PT Pertamina (Persero) Jln. Medan Merdeka Timur No.1A Jakarta 10110 Telp (62-21) 381 5111 Fax (62-21) 384 6865 http://www.pertamina.com “Building world-class refining capacity for Indonesia’s energy needs” Pertamina Energy Outlook 2015 By : Iriawan Yulianto SVP Business Development PT Pertamina (Persero) Jakarta, 3-4 December 2014 CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of Pertamina is strictly prohibited
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PT Pertamina (Persero)
Jln. Medan Merdeka Timur No.1A Jakarta 10110
Telp (62-21) 381 5111 Fax (62-21) 384 6865
http://www.pertamina.com
“Building world-class refining capacity
for Indonesia’s energy needs”
Pertamina Energy Outlook 2015
By :
Iriawan Yulianto
SVP Business Development
PT Pertamina (Persero)
Jakarta, 3-4 December 2014
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of Pertamina is strictly prohibited
| PERTAMINA 1
Contents
▪ Strategic Challenges
▪ Refinery Development Master Plan (RDMP)
▪ Grass Root Refinery (GRR)
| PERTAMINA 2
1 Based on UNEP, FACTS and McKinsey analysis 2 Not including new refineries and RDMP initiatives
Pertamina Refining face both external and internal challenges to achieve
its strategic aspiration
Internal challenges
External challenges
▪ SWOT analysis reveal various opportunities for GRM improvement
– There is a need to increase GRM across most RU
– Each RU has different key focus based on their SWOT
▪ Indonesia and ASEAN will be short in gasoline and diesel2, hence potentially requiring
Indonesia to import from sources outside ASEAN
– Indonesia will continue to have growing gasoline and diesel deficit
– ASEAN will also be in deficit for gasoline and diesel
▪ There is government support for increasing domestic production of gasoline and diesel
to limit dependency on imports
Security
of energy supply
▪ Indonesia’s demand for gasoline and diesel will continue to grow significantly
– Gasoline demand will grow by about 8% per year from 2012 to 2025
– Diesel demand will grow by about 5% per year from 2012 to 2025
▪ Product quality specifications will become more stringent in the next 5-10 years1
Refining market
▪ Domestic crude availability will decrease and only able to cover less than 50% of
Pertamina’s total refining capacity
– Domestic crude production is projected to decline by ~27% between 2012 and 2020
– In 2020 domestic crude’s total entitlement volume is only 449 MBD, which is less than 50%
of total refining capacity
▪ Pertamina will increasingly import crudes that are more sour, driving the need to release
sulfur constraints to maintain competitiveness
– In 2020 sour crudes will account for ~77% of the total production capacity for import crudes
– Sour crudes are cheaper than sweet crudes, therefore driving Pertamina’s need to release
sulfur constraints to maintain competitiveness
Feedstock
supply
Refinery
configuration
▪ Going forward refineries will have to increase its complexity and sulfur handling capacity
to become more competitive
STRATEGIC CHALLENGES
| PERTAMINA 3
▪ Indonesia’s domestic product coverage is substantially low compared to other
neighboring countries and can potentially pose a threat in security of fuel products
▪ Increasing the domestic production will increase the domestic fuel product coverage
Indonesia’s domestic fuel product coverage is low, posing risks in
security of energy supply
SOURCE: ICIS Supply & Demand Database; Pertamina M&T (only for Indonesia 2030); Team analysis
103 121 109181
262194
715848 44
Full
coverage
Domestic fuel product coverage1
Percent
1 Production [gasoline, diesel, gasoil] / Demand [gasoline, diesel, gasoil]
2 Assumed 400 KBD refinery at 95% utilization; 50% of the production will be gasoline, diesel and gasoil
3 Assumed 300 KBD refinery at 95% utilization, 67% of production for petroleum products, and 67% of this will be gasoline, diesel and gasoil
2013
2025
93 112 125185
224 206
606338 37
Full
coverage 87
118
PTT/SA2
coverage
RAPID3
coverage
1
IDN AUS VNM MYS CHN THA JPN TWN SGP KOR
| PERTAMINA 4
By 2025, Indonesia faces a significant shortage in refining capacity,
equivalent to ~5-8 refineries
1 Includes gasoline, gas oil and diesel 2 Based on base case demand scenario per Pertamina M&T
3 Assumed each refinery produce 200 KBD of fuel products
Indonesia refinery product supply and demand1
KBD
SOURCE: Pertamina M&T, team analysis
12
2012-13
529
1,050 1,050 1,050
2025
541
529
12
1,681
1,948
2,250
2020
541
529
Existing supply
Low case
Additional supply from RU IV RFCC
Base case
High case
Equivalent
to ~4-8
world-
class
refineries3
6.0%2
0.1%
CAGR
4.9%
3.7%
2
Scenarios
Fuel
subsidy
reduction
GDP
growth
Substitution of
gas/bio-fuel
based vehicles
6% No
change
None High
5% 50%
reduction
B10 Base
4% 100%
reduction
B10 and NGV Low
▪ Estimated shortage by 2025
is between 4 and 8 refineries
– High case: ~1,700 KBD
– Base case: ~1,400 KBD
– Low case: ~1,100 KBD
| PERTAMINA 5
Refining Development Master Plan (RDMP) Grass Root Refinery (GRR)
Pertamina is implementing two programs:
RDMP and GRR to close the deficit
SOURCE: Team analysis
West2
KBD
East3
KBD
1,393
529
X2.5
Supply in 2025 Supply in 2013
1 Base case 2 Region I to IV 3 Region V to VIII 4 Nelson Complexity Index
5 Assumed utilization rate of 95% 6 May be pushed to second phase
5 9
Complexity
NCI4
Fuel product demand1
and supply after RDMP
Current After RDMP
1,136
946 190
1,136
1,273
637
447 190
637
675
38
Total
supply
Demand
in 20251
GRR5 After
RDMP
Supply Demand
Building 2 new refineries to meet west and
east Indonesia’s growing demand Des-
cription
Upgrading 5 existing refineries to increase
the capacity and competitiveness Description
2
KBD
BPP
% MOPS 104 94
| PERTAMINA 6
Contents
▪ Strategic Challenges
▪ Refinery Development Master Plan (RDMP)
▪ Grass Root Refinery (GRR)
| PERTAMINA 7
Pertamina’s Refining Development Master Plan (RDMP) will transform
its refining business by upgrading up to 5 major refineries
SOURCE: Pertamina
Crude flexibility
Sulfur handling limit from
0.4% to ~2% S
~2% S of crude flexibility
Crude quantity
From 820,000 BPD
to 1,610,000 BPD
x2 increased capacity
Product quality
EURO IV up from EURO II
Gasoline from 500 to <50 ppm S
Diesel from 3,500 to <50 ppm S
Complexity
8-9 NCI
Complexity improved
from 5 to 8-9
Dumai refinery
Balikpapan refinery
Plaju refinery
Balongan refinery
Cilacap refinery
PRELIMINARY
| PERTAMINA 8
RDMP strategic partner selection process in currently in progress;
Pertamina would like to sign MOU with strategic partner(s) on Dec 10
By 2030, Indonesia will need 3-6 new refinery equivalents and Pertamina is
implementing 2 programs to close the gap
1
| PERTAMINA 17
Thank You
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