C.

Commercial

2.1 Gas Procurement

Executive Summary
In 2017, sources of gas supply to DSLNG come from Senoro Field of JOB PMTS and Donggi
Field of PT Pertamina EP (“PEP”) until end of April 2017. The feed gas introduced from
Matindok Field of PEP, was started its supply on April 17th, 2017 ramping up to
approximately 35 MMSCFD. Since July 2017, the total feed gas received by DSLNG from
the upstream parties (Senoro Field, Matindok Field and Donggi Field) has reached an average
of 355 MMSCFD.

i. Natural gas off take from Upstream

B.
2017 Feed Gas Offtake Cumulative Feed Gas Offtake

Remaining JOB PMTS TCQ : 1020.8565 Tbtu

Remaining PT Pertamina EP TCQ : 390.2773 Tbtu

Feed Gas Off-Take Status:

DSLNG received first gas supply from Matindok field of PEP on 17 April 2017, in which
previously supply from PEP was only from Donggi field. With Donggi and Matindok fields
already producing, all upstream gas supply and facilities development to DSLNG have been
completed. The flow rate from PEP achieved DCQ level of 85 mmscfd in mid-2017. PEP
currently is still continuing with some works to completely finish the Matindok Gas
Development Project (MGDP). Since Donggi and Matindok fields were actually supposed to
be put in production since 2015, therefore there is issue regarding Start Date and Shortfall that
need to be resolved. On August and November 2017, DSLNG and PEP had met, currently
DSLNG and PEP are still working on follow-up action of Start Date and Shortfall issue, i.e. to
reconcile PEP daily gas sales from day one.

While gas supply from JOB Tomori was started in 2015 and since then it has been in stable
operation. JOB Tomori is further developing its facilities for other GSA with different gas
Buyer such as with petrochemical plant of PT Panca Amara Utama, however JOB Tomori has
ensured it would not affect its obligation under the GSA with DSLNG.

GSA Second Amendment

Discussions on second amendments to the GSA between DSLNG and Senoro Parties have been
started since 2015. However, the discussion is still ongoing due to the Parties are trying to incorporate

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several issues under the GSA such as new payment security mechanism, shortfall gas allocation and
also plan of price review discussion. The Parties agreed to continue discussion on second amendment
to the GSA in 2018.

2.2. LNG Sales and Marketing

JCC-Brent Trend Naphta

Key milestones for LNG Sales and Marketing in 2017 are as follows:
1. DSLNG managed to deliver to all long-term buyers and also to the spot cargo buyers in a
total quantity around 2.2mtpa for 2017.
2. DSLNG cargo was delivered to Taiwan (Yung-An terminal) for the first time, on 8 July 17
with a charter vessel (Excel).
3. DSLNG and its long-term LNG Buyers have agreed the Annual Delivery Program for
Contract Year 2018 on 1 December 2017.
4. In terms of excess cargoes, DSLNG sold as much as 5 cargoes to the international market.
5. DSLNG had successfully chartered spot vessel for 5 deliveries to our buyers.

a. Sales Activities

Herein below are the details for sales activities throughout 2017.

Deliveries of ADP 2017 Cargoes

DSLNG had started the year of 2017 by loaded its 1st ADP 2017 cargo for KOGAS shipment
successfully on 6 January 2017. This cargo was loaded on Hyundai Utopia vessel. Continue
on 12 January 2017, DSLNG successfully delivered 1st ADP 2017 for JERA diversion cargo
to Tobata loaded on LNG Maleo. And continue on 24 January 2017, DSLNG successfully
delivered the 1st ADP 2017 cargo for QE to Tobata using spot chartered LNG vessel EXCEL.

Hyundai Utopia first time arrived to Yokkaichi terminals on 12 April 2017 and the ceremony
of commemoration exchanging gifts was held in Ship’s bridge right after the opening CTM.
By the end of April, Hyundai Utopia first called delivery to Kawagoe terminal. The
exchanging gift between Ship and Shore was shortly held in Ship’s CCR during cool-down
operation on 30 April 2017.

Apart from previous first delivery from DSLNG’s ship, SK Splendor also first call at DSLNG
Terminal to conduct loading for KOGAS cargo on 8 May 2017. SK Splendor was a substitute
vessel during Hyundai Utopia dry docking. On the other hand, LNG Maleo berthed at Yanai
terminal on 25 May 2017 for JERA diversion cargo after the terminal confirmed the
compatibility and new optimoor study for LNG Maleo.

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On November 2017, DSLNG delivered Cargo for JERA with Hyundai Utopia diverted to
Dalian Terminal, China for the first time.

Finally DSLNG successfully delivered 36 committed cargoes.

Deliveries of SPOT Cargoes 2017

March was the beginning of DSLNG to load the 1st SPOT FOB cargo for PPT Energy
Trading using LNG Vessel Tangguh Foja at DSLNG Terminal on 27 March 2017. Tangguh
Foja LNG was first time calling to DSLNG terminal and vetting inspection was conducted
prior her arrival.

Spot chartered LNG vessel EXCEL berthed in Yung An terminal (Taiwan) for the first time
delivered for Shell SPOT cargo on 8 July 2017. Another SPOT cargo on July with LNG
Vessel Nizwa LNG at DSLNG Terminal for her first call on 25 July 2017. DSLNG loaded the
3rd SPOT FOB cargo for PPT Energy Trading.

On 29 August 2017, first call of LNG Vessel Seri Bijaksana LNG at DSLNG Terminal.
DSLNG loaded the 4th SPOT FOB cargo for PPT Energy Trading.

On 11 October 2017 DSLNG delivered LNG with LNG Maleo for the first time to Tokyo Gas
at Sodegaura terminal. This is the 5th SPOT DES Cargo.

DSLNG successfully delivered 6 SPOT cargoes.

Correlation Test

On 12-13 July 2017, the Correlation test between DSLNG and Higashi Ohgishima at TEPCO
LNG Terminal Laboratory and also DSLNG and Futtsu LNG Terminal Laboratory has been
conducted successfully. On 14 July 2017, the final test result analysis of two LNG terminals
has been issued and the results are within the range.

On 1st December 2017, DSLNG visit Tongyeong terminal and conducted correlation test. The
test was in the acceptable range and both DSLNG and KOGAS are satisfied with the result of
Correlation Test.

ADP 2018 and CTM Contract Extension with PPT Energy Trading

Starting 31 July until 2 August 2017, DSLNG conducted kick-off meeting ADP 2018 with the
Buyers. Also early in August, PPT (Seller’s Representative) visited DSLNG office to discuss
regarding extension on CTM Agreement. And then two days after that, DSLNG sent the
Notice of the Anticipated Quantities and Scheduled Maintenance Inspection Downtime to be
available for CY2018 to JERA, KOGAS, and QE.

Throughout September 2017, DSLNG had intense discussion regarding ADP 2018 with the
Buyers and extension on CTM Agreement with PPT

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On 6 October 2017, DSLNG and PPT agreed on the draft of extension on CTM Agreement. .
On 11 December 2017, DSLNG and PPT signed the extension on the CTM Agreement.

DSLNG and all ADP buyers signed the ADP 2018 on 1 December 2017 as per SPA
implementation.

b. Marketing Activities

Herein below are the details for marketing activities throughout 2017 as classified by month:

January:
During January 2017, DSLNG discuss with several potential buyers to market several spot
cargoes (especially on non-demand season) in 2017 by strip basis.

February:
˗ On 7-Feb, DSLNG attend Indogas 2017 Conference at Jakarta and met several potential
buyers.
˗ On 17-Feb, DSLNG received charter requirements from Brunei LNG to charter out a
vessel to Brunei LNG. DSLNG decided not to participate, due to sudden internal
restrictions.
˗ On 22-Feb, DSLNG and PPT signed the Confirmation Memorandum at PPT’s Singapore
office for strip-sales of March and July 2017 cargoes.
˗ On 24 and 27-Feb, representatives from Origin and Centrica visited DSLNG office for the
first time to seek further business opportunities.

March:
˗ On 7-Mar, Marubeni visited DSLNG office for the first time to discuss about the potential
of the remaining spot cargoes sales in 2017.
˗ On 14-Mar, DSLNG executed the extension for chartering Excel, a spot charter vessel, to
load and deliver the cargo in Q2 2017.
˗ On 24-Mar, Chevron visited DSLNG office to discuss about potential business opportunity
of spot cargo optimization between the companies in the future.

April:
˗ During April 2017, DSLNG had discussed with several domestic buyers about the
possibility to sell spot cargoes in 2H 2017. This is including PGN LNG, PLN and
Nusantara Regas.
˗ On 4-7-Apr, DSLNG attended the Gastech Exhibition and Conference 2017 in Tokyo and
DSLNG had some meetings with existing buyers as well as potential buyers to discuss
about the opportunity to market remaining spot cargoes in 2017.

July:
On 6-Jul, Shizuoka Gas visited DSLNG office to further discuss about the opportunity to take
DSLNG spot cargoes in the future.

September:
On 29-Sep, DSLNG met PGN LNG to discuss about their interest for spot cargo in
November.

October:

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 On 4-Oct, DSLNG met several potential buyers in Singapore to discuss potential spot cargoes
sales in remaining 2017.

November:
On 7-Nov, DSLNG held Signing Ceremony of JKM Option Scheme Agreement with DGI and
PPT in Jakarta.

2.3. Condensate Sales

Smooth condensate off taking operation with the existing Buyer i.e. Consortium Titis Sampurna
and Surya Mandala Sakti. Condensate Sales Team also started working on preparation for
developing the next condensate sales and purchase concept and marketing strategy, as well as
communicating with condensate potential Buyers for the new contract term since the existing
Condensate Sales and Purchase Agreement (CSPA) will expire in August 2108.

2.4. Shipping and Marine

DSLNG used its long term chartered Vessel, LNG Maleo and Hyundai Utopia, to deliver the
LNG to the buyers JERA CO., Inc and Kysuhu Electrical Power CO. Inc.

Herein below are the details for shipping and marine activities throughout 2017 as classified by
month:

a. Loading and Shipping

DSLNG conducted ship-shore compatibility study in order to deliver cargoes during 2017.
Following the schedule of the cargo delivered.
a.            LNG Excel first calling to Tobata Terminal on 23-24 January 2017
b.            Hyundai Utopia first calling to Dalian Terminal on 28 – 29 November 2017 and first
calling to Higashi-Ohgishima on 30-31 December 2017

The vessels were compatible with those terminals and the discharging operation run smoothly
without any problem.

The vetting inspected was conducted for four new LNG/C vessels there are Tangguh Foja, SK
Splendor, Nizwa LNG and SERI Bijaksana and major findings were no found during
inspection and these LNG/C was successfully loading in our terminal.

On 07 – 26 May 2017 Hyundai Utopia conducted periodical dry dock at Orient Shipyard
Gwangyang, South Korea in order to maintain the Vessel Performance in Good condition.
During dry docking, Hyundai Utopia conducted recalibration of CTMS (Custody Transfer
Measuring System) by independent surveyor and witnessing by government official
from Directorate Metrology, Ministry of Trade and Directorate General Oil and Gas, Ministry
of Energy and Mineral Resources in order to get Approval for Usage of Measuring System.

On 15 August 2017 the Amendment to Cooperation Agreement between PT. Donggi Senoro
LNG and PT Pelabuhan Indonesia IV (Persero) in Makasar regarding Towage and Pilotage
service within the working area of Port Operation Unit Class III in Luwuk already extended in
2 years.

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b. Marine and Supporting Others

All Tug boat, Pilot Boat and Mooring Boat in normal operation in 2017

January
On 16 January 2017, LNG Excel during berthing at DSLNG Site. A leak occurred on vapor
arm SDP flange while conducting nitrogen pressure test. The vessel was using serrated SDP
flange instead using the flat SDP. A slight delay on LNG cargo loading operation. DSLNG
will further review and improve ship-shore compatibility preparation to avoid similar
occurrence in the future.

February
LNG Excel vessel delayed the ETA Futtsu from 10 Feb to 11 Feb due to bad weather.

LNG Maleo vessel delayed the ETA Joetsu from 19 Feb to 20 Feb due to rough sea condition
passing off Mindanao Strait. Furthermore, the berthing schedule at Joetsu Terminal was
postponed twice from 20 Feb to 21 Feb then to 22 Feb, consecutively, as result of the
continuous terminal bad weather. The vessel berthed safely on 22 Feb.

April
One of tug boat was assigned as duty boat watch for 24-hours on Eastern Outer Buoy to
ensure no trespassing into DSLNG harbor water area as governs by the regulation.
On 20 April 2017, DSLNG had a meeting with KOGAS to discuss the dry docking and
informed that DSLNG cannot accommodate the Hyundai Utopia arrival deferment after dry
docking completion as it creates high inventory situation later than initial schedule informed
in December 2016. Hyundai Utopia needs time to conduct cool down and gassing up after
arrival to Luwuk.

May
Coordination meeting between DSLNG and PAU in relation with issue of DSLNG
DLKr/DLKp permit that overlap with PAU on 8 May 2017. DSLNG held a meeting with
DGST at Head Office of Ministry of Transportation on 15 May 2017 to report the actual
issues with facts findings and concerns related to DSLNG DLKr/DLKp water area.

On 27 May, Hyundai Utopia completed dry docking and continued to berth at Luwuk for
Gassing Up and Cool Down operations.

June
On 19 June, DSLNG sent the 1st Notice of Redelivery of the LNG vessel Excel to Exmar at
pilot boarding station outbound at Yung An, Taiwan.

July
Spot charter vessel “Excel” was redelivered to owners (Exmar) on 8 Jul at Yung-An (Taiwan).

August
Signing Ceremony on 15 August 2017 for Amendment to Cooperation Agreement between
PT DSLNG and PT Pelabuhan Indonesia (Persero) on Pilotage and Towage services within
the working area of Class III Port Operator unit Office in Luwuk.

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September
A joint survey was conducted on 7-8 September with PAU, District Navigation of Bitung and
Luwuk Port Authority. New coordinate for buoy location has been determined and agreed
among parties.

October
Completed Underwater inspection in lieu of dry docking for Mooring boat CUPI and COBIA
without any safety issue, UWILD is required to ensure the structural and operational integrity
of a marine ship throughout its operational life span. This kind of survey saves both time and
money by reducing downtime, limiting time off-contract, and reducing or eliminating the
need for expensive and limited dry-docking. Fulfill terminal ISPS code compliances for PFSO
and completed Standard Operating procedure (PROTAP) for DSLNG and PAU Terminal.

November
Completed 2nd verification terminal compliances to the ISPS code with 4 minor findings.
Completed training for marine personnel to fulfill ISPS code compliances.

December
Closed out 2 minor findings of 2nd verification terminal compliances to the ISPS.
Completed preparation of redeployment No.3 and 5 buoy included SOP and risk assessment.