LNG Supply, Storage and Transportation

March 21, 2013

Malaysia 2013, 19-21 March

2

The presentation is made solely for the purpose of this event and is not intended to be and should

not be used by any other person or entity. The contents may contain copyright and/or legally

privileged information and the reader must therefore not use, copy, disclose or take any action

based on this presentation material or any information herein.

PT Perta Daya Gas, a subsidiary of PT Pertamina Gas and PT PLN (Persero), or by any of their

respective officers, employees or agents will not in any manner whatsoever be deemed or

construed to implicitly or explicitly represent or warrant the accuracy or completeness of the

information or the contents of this presentation material. All consequences and/or liabilities

(including without limitation, those arising from negligence) to other parties for the utilization of the

documents are specifically disclaimed.

Drivers for Small-Scale LNG in Indonesia

Gas Domestic Supply-Demand outlook in Eastern Indonesia

Small-scale LNG Projects in Eastern Indonesia

3

Key Cost Components and

Key Factors For Trading

Model

4

Geographical

• Widely dispersed archipelago

• No extensive gas pipeline network

Political

• Government to increase the portion of gas for domestic use

• Government awareness on the need for using LNG to transport gas

• GoI commit to reduce local pollution and CO2 emissions

Market

• High price of oil based fuel compared with LNG

• Indonesian fuel subsidies are increasingly costly as electricity demand grows

• Need for distributed power generation

Technical

• Proven technical feasibility

• Important infrastructure and facilities such as West Java FSRU that already in operation

5 Source: Indonesia Gas and Power Market Outlook – WoodMackenzie April 2012 (adjusted)

With an average GDP forecast growth rate of 5.2% over the next decade, Indonesia is positioned to expand its energy demand rapidly.

Domestic economic and energy demand growth create the opportunity to develop domestic gas and LNG business

0

2000

4000

6000

8000

10000

12000

14000

16000

2011 2016 2021 2026 2031

Contracted (Export)

Yet to Find

Uncontracted

Contracted (Domestic)

Demand

Demand increase 6%

Demand increase 8%

Electricity absorbs more than 50% of overall domestic gas demand with 6-8% CAGR

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2011 2016 2021 2026 2031

mm

scfd

INDONESIA POWER GAS DEMAND

8% demand

increase p.a

6% demand

increase p.a

Indonesia Gas Supply – Existing and Potential

Increased deployment of small scale LNG in Indonesia will enhance National Energy Sustainability and reduce government diesel subsidies

In Eastern Indonesia, the cost of electricity

generation is relatively high due to the extensive

usage of diesel fuel

PLN Sales Revenue(*)

vs Cost(**) of Supply

2005

PLN (State Electricity Enterprise) to convert diesel fuel to gas fuel in effort to reduce fuel cost for power plant in Eastern Indonesia with potential cost saving of approximately US$ 5,400 million per year.

Small scale LNG come up as the potential options for transporting natural gas to remote gas receiving destinations.

Small scale LNG concept can become an effective gas supply solution for the scattered islands of Eastern Indonesia, where the other transportation modes are not economically viable.

*Revenue includes electricity sales revenue, and subsidy, consumer connection fee and other operating revenue

**Cost consists of fuel, power purchase, personnel, depreciation and other operating expenses 6

7

Note:

: Demand Points

: Supply Points

Unlike in Java and Sumatra, construction of extensive gas transmission pipelines in Eastern Indonesia is not feasible as the relatively low gas demand does not justify the high capital investment costs.

Gas pipeline networks are not well established in Eastern Indonesia. LNG is the most strategic solution to balance the supply-demand gap in respect to geographical condition and distance between gas supply to demand points in Indonesia.

Due to marginal demand in the range of 3 to 30 MMSCFD in the eastern region of Indonesia, small scale LNG transportation & receiving terminal is the most suited and efficient way for gas distribution.

Pesanggaran

Maros

Pontianak

Pomalaa

Halmahera Bontang

Donggi Senoro Salawati

Small Scale LNG for Eastern Indonesia Location : Maros, Batakan, Tanjung Batu,

Halmahera, Pomala, Pesanggaran

Pontianak, Kupang

Total Capacity : ±1 MTPA

Main Consumer : PLN & ANTAM’s Power Plant

Project Owner : PT Perta Daya Gas

COD : Q3 2014 – 2016

Tanjung Batu

Batakan

30 mmscfd

3 mmscfd

20 mmscfd

10 mmscfd

25 mmscfd

Kupang

16 mmscfd

Supply

Demand Capacity

PT Perta Daya Gas, the joint venture company between PT Pertamina Gas (65%) and PT Indonesia Power (35%), will build a mini liquefied natural gas (LNG) receiver and transport terminal in Indonesia’s eastern region. The mini LNG terminal will support the gas distribution infrastructure for PLN’s power plants in the eastern region of Indonesia.

8

FSRU Jateng

9

10

MAKASSAR

SENGKANG

PESANGGARAN

BATAKAN

LNG SOURCE

LNG TERMINAL

SIMENGGARIS

LIKUPANG

TANJUNG BATU

BONTANG

POMALAA

LNG SOURCE AND RECEIVING TERMINAL

Supply – Demand Gas Balance

Preliminary Economics of Gas/LNG Distribution System from

Simenggaris to PLN Power Plant

Upstream

Mini LNG

Shipment

LNG Rec.Terminal

Power Plant

Power

Plant

11

12

Small scale LNG concept is to reach “stranded” LNG markets, which means too far from existing pipeline system, not economically feasible for pipeline extension or new pipeline construction.

Demand volume, geographical profile, and existing infrastructures are the main considerations to choose the right match technologies.

13

End User Power Plant

Coastal Ship LNG Terminal

LNG Satellite Terminal

Container Terminal

Liquefaction Plant

1

2

3

4

5

LNG Trucking

14

The key cost drives in the implementation of a small scale LNG project are:

- Jetty and load/discharge requirements

- Selected shipping solution

- Port storage tank requirements and their capacity

- Re-gas plant and equipment

- End user requirements

- Fiscal regime

15

Key Cost Components

Additional elements to evaluate :

How selected solution fits into long-term regional requirements

Requirements of end user :

- Security of supply/interruptable supply

- Seasonality/supply variations

- Regularity and redundancy

16

LNG Shipping Solution

Gas demand profile and seasonality

Trading distances

Optimal size/number/speed of vessels required

Load/Discharge operations and time

Voyage route analysis and weather limitations

Vessel utilization profile

Back-up

17

Key factors for trading model

18

The Indonesian Government is keen to reduce the country’s dependency on expensive oil and to encourage the use of clean-burning natural gas, a resource more readily available domestically

Small scale LNG is an option for supplying growing energy demand in Eastern

Indonesia that will generate multiplier effect to the national economy Through the development of several small scale LNG projects, Indonesia is

entering into a complete LNG chain portfolio, in terms of facilities and size. A closer stage to reach gas supply – demand balance and to boost national energy sustainability

Thank You