INDONE IA CA E ON UTILIZING CNG FOR INDU TRIE AND INDU TRIAL E TATE

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1 INDONE IA CA E ON UTILIZING CNG FOR INDU TRIE AND INDU TRIAL E TATE 1st MYANMAR CNG FOR TRANSPORT, INDUSTRY, AND POWER FORUM 2014 Robbi R. Sukardi, MBA Chairman For the Association of CNG Indonesia Companies

2 CONTENTS CNG DEVELOPMENTS IN INDONESIA: CNG for Natural Gas Vehicle (NGV) CNG as a Virtual Pipeline Purpose CNG for Power Supply Storage CNG to Ship Natural Gas s Forward

INDONESIA NGV CHALLENGES New source (onshore vs.

Pricing Indonesia as an archipelago and mountainous terrain condition Economic of

supply has been committed for the Transportation sector.

slow fill) Location of the station Power supply availability Gas contract terms &

for oil lifting, fertilizer, electricity, and strategic industrial) Energy Mix

No-Subsidy Government Policy / Political Will Pricing Policy A Emergency Response

the government C-kits must be wide spread available C-kit seller and bank/leasing

warrantee Vehicle manufacturers must be able to sell NGV at lower or at least at

as a major factor Sale price currency Units sale methods Escalation price policy

demand side One regulatory body that specific manage, control, and monitor the NGV

3 INDONESIA NGV CHALLENGES New source (onshore vs. Off shore) Economics of scale size of the well Well head gas characteristics Pricing Indonesia as an archipelago and mountainous terrain condition Economic of scale of the volume gas & location Price & term conditions In 2012, 30,5 mmscfd gas supply has been committed for the Transportation sector. Gas Characteristics (pressure & quality) Compression ability (fast vs. slow fill) Location of the station Power supply availability Gas contract terms & pricing On-line or Daughter system Availability of un-committed (uncontracted) gas source Prioritizing allocation of gas (i.e. for oil lifting, fertilizer, electricity, and strategic industrial) Energy Mix policy & strategy CNG mandatory vs alternative fuel Environmental reason Subsidy or No-Subsidy Government Policy / Political Will Pricing Policy A Emergency Response Team body should be establish Gas quality must be continuous monitor and report to the government C-kits must be wide spread available C-kit seller and bank/leasing as well insurance company must coordinate together Tax incentives Car manufacturers warrantee Vehicle manufacturers must be able to sell NGV at lower or at least at the same price with petrol run vehicles Price deviation between CNG and petrol fuel as a major factor Sale price currency Units sale methods Escalation price policy Taxes policy Regulation that will induce and provide benefit to the supply and demand side One regulatory body that specific manage, control, and monitor the NGV development Gas contract should be simple People are used to using petrol People thinks that CNG is not safe CNG Station must be widely available due to limited gas tank size that can be carried People are worried that CNG will damage the vehicle engine Massive and continuous NGV campaign is costly

4 INDONE IA NGV OPPORTUNITIE + 13 million automobile vehicles with 10% annual growth sale + 83 million kilo liters annual fuel consumption + 60 % of the annual consumption consumed subsidized fuel

5 CNG AS A VIRTUAL PIPELINE PURPOSE

6 UPSTREAM THE VIRTUAL PIPELINE CHAIN + $6/mmbtu LNG $8 - $14/mmbtu MIDSTREAM $2 -$4/mmbtu DOWNSTREAM $2 -$ 4/mmbtu Shopping Mall Electric Generators $ 2- $4/mmbtu Apartments CNG as another means of gas transportation aside from conventional pipeline and LNG

energy consumption rate per month, days, and hourly per cubic meters.

The traffic and road condition to the industrial customer from the CNG Mother Station.

Cascade Storage and Pressure Reduction System must be tailored made toward the

investment or a too highly operating cost.

7 VIRTUAL PIPELINE KEY CONSIDERATIONS 1. Understand the Industrial Gas Requirements: Minimum quality of the gas acceptable Gas energy consumption rate per month, days, and hourly per cubic meters. The distance between the industrial customer to the CNG Mother Station. The traffic and road condition to the industrial customer from the CNG Mother Station. 2. Tailor made the CNG Equipment toward the Industrial Gas Requirements The CNG Cascade Storage and Pressure Reduction System must be tailored made toward the Industrial need and specific surrounding area to avoid miscalculation of an over investment or a too highly operating cost. Kilometers distance and ease of traffic Compression Capacity Filling Time CNG Consume Time Flow & Pressure Requirement interval [?] time [?] filling per day MOTHER STATION CNG CASCADE FILLING CNG CASCADE DOWNLOAD CUSTOMERS

8 VIRTUAL PIPELINE FOR INDUSTRIALS

9 CNG FOR NGV & AS THE VIRTUAL PIPELINE

10 CNG STATION ECONOMIC OF SCALE : Estimate Cost of Running Your Stations $0.50 Target Sale Price at Mother Stations $0.45 $0.40 $0.35 $0.30 current average pipeline average cost $0.25 $0.20 $0.15 $0.10 $0.05 $- With CNG bulk sale selling can reach your economies of scale of the CNG Station

PRICE KEROSENE Liter 8,840 $33/mmbtu DIESEL FUEL Liter 9,063 $29/mmbtu GASOLINE Liter 9,270 $28/mmbtu

11 CNG DEVELOPMENT IN INDONESIA INTRODUCTION GROWING MATURE DIMINSIHING LPG COAL OIL DOMESTIC SALES PIPE GAS CNG FUEL LNG UNIT + KCAL/UNIT AVG. PRICE KEROSENE Liter 8,840 $33/mmbtu DIESEL FUEL Liter 9,063 $29/mmbtu GASOLINE Liter 9,270 $28/mmbtu COAL ton 6,000 $4/mmbtu LPG Kg 11,200 $25/mmbtu LNG m3 10,000 $14/mmbtu NATURAL GAS (NG) m3 9,000 $10/mmbtu CNG (FOB Station) m3 8,800 $14/mmbtu CNG (CIF Factory) m3 8,800 $17/mmbtu

12 THE VIRTUAL PIPELINE INDUSTRY CNG STATION AREA OF OPERATION GO GREEN

13 DELIVERING CNG FOR INDUSTRIAL NEEDS

14 CNG FOR POWER SUPPLY GAS STORAGE

15 CNG FOR POWER SUPPLY GAS STORAGE Electricity Usage GO GREEN Feed gas CNG feed Storage Volume

16 CNG FOR SHIPPING NATURAL GAS

17 CNG FOR SHIPPING NATURAL GAS Due to archipelago country and scattered marginal small demand within 2 to 5 MMSCFD, CNG is the most suited and efficient way to apply milk run of gas distribution in which trucking, and bargecontainerized CNG can be option to transport the gas.

18 CNG FOR SHIPPING NATURAL GAS CNG Marine by Type of Vesel Larger Volume and Long distance** Small Volume and Short Distance Coselle (Coil in Carausel) Votrans (Volume Optimized Transportation & Storage Barge Mounted (T&B) (will using Tug Boat for sailing) Self Propeler Barge (SPB) Landing Craft Transport (LCT) ** not available in the world, ship owner will build based on request and long term time charter

19 CNG FOR SHIPPING NATURAL GAS Using Coselle or Votrans type in this time being will be facing problem due to the un available CNG Receiving terminal for discharge the cargo besides very costly in investment. Cabotage Law (Should be Indonesia Flag for Domestic Shipping based on Indonesia Law) Tug & Barge, not recommended for this time being, because of Notation Class of Tug & Barge, for Dry Bulk not for shipment CNG ISO Tank. Tug & Barge, not allow for shipment CNG ISO tank because there is no Safety Protocol yet for shipment Dangerous Goods with Tug & Barge. Self Propeler Barge (SPB), will be costly, because time charter rate in the market higher than T&B also LCT. Current Solution: Using LCT is the best solution to shipment CNG ISO Tank, but the tank should be on trailler as mandatory regulation in maritime for LCT. No need state of the art or receiving terminal or special port, LCT can berthing as long as the port allow for open the LCT ramp door and manuveuring truck for load & un load the cargo Available in Indonesia and most of O&G offshore activity utilize this type of vesel, therefore fast track to mobilize.

20 CNG FOR SHIPPING NATURAL GAS Small Size: Can be shipment maximum ±7 unit of CNG ISO Tank (Tube Skid) with 40ft size include the traller Large Size: Can be shipment maximum ±22 unit of CNG ISO Tank (Tube Skid) with 40ft size include the trailler Sample of Stowage Plan for ±7 CNG Container s

should be in 2000 mmbtu per shipment to get the suitable cost per mmbtu for shipping

21 CNG FOR SHIPPING NATURAL GAS LCT time charter rate in the Indonesia market will not linier, the rate will hyperbolic Therefore, the suggestion of minimum volume of CNG should be in 2000 mmbtu per shipment to get the suitable cost per mmbtu for shipping (USD 3.5 USD 4.5 per mmbtu, depend on the nautical miles distances) Fix-Var Shipment Cost Chart

22 Asosiasi Perusahaan CNG Indonesia (APCNGI) THANK YOU website: THANK YOU

23 APCNGI 2014 MEMBERS

EFFECTIVE CNG HANDLING & LOGISTICS FOR INDUSTRIES (AN INDONESIAN CASE STUDY)

EFFECTIVE CNG HANDLING & LOGISTICS FOR INDUSTRIES (AN INDONESIAN CASE STUDY) Presented by Robbi R. Sukardi, Secretary General APCNGI Ho Chi Minh, Vietnam, 01-03 August 2012 Background behind the growth