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Widhyawan Prawiraatmadja Deputy Chairman for Commercial Management Special Task Force for Upstream Oil & Gas Business Activities (SKK Migas) Bali, 19th May 2014
Indonesia has been a LNG producer for more than 35 years with 3 major LNG Plants
1972 First discovery of Arun Gas Field
1971 First discovery of Badak Gas Field
1977 First shipment of LNG loaded
1982 World record for safety awarded to PT. Badak
1994 First discover of Wiriagar Deep Gas
2002 • Gas sales purchase
agreement with Fujian, China
• Tangguh became the third LNG center in Indonesia
2004 Gas sales purchase agreement with: • POSCO, Korea • K-Power, Korea • Sempra, US • Tohoku
2010 Gas sales purchase agreement with Chubu Electric Power, Japan
2016 Chevron IDD Bangka Field on stream
2018 • Chevron IDD Gehem • Inpex Masela
2019 • Train 3 BP
LNG Tangguh • VICO CBM
2009 1st LNG Shipment from BP Tangguh
2012 1st LNG Shipment from Badak to West Java FSRU
2017 • ENI Muara Bakau • Chevron IDD Gendalo
Started since 1977 from two LNG plants in Arun (Aceh) and Bontang (Kalimantan), and their capacities are gradually increased to 12.3 MTPA and 22.2 MTPA respectively. Both plants reached its peak production at 29 MTPA in 1999, and had declined to 11.5 MTPA in 2013.
The third LNG center called as Tangguh is established in Papua since 2004 and started its production at the end of 2009, and produce 7.12 MTPA in 2013, approaching its capacity production of 7.6 MTPA.
0
5
10
15
20
25
2005 2006 2007 2008 2009 2010 2011 2012 2013
M T
P A
BONTANG
Production Trend of 3 LNG Plants in Indonesia (2005-2013)
Government of Indonesia have been showing commitment to improve regulatory management in the upstream industry
Regulatory
There is a concerted effort to transform the licensing process into one door licensing system within related institutions. In the upstream oil and gas, the current progress is to simplify all permits into 8 type of licenses:
Government Effort
• land acquisition license • forest area utilization • foreign ship utilization • dry docking FSO/FPSO
• drilling waste dumping • licenses by province government • licenses by regency government • license for land intersection with
train
On process to create good investment climate by: 1. Exploration incentives 2. Provide good data for exploration area 3. Implement tax free on using shared facilities
• In meeting growing Indonesia’s gas demand, Increasing LNG use for domestic consumption is unavoidable. Gas infrastructure will be key in facilitating the consumption growth.
• Indonesia used to be a net-oil exporter but shifted to a net-oil importer in 2003, nonetheless Indonesia still exports crude oil until today. If it is done optimally, there is nothing wrong to import gas for domestic use. Pertamina has already secured volumes from US LNG.
• The existence of growing domestic demand and export contracts create an opportunity to supply gas in a portfolio basis.
• Significant gas base load demand can be created, as replacement of fuel base consumption, especially since gasoil use is still spread out. Once the base demand and infrastructure are in place, gas consumption will proliferate, hence creating Indonesia not only as importance LNG producers but also as LNG consumers.
• The big question is “Can Indonesia create a good investment climate so that continuing natural gas exploration and production as well as its infrastructure development can be a sustainable business proposition?”
HEAD OFFICE Wisma Mulia LG, 21, 22, 23, 27, 28, 29, 30, 31, 33, 35, 36, 37, 38, 39, 40 Jalan Jenderal Gatot Subroto Kav. 42, Jakarta 12710, INDONESIA
PO BOX 4775 Telephone : +62 21 2924 1607
Facsimile : +62 21 2924 9999
SPECIAL TASK FORCE FOR UPSTREAM OIL AND GAS BUSINESS ACTIVITIES (SKK Migas)