PGN’s Role as Sub Holding Gas

In Developing Gas Industry in Indonesia

Prepared for International Indonesia Gas Conference & Exhibition
Jakarta, 20 February 2019

PT. Perusahaan Gas Negara Tbk.

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TODAY’S AGENDA

THE SUB HOLDING GAS AND GAS INDUSTRY

1
IN INDONESIA

2 CHALLENGES AND TRANSFORMATION

IN GAS INDUSTRY

3 PGN’ STRATEGY TO FACE NEW LNG ERA

IN GAS INDUSTRY

2
PGN - THE SUB HOLDING GAS

UPDATE ON INTEGRATION SCOPE OF BUSINESS

INDONESIA GAS INDUSTRY
UUD ’45 UU KEN RUEN RUED P

VISSION, MISSION AND OBJECTIVE OF INDONESIA ENERGY MANAGEMENT

"realization of fair, sustainable, and environmentally sound energy management by prioritizing the development of
renewable energy and energy conservation in order to realize national energy independence and resilience"

Target *) Real **)

Gas 1.295 mboepd 1.139 mboepd
Production
Pipeline 18.322 km ± 16.000 km
Length
Existing
Domestic 64% 58%
Condition
Utilization
Renewable Energy
Oil
Natural Gas
*) As stated as 2019 Target in RPJMN 2015 – 2019
Coal **) Real in 2018
GAS INDUSTRY CHALLENGES

1 Gas Supply 2
Regasification 3 Distribution 4 Consumers
& Transmission
± 65 Gas Trading ± 4.400 MMSCFD *), Power, Industry,
± 7.600 MMSCFD, 142 TCF ± 10.000 km, 4 Regas Commercial, Household, City gas
Company
Facilities

High cost
High risk
investments, High
(pioneering),
risk, lack of visibility
challenge to open
and complex
new area, complex
operations High investments,
operations Demand driver, price
high risk, limited
sensitive, substitution
availability, Low
from other energy
utilization

Challenge : to integrate coordination and collaboration between gas value chain members to deliver maximum
value to consumers.

*) Domestic gas consumption, equal to ± 750.000 BOEPD

TRANSFORMATION OF DOMESTIC GAS UTILIZATION

GAS PIPELINE ERA LNG ERA NEW LNG ERA

1961 1974 1998 2012 2024
2018

Domestic gas Domestic gas Domestic gas Domestic LNG utilization Potential LNG import (based
utilization expansion expansion (LNG NR, LNG Lampung) on Indonesian Gas Balance
– for Scenario II and III)
Direct utilization Gas distribution Downstream LNG Utilization from
from upstream to for city gas transmission Bontang and Tangguh
bulk customers business
 POLICY AND REGULATION REFORM ON GAS INDUSTRY
▪ Policy and regulation of gas industry is directed to support the domestic natural gas optimization and acceleration of
downstream infrastructure development and streamline domestic gas value chain.

SUPPLY INFRASTRUCTURE MARKET

Permen ESDM 6/2016 Permen ESDM 29/2017 Permen ESDM 58/2017
Gas allocation to support infrastructure Simplify oil and gas business license issueance Downstream natural gas pricing policies
development
Permen ESDM 4/2018
Oil and gas downstream business policies

Per BPH Migas

Transportation tariff determination, Transmission &
Distribution network bidding mechanism

Optimizing natural gas Improving quantities and Guaranteeing the efficiency Providing legal assurance Fulfilling consumer’s right and
consumption for qualities of gas and effectiveness of natural for gas business protection
domestic usage downstream gas delivery for domestic
infrastructure usage

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NEW ERA OF LNG IN GAS INDUSTRY

Sub Holding Gas Strategy:

Fuel to Gas conversion

(refinery, transportation, smelter,
city gas)

Increase gasification ratio

Expand new area for connectivity

and accessibility

New technology / transportation

approach (mini LNG,
onshore/offshore transportation)

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PT. Perusahaan Gas Negara Tbk.
The Manhattan Square - Jl. TB Simatupang Kav. 1S
Jakarta Selatan 12540 Indonesia
contact.center@pgn.co.id
www.pgn.co.id