
FERTILIZER INDUSTRY
REVITALIZATION
• Presidential Instruction No. 2 Year
2010 on Fertilizer Industry Revitalization Ammonia Urea II
PT. PKG
570,000 85 2015
Kujang IC 907,500 86 2017
Total 4,690,000 383
2010 on Fertilizer Industry Revitalization
•Fertilizer industry revitalization
program includes replacement of
four (4) old age urea plant (Pusri II,
Pusri III, Kaltim-1, and Kujang IA)
and the construction of one (1)
new urea plant Ammonia Urea II
PT.PKGThe gas supply to fertilizer industry revitalization newly acquired
for Kaltim-5 and Pusri IIB
Not to obtaining gas allocation caused a shift in plant operations
plan that can affect the supply of fertilizers to support food
security
Upstream
• Exploration and exploitation in oil and gas fields
• LNG receiving terminal
• LNG processing plants (LNG Plant)
• Development of Unconventional Gas (CBM, Shale Gas, Tight Gas, & Biogenic Gas).
ACCELERATION OF GAS INFRASTRUCTURE DEVELOPMENT
RECENT CONDITIONRECENT CONDITIONRECENT CONDITIONRECENT CONDITION
“Accelerated development of gas infrastructure is required in order to
support an increase in the allocation of gas for domestic purposes”
Downstream
• Refineries
• LNG Storage & Receiving Terminal
• Gas pipelines (transmission & distribution)
• Development of Coal Conversion to Fuel (Liquid or gas)
“Accelerated development of the gas infrastructure is not only
the responsibility of the Government, but the need to involve
the private sector role”
Reserves and activitiesoil and gas exploration are in
Eastern Indonesiamainly deep water projects,
while gas consumersthe largest centered in Java
� The industrial sector has a strategic role as an engine of national
economic growth that needs to be supported by the availability
of raw materials and energy.
� Necessary assurance of gas allocation for the industry to operate
optimally and facilitate future development plan industrial sector.
CONCLUSIONCONCLUSION
� Domestic gas demand to continue to rise, so it is necessary to
accelerate infrastructure development in addition to the
development of gas from unconventional gas potential.
� Discussion and policy on natural gas prices is required in
accordance with the economic field to attract investors by
considering the benefits and added value that can be obtained,
as well as employment.