1.

3 Overview of Gas pipeline infrastructure Business in the World

Below are developments of Gas Pipeline infrastructure on several countries that
can be used as references for Indonesian Gas pipeline further development.

1.3.1 United State of America (USA)

USA has more than 800 Natural Gas producers, 580 Gas Refineries, 160 Gas
Transmission pipeline Companies that operate more than 450.000 KM Gas
transmission pipeline, 114 Gas/LNG storage companies that operate more than
400 LNG storages, 260 gas traders, and more than 1.200 Gas distribution
companies that operate more than 1.3 Mio KM gas distribution pipeline which is
considered as the most efficient and advance country on this natural gas business.

Before deregulation and applying ‘unbundling pipeline’, Gas business in USA is

using a simple structure but very rigid and not flexible on gas distribution and
transaction.
The structure is consisted of Gas producers, interstate gas pipeline, Local
Distribution company/LDC, and End User.
Deregulation on the wellhead gas price, and off take warranty to the transmission
and distribution gas pipeline company is not automatically creating price
competitiveness at the end users, in fact this system, creating gas shortage in year
1970s, and gas over supply in year 1980s.
Now, USA Gas business has changed drastically. More open for competition and
more options. Gas well head price is not regulated anymore; it is depending on
supply and demand. Interstate pipelines is no longer the owner of the natural gas,
but only the gas pipeline owner, who give gas transport services with a certain
tariff/toll fee that regulated by a committee (FERC – Federal Energy Regulatory
Committee). Now the end user can purchase the natural gas directly from the Gas
producer, or Local Distribution Company/LDC, or from the marketer/gas trader.
The LDC still open for bundling transaction to the end user. The unbundling gas
retailer is always getting permission to use the pipeline networks to transport their
gas. Number of gas marketer/gas marketing agent is increasing significant and
become a new business in USA to facilitate all required gas transaction and its
services..

1.3.2 United Kingdom (UK)

UK has 5.900 KM national gas transmission pipeline high pressure category,

12.500 KM regional gas transmission pipeline medium pressure category,
232.000 KM local gas distribution pipeline and 7 (seven) Gas/LNG storage that is
connected to the national gas transmission pipeline.
Deregulation gas business in UK give competition opportunities of the gas supply
to a big/medium size end buyers and at the same time its support growth of the
gas producers/supplier as well as the independent gas trading.
Similar like USA, after deregulation, UK having incremental of domestic gas

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consumption and gas price reduction. Gas business in UK, has been transformed
from vertically integrated gas business to non-integrated at all.
GSPA-Gas sales purchase agreement in UK has also been changed from long
term contract basis to mid-term and short-term basis, even to spot contract. Now,
UK is also using unbundling pipeline in their gas business.

1.3.3 Spanyol

Gas Naturale (now Naturgy sa) originally is a government owned Gas services
company, now had been privatized and becoming a global gas and energy
company serving 28 countries around the world.

1.3.4 Japan

Integrated transmission and distribution gas pipeline in Japan has not been
developed yet. Distribution gas in Japan more depends on Import LNG and
industries development around LNG Receiving Terminal.

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