An Executive Interview     Dharmawan Samsu:                            harmawan Samsu, or Dhar in short, is               ...
ProfileDhar graduated from the Physics Department      Finishing my undergraduate degree, I chose         the field but nee...
Profileto step up and present my decision on a more      There is no successful project that resultscomprehensive matter t...
ProfileFor some people, choices were made for             You were, and have been, very active              government, lo...
ProfileRatio by encouraging the industry to do more     for local electricity power generation in Papua    Community Relat...
Profileand distribution to local communities. From       the region. The need for energy will increase,   How much the com...
LNG FSRU Pioneer                                           Nusantara Regas:                                    Pioneering ...
LNG FSRU Pioneer                                                                                                          ...
Deep Water Gas Development                      Delving into the Novelty of the Masela                        Abadi FLNG P...
Deep Water Gas Development                                                                                               t...
Technology Corner                      Marginal Gas Development with                       Compact Motor-driven LNG       ...
Technology Corner                                                                                                       al...
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PETROLEUM & MANAGEMENT PROGRAMS                        FOR FEBRUARY - MAY, 2013• Understanding The PSC Concept            ...
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  1. 1. An Executive Interview Dharmawan Samsu: harmawan Samsu, or Dhar in short, is everything a successful leader should be. Claiming to be an introvert in an extroverted world, Dhar is in fact a very warm person, always the first one to greet others and throw a smile. We met him in the middle of his very busy schedule.
  2. 2. ProfileDhar graduated from the Physics Department Finishing my undergraduate degree, I chose the field but needed to certify it and develop itof the University of Indonesia in 1989. He seismic interpretation in East Java basin as an LNG project. We were ready to certifymade up his mind for a career in oil and gas as my final thesis. It was a struggle coming Vorwata with D&M and LAPI ITB, and defineupon his bachelor thesis on East Java basin from a Physics background and then learning the commerciality for an LNG business, whenseismic interpretation. He then started his about geophysics and geology. However, the economic crisis hit in with ARCO as a field geophysicist in I was lucky to have strong mentors early inIndonesia. His work on the Terang Sirasun my career with seasoned professionals such Another milestone came right after that.basin mapping brought him his first US as Suprayitno Munadi, Roberto Fainstein, As the company had promised, followingassignment from 1995-1997. Stephen Scott, and Abdul Kohar from his the completion of that stage, ARCO sent early days in ARCO. The passion started me back to an overseas assignment, asHe came back shortly to Indonesia, where there. they promised. I was put in a New Venturehe played a key role in the discovery and Exploration project. This was no longer on-resource appraisal of the Tangguh field, Now, tell us more about you career, and the the-job-training, but a real job where a teambefore returning to the US to work in the milestones in the making of Dharmawan performance depended on my leadershipDeepwater Gulf of Mexico from 1998-2000. Samsu. and performance. As there was no otherAfter the merger between ARCO and BP, Indonesian in the team, it was an opportunityDhar was assigned to the BP North America My first assignment working in the field was to show what an Indonesian can bring toExploration from 2000 – 2003. as a field geophysicist. I had a tremendous the company; I had to compete with local opportunity to map the Terang Sirasun basin colleagues and other expats. Working with aAnother call from Indonesia needing its best in East Java. This assignment helped me project culture and management system that Italents back home took Dhar to a different understand the close integration between was not familiar with, it was the shaping of mychallenge in the East and West Java geology and geophysics, as well as the basics becoming a full explorationist. It was anotherassets, following which he came back to his of engineering and technical presentation. training milestone with the main lesson being:exploration domain as Exploration Manager It was one of the high profile projects at you have to push yourself to prove to othersfor BP Indonesia where he also continued the that time that allowed me the opportunity to that you have the same or higher quality anddevelopment of Tangguh field. Then in late present to the senior management, including capability to contribute.2011, he was chosen to lead BP Indonesia as to the ARCO Vice President worldwide. Itthe Head of Country. was the first big milestone in my geoscience When the merger between ARCO and BP career. happened, BP moved me to the North AmericaBelow is our conversation with Dharmawan Exploration in Houston, to work on the GulfSamsu. Following the success of that discovery, I was of Mexico Deep Water Exploration project. sent to my first overseas assignment in the Houston is the technology headquarters forBefore we talk about your career, can US ARCO headquarter to continue to study BP. This was another change of culture foryou tell us what made you interested in on the direct hydrocarbon indication and 3D me, when BP was also still in the process ofworking in oil and gas in the first place? visualization. But before I completed that a culture change following its recent merger assignment, I was sent back to Indonesia. The with Amoco. BP back then was already theI started my career as a young geophysicist. company needed a geophysicist to assist the melting pot as it is now. And that taught meWhen I graduated from the Physics team that recently made a big initial discovery the importance of cultural sensitivity andDepartment at UI, I had already set my mind in the Weriagar field, Tangguh. It needed diversity while working and completing tasksto have a career in the geoscience field, and not only expertise from other disciplines, together.joining the oil and gas industry. There were but also a capable Indonesian in a team oftwo events that triggered that. During my multinationals to provide balance. It was a Another enlightening moment came whensophomore and third year, I was active in difficult time as it interrupted my family’s life I worked in this project for three years. Myprofessional organizations and associations. in US. This was the early milestone where team leader, who was about to go for anPerhaps because of that, I got invited to an I put my country’s needs above all else. I extended maternity leave, challenged me toSchlumberger event in 1989 that featured came back and got involved directly in the lead the team. It became an arranged test; tomany successful and prominent people in Tangguh project on Vorwata mapping. These allow me to see where I would fit best whilethe oil and gas business. Participating in works formed our current understanding of still under the mentorship of my team leader,that event made me proud and motivated the Vorwata as the backbone and main field as well as an effort to prepare me to take onme. Another event was when I applied for a of Tangguh. bigger roles for the day I return to Indonesia.summer vocation program with Schlumberger, I accepted the challenge. It was not an easyand Kerja Praktek (KP) or Practical Training From then on, my career saw greater six-month challenge, dealing with technicalwith Asamera. I went to field and fell in love integration between the geoscience, and commercial as well as personnelwith the profession ever since. petroleum, and reservoir engineering and management, which I did not expect before. commercial fields. We suspected the size of The assignment provided me the opportunity SPE News . Oct/Nov ‘12 9
  3. 3. Profileto step up and present my decision on a more There is no successful project that resultscomprehensive matter to senior management from a single discipline only. For example,in BP. Through hard teamwork and my we cannot make a successful geophysicalleadership the team delivered a project interpretation if we do not understand geology.recommendation that was well received by When we start drilling a well - particularlythe higher management. I passed the test, complex drilling because the low-hanging fruitand was given a Spot Recognition Award and in the drilling world have almost completelya signed letter from my team leader stating, gone - geoscientists have to be able to advise“You are a Leader!” drilling engineers the properties of the well, such as temperature, pressure prediction,I continued my assignment by learning etc. Later on there will come reservoirProject Commercial courses on leasing, modeling, economics, and many more. Asales, etc. These new skill sets were put in narrow mind will not get through and achievepractice immediately in the two jobs I was success easily without understanding othernext assigned to back in Indonesia; the disciplines. My assignment in West JavaEast Java asset, and later the West Java opened up my mind on the importance of aasset. I was responsible for a team of more fully integrated approach.than 90 people in Offshore North West Java(ONWJ). This assignment provided me real It is imperative that you excel in your maintraining in portfolio management, leadership, discipline first - you need your first field ofcommercialization, people development, and knowledge and expertise to be the anchor.external communication and engagement. I call this getting the depth in your career.Another integration milestone in my career. Integration means that you see how other people and other disciplines interact andAfter that, BP put me back into exploration affect your outcome. I call this embracing theas the Exploration Manager for BP Indonesia, breadth.putting a gear forward, and resurrecting theexploration agenda for BP in Indonesia with Our homework is to educate the youngerfocus on the Indo-Australia margin. We generation to develop the breadth withoutcontinued to expand by assessing other losing focus on the depth; without leaving theopportunities in the southern part of Papua main anchor and main fingerprint. It is veryand Arafura Sea. That was the beginning of important to develop your depth first and thenus going back to exploration. Next we will the breadth, otherwise you will become tooalso conduct exploration within the Tangguh generalist too early in your career.block itself. And this proves that BP isinterested in a long-term presence in Papua From the career progression youand Indonesia. described, your experiences prepared you to become “a chosen one”. Can you shareIn 2011, because of my technical background with us some important lessons from thatand leadership experience, BP trusted me long career?to take over the leadership when Pak NicoKanter decided to leave the company. And I never asked for the job. If you takethat is the progress of my career story so far; any positive challenge passionately andI hope our younger readers can gain some wholeheartedly, it will help you in yourinsights from it. pursuits, whatever they may be.You put strong emphasis on integration It is important that once you find yourseveral times. Can you enlighten us passion, you go deeper into that, and neverfurther? feel satisfied too easily. The sky is the limit. I found in my early career that it is veryYes, indeed. Integration is the key of success. important to find someone you can consultWhen we talk about integration, narrow- with, or mentors. Because sometimes we domindedness has to be removed from our not know what we know. Hence, mentors canminds. help enlighten many things.10 SPE News . Oct/Nov ‘12
  4. 4. ProfileFor some people, choices were made for You were, and have been, very active government, local communities, externalthem. Others may need to choose. There are in professional organizations and parties, partners, and NGOs, depend on theborn-leaders, and there are trained leaders. associations. Does that have any value in quality and speed of our decisions. I alwaysReflecting back on my career, initially my shaping your career? put that in higher priority than my personalchoices were made for me. But after that, leadership was shaped through training. Yes, indeed. The professional organizationsWhen opportunity for a responsibility comes, and associations such as student chapters, However, I can only do that with the supportyou have to grab it, step up to the plate and IATMI, IAGI, SPE, etc. are worth sacrificing of my family. I consider myself a very luckydeliver. This is the school of leadership I and spending time for, as the returns are person to have very understanding wife andbelieve I am in, where leaders are shaped much greater, in particular for a geoscientist daughter. My wife fully supports the pathby assignments, practices, coaching and in the business world. that I chose. I have one daughter, a veryfeedback. This is the real training as there are independent young woman, who is studyingpeople also needing your decision, coaching It does not matter how smart you are as a geology now. They fully understand that myand feedback. You will then need to reflect geoscientist, if no one buys your ideas, your business accountabilities require me to bemore and listen more. work stops there. Volunteering in professional available 24/7. With that full support, I can organizations and societies provide the safest then focus on the work agenda, listen toYou are so passionate about what you are way to practice leadership and develop your people in my team, in Papua, with extensivedoing. What inspires and motivates you? future network, while contributing to a greater amount of travel. It comes back again to good for the profession and the country at the balance. I always make sure that wheneverEveryone must have an ideal in his or her same time. I reflect on what I have become I have time with family, it is the best qualitymind, something that we look upon that today, and the answer perhaps lies in my meaning to our life. The ideal that practice in those organizations that perhapsyou choose will guide you where to go and were reflected in my career path. I was asked about the sacrifices we need tohow. As I chose geoscience as my make to achieve the best of what wepath, I worked hard to be the best can offer. My answer is that we makegeoscientist I can be, to contribute those sacrifices earlier on in our career,more to Indonesia. The other passion with full consciousness, accepting ourI have is sharing knowledge with and path and striving for the best. Beyondteaching the younger generations. that, you have to define the balance that works for you. It is different fromThe meaning of life, for me, is fulfilled person to person. Responsibility takeswhen somebody, directly or indirectly, sacrifice, but when chosen wisely,thanks me or recognizes me as with all things considered, you can doa source of his or her knowledge it wholeheartedly.advancement. A simple thanks from a student What is your definition and recipe forwhen I visit the campus motivates me a long success? Now let’s talk about Indonesia’s oil andway. In a greater sense, being part of solution gas. Your footprints are quite substantialto our energy situation in Indonesia also Success to me can come in two ways: when in shaping it. What do you see in thefulfills that sense of ideal. I choose BP as the you are able to develop others, and being future?path of achieving that. recognized for that; and the second is when the business I represent and stakeholders Exploration, exploration, and moreBeing a national in a big international firm is I influence see the mutual achievement. exploration.not easy, in particular when you reach a level Maintaining, developing, and nurturing thewhere responsibility and accountability gets balance is the essence of success. Through organizations and societies like thebigger. I am developing the opinion to myself SPE, we are made aware of the situation ofthat I represent Indonesia to BP and also What about maintaining balance for our industry. Indonesia will still be heavilyrepresent the industry to bigger stakeholders your personal needs as well? Who is dependent on the oil and gas sector in thein Indonesia. The balance is quite important. Dharmawan outside of work? future, as we are right now with more than oneThen the key is to be thoughtful in making third of our State budget coming from it. Thererecommendations and whole heartedly Yes, I do try to maintain a life outside of are two areas of activities in our industry. Firstprovide direction to implement them. When work. However, when you are given bigger is to maintain the base - the old fields fromyou have done your best to maintain that responsibilities and accountabilities, our which most of our current production comebalance, being honest to yourself, then you personal needs will take second place. - through reservoir management, enhancedare more confidence that you have contributed There is a greater cause out there where oil recovery, infill drilling, etc. Second, wein the frame you are in. That motivates me. many people and stakeholders, such as the need to improve our Reserve Replacement SPE News . Oct/Nov ‘12 11
  5. 5. ProfileRatio by encouraging the industry to do more for local electricity power generation in Papua Community Relations, Livelihood, and ICBSexploration work. We need to maintain the Barat province. We are also continuing our (Integrated Community-Based Securitybalance between the increase of exploration social investment there. programme). We are quite pleased with theand the effectiveness of managing the base. results on all fronts. We are never complacent BP’s footprint is quite large now in Papua. and always listen to stakeholders. We alsoI do not think our industry needs more What is the meaning of Papua to BP? have TIAP (Tangguh Independent Advisoryincentives. What needed is to remove Panel), which consists of a US Senatorsthe disincentives. We need more truthful Papua, and Indonesia as a whole, is very and a foremost Papuan leader who providedialogs, where national oil companies important for BP. When we engage local independent feedback to our programs(NOC), international oil companies (IOC), and foreign stakeholders to discuss BP and there.Government, the House of Representatives, Papua, we always maintain that our intentionmedia, and local communities, agree to to invest remains strong, even in the midst of As the program continues, I believe thatstrengthen the support for more exploration. the growing need for domestic gas and the all the learning we have experienced fromWorking in Papua, I am a firm believer of the discussions of fair level pricing. The fact that the past will be strengthened to achieve aneed for stronger collaboration with local BP is still going ahead with the expansion stronger social sustainability, which is the keystakeholders, such as local government and plan demonstrates the importance of this to operational sustainability, whereby the oilsociety. I am also learning that it requires project to BP. and gas activity in Tangguh works in harmonyall parties’ mutual understanding to achieve with the people living around it.the optimal, meaningful, and sustainable Second, it demonstrates that Indonesia issynergy. still a good place to invest, despite outsiders’ There are several excellent scorecards we view that Indonesia becoming more inward can share. One of them is the reduction inI support the view that we are changing the looking. Third, it demonstrates that Papua is the malaria prevalence rate from 24% in 2004paradigm of moving from the west to the still a safe place to work, both for Indonesians to 0.3% at all villages around Tangguh now.east of Indonesia, particularly for the gas and foreign investors. Other achievements include the significantbusiness. In the east, most of the projects improvement in the level of graduation andare gas, hence another paradigm shift from Papua plays an important role for our participation at elementary and secondaryoil to gas. The oil era is indeed coming to an continued presence in Indonesia. We have high schools. Our livelihood program has alsoend. established a stable operational base there. picked up pace. People surrounding Tangguh, We have come a long way since we began which were hunter-gatherers, are now ableCan you talk more about BP? our operation many years ago. We have to supply fresh produce for us to purchase. been producing LNG since 2009, and are Moving forward, we are looking forward toOur history in Indonesia is quite long and finding more reserves to be certified for working together with them to increase theirextensive, either through our heritage Train 3, and continue to pursue for more capacity to prosper beyond Tangguh.companies or through BP now and in the resource for future trains. We are buildingfuture. Our biggest agenda currently is the more businesses on top of that stability. BP When Tangguh Train 3 becomes online indevelopment of a third train at Tangguh, a big is confident to become the partner of choice early 2019, we will provide gas that couldmilestone for us. Total investment from BP for the Government and Papua. generate 50 MW of electricity. We willand partners are up to US$12billion. work with Electricity Company and other And what is the meaning of BP to Papua? stakeholders in the relevant GovernmentWe have also gained some insight on what ministries, as they would be responsible inIndonesia needs when we developed the Let me answer that by continuing from our developing the transmission and distributionblueprint for our expansion. Based on that confidence as the strategic partner for Papua. of that electricity. In the meantime, we havewe voluntarily committed 40% of the gas The confidence comes from our integrated found out that we would be able to secure upproduction from Train 3 for domestic use. social programme. We have six pillars of the to 8 MW of power to be distributed by PLN,We will also provide the gas that will be used programme: Health, Education, Governance, who would need to build the transmission12 SPE News . Oct/Nov ‘12
  6. 6. Profileand distribution to local communities. From the region. The need for energy will increase, How much the competition will dictate thethat 8 MW, some 4 MW will be ready to PLN and gas will be the key part of it. A balance price, or the other way around? That dependsin January 2013. It is a big achievement by between export and domestic use will need on how big the demand in the area will grow.the team that is continuously listening to, and to be achieved. The fair level of pricing for The second factor is how much we, BP andbeing positively challenged by the community, gas will also need to be achieved through Indonesia, can capitalize on our currentto do better. Business-to-Business talks and support from exploration boost. The flawlessness of the Government. Tangguh expansion’s Train 3 and beyond willHow is the role of women in BP? become critical factor. We all acknowledge that Indonesia is a pioneerBP is a fully diversified and inclusive for LNG in Asia Pacific. We have the biggest Last question; how do you preventorganization. The equal right opportunity for opportunity to maintain that role through long yourself from getting stressed out?all is high in our agenda. I happen to also be historical relationship, provided that we canthe sponsor for BPWIN, BP’s global network respond quickly to market changes. Other I do my hobbies. Cycling is one of them. I amof professional women working in BP. Our competitive advantage of Indonesian LNG is also active in professional organizations andindustry is still a male-dominated one, but the proximity to the target markets. societies. I encourage our young professionalsrole of women is equally important. to have those kinds of activities. Also, do not For Tangguh, the key to come ahead of the forget to have quality life with your family.With regional and world dynamics, many competition is by progressing timely andLNG producers including US, Australia, flawlessly. That includes obtaining all the Always think of what you have done andMiddle East, Indonesia, will compete for necessary permits and approvals to enable achieved today, before entering the nextthe same market, namely Asia Pacific. How BP to start front-end engineering and design challenges tomorrow. Do it every single you see the competition? How do you (FEED) in early 2013 and final investmentsee the domestic market outlook in gas? decision (FID) before the 2014 elections, to be on-stream ahead of the 2018-2019In domestic market, demand will still be gas commissioning timeframe. It is still verygrowing fast, as the industrialization growth promising for Tangguh and Indonesia.of Indonesia will remain one of the highest in From left to right: Atria Lesmana, Bambang Istadi, Dharmawan Samsu, Mega and Hasbi Lubis SPE News . Oct/Nov ‘12 13
  7. 7. LNG FSRU Pioneer Nusantara Regas: Pioneering the First LNG FSRU in Asia Pacific By: Hendra Jaya, Nusantara RegasI n the beginning, it was all about subsidy.PLN generates electricity from variousfuelsthat are sub efficient in terms of cost andsource mix. Many power plants were designed National electricity will requires more LNGto burn gas as a cleaner alternative to fuel oil,in anticipation of abundant future domesticgas sources. But domestic gas supply in manycities has not materialized, so PLN continuesto burn oil fuel. This is economic for PLN due tosubsidized fuel prices, but is bad for Indonesiaas a net oil importer since 2004.Oil prices skyrocketed in 2008. This forcedPLN and the Government of Indonesia toquickly act to better manage their fuel mix. SOURCE: PLNChart 1 shows that PLN plan to replace MFOand HSD with cheaper coal and gas (pipedand LNG). The major projects are the Muara recommended, due to uncertainties in land FSRU “Nusantara Regas 1” is a convertedKarang and Tanjung Priok power plants that clearance, and a longer construction period. LNG Carrier from Golar Energy. It was builtsupport the biggest loads in West Java. Chart in 1977, has a capacity of 125,000m3of LNG,2 shows around 400 mmscfd (± 3mtpa) of A sea-based Floating Storage Receiving and can re-gasify 500 mmcfd (~3.8 mtpa)additional gas supply is required to replace Unit (FSRU) was selected. FSRU is proven of gas. It is owned by an Indonesian entity,fuel oil in these two plants. technology that is safe, reliable, easy to setup fliesan Indonesian flag, can be moored onsite and maintain. However, no FSRU exists in for 20 years, and has 40 years of hulllife. TheThe birth of PT Nusantara Regas and the the Asia Pacific region. Indonesia needed to Picture 2 shows the FSRU installation and infirst ever Asia Pacific LNG FSRU pioneer one. operation.PLN chose LNG as available piped gasvolumes were too low. A consortium agreement On 17 May 2010, PT Nusantara Regas (PT NR), Given so many firsts, this was not an easyto build and operate an LNG receiving terminal a joint venture company between Pertamina project to implement. It required strongwas established on 22 April 2008, followed and PGN, was established to develop and run leadership and clear vision. Enter Hendrathree days later by the signing of MOU’s the LNG FSRU to supply PLN power plants Jaya, previously General Manager of JOBfor LNG utilization for the domestic market and other industries in West Java. Picture 1 Pertamina – Medco Tomori, as Presidentbetween Pertamina, PGN and PLN. shows the location of the FSRU relative to the Director of PT NR to work withthe competent Muara Karang power plant. directors and staff already in place.A land-based LNG receiving terminal was not In October 2010, Ground Breaking occurred in June 2011, and Power Plant Capacity Gas Req. Gas Supply Balance the Final Investment Commercial Operations begun on 1 August MW BBTUD BBTUD BBTUD Decision was made, 2012. Muara Karang : - Existing 908 followed by signing 253 110 -180 - Repowering 694 of the Sales and FSRU Nusantara Regas 1 secured 1.5 mtpa Tanjung Priok : Purchase Agreement LNG from the Mahakam gas producers, - Existing 1,180 296 10 -286 with Mahakam gas supplying around 200 mmscfd to PLN Muara - Repowering 743 suppliers and the Gas Karang, mostly for peak generation. Although TOTAL 549 120 -466 Sales Agreement with this represents less than half of its full capacity, PLN. the FSRU project is saving $ 1.8 million per14 SPE News . Oct/Nov ‘12
  8. 8. LNG FSRU Pioneer receiving terminals. The team compensated for its lack of capability with hard work, speed of execution, and close supervision. The FSRU team was supervised by at least four bodies: UKP4 (Presidential task force on control of LOCATION development program), Vice President’s office, Ministry of State Enterprises, and Ministry of Energy and Mineral Resources. Internally, Hendra needed to manage cultural differences between parent companies Pertamina and PGN, while developing PT NR’s own identity PLN MUARA KARANG LOCATION: 5o 58’ 28,920” LS dan 106o 47’ 57,96” BT RADIUS : 2 KM , WATER DEPTH: 22 – 23 M PIPING LENGTH FROM SHORE: 15 KM and culture. Picture 1: FSRU Location Given Governmental pressure and involvement, one would think that all partiesday in fuel subsidies. become a gas hub, whereby additional FSRUs would be aligned to achieve the same goal. as hubs will serve end users through small In reality, things weredifferent. Hendra andThe Future of LNG FSRU cargo ships and even trucks. Several gas team needed to negotiate their way out ofHendra delivered the first FSRU in the Asia- sales MOUs have already been exercised. In license complexity. They identified more thanPacific region on time and without serious addition, parent company PGN is finding other 100 different licenses required from variousincident. This gives confidence to stakeholders domestic buyers. stakeholders to produce first gas, andmanagedthat Indonesia is once again leading LNG to slim this down to 40+. This is still way tooinnovation. For Indonesia, having a variety of gas many. Such hindrances should be a relic of carriers and transporters, such as PT NR, the past bureaucracy.His next focus is to grow PT NR as a profitable PGN, Pertamina Gas, provides security andbusiness. flexibility of gas supply. However, we need Hendra identified three keys to success to further policies to develop the domestic gas build and install the first FSRU in the Asia-Operation of West Java FSRU at full capacity market, and to ensure the players, which are Pacific. Firstly, strong leadership with clearwill fulfill gas demand from PLN and for other fully or partially owned by Government, will vision was crucial to keep the project on-industries in the Jakarta area, and reduce fuel not suffer adverse effects from competition. time and on-budget. Secondly, stakeholderoil subsidies. communication unified vision and convinced Wisdom of the Pioneer all parties to remain in the spirit of the project.LNG supply is the issue. PT NR currently has Indonesia is well known as a world leader Thirdly, the ability to earn trust internally and toa single source of LNG, which will reduce in LNG exports, but until now it has never build 1.25 mtpain 2013. Current LNG supply is “exported” LNG to the domestic market at thisonly sufficient to meet a part of demand from scale. Hendra leads a team of capable persons Great voyage ahead for PT NR and forPLN Muara Karang. PT NR is working closely but without experience in building LNG Indonesia domestic gas.with SKMIGAS and PSC’s to double LNGsupply by the end of 2013. PT NR, as holder PROJECT UPDATES FSRU Key Term & Installationof SPA’s and GSA’s, is in position to manageLNG shipments from various sources, which LOKASI FSRT DI TELUK JAKARTAwill reduce dependency on PSC priority andscheduling.Fuel oil prices are forecast to stay high, soeconomics of LNG for power generation remainattractive. Nevertheless, the Government andPLN need to further encourage conversionfrom fuel oil to gas as much as, or perhapsmore than, to coal. Gas infrastructure and theLNG FSRU will improve fuel mix flexibility, • Mooring system consists of 4 mooring dolphins and 4 breasting dolphinsand increase source sustainability from both • Mooring dolphins will be equipped with 3 pad-eyes for connecting the mooring linesdomestic and imported LNG. • Breasting dolphins are equipped with 2 pad-eyes for connecting the mooring lines and 3 fenders to absorb the impact from LNGCPT NR plans to grow beyond PLN and power • The LNG carrier calling at the FSRU (side by side mooring)is taken to be maximum 157,000 m3 • LNG transfer from LNG carriers via marinized LNG hard armsgeneration. Hendra envisions PT NR to SPE News . Oct/Nov ‘12 15
  9. 9. Deep Water Gas Development Delving into the Novelty of the Masela Abadi FLNG Project Development By: Dinar Indriana Khoiriah, Sr. Project Communication Coordinator of INPEX Masela Ltd. Contract Area: Masela PSC Block Equity holder: INPEX (60%) EMP (10%) Shell(30%) Block acquired: November 16, 1998 Acreage: 5,725 km2(Original) 3,221 km2(Current) Field area: More than 1,200km2 (30kmx40km) Production: LNG 2,5mtpa @ FOB Condensate 8,400 BOPD Liquefaction: APCI Dual Mix Refrigerants Exploration Milestone 2000 - Drilled Abadi-1 and discovered gas in the Plover sandstone 2002 - Drilled 2 appraisal wells (Abadi- 2 and 3) and confirmed Hydrocarbon presence of each well 2007-08 - Drilled 4 appraisal wells to firmly confirm the reserves size - Conducted Pre-FEED for FLNGI npex’s courage to develop Indonesia’s and pressures, continuous wave movement, and protection from collisions. first Floating LNG (FLNG) project in the cyclones and limited processing space. Arafura Sea in Eastern Indonesia is fuelled Topside layout design considers safety,by a spirit to support Indonesian energy Masela is operated by Masela PSC, a operability and maintainability, with a focus onsustainability. subsidiary company of INPEX Corporation, risk exposures within the Living Quarters such an oil and gas company with 46 years ofThe story started in 1998 when the Masela experience in 39 projects worldwide, includingPSC was signed. In 2000, the discovery well 11 projects in Indonesia. Inpex’s cumulativeAbadi-1 was drilled followed by 3D and six worldwide investment to date is USD 18.3appraisal wells to confirm reserve size. Pre- billion.FEED extended from 2000 to 2008 and ledto the FLNG development concept, complete The illustration below shows the Stage-1with supporting studies and assurance a 30 Development Concept, which targets theyear production life. Floating liquefaction northern reservoir block. The map shows thetechnology was selected instead of a sub-sea drilling centre and the offset Floatingconventional land-based LNG plant as the LNG vessel location. Five production wellsAbadi field is far from land and separated by will be drilled from a single drilling center. Drilling Center and FLNG Deployment Diagramthe deep Timor Trough as seen in the map FEED for the SURF (Subsea Umbilical Riserbelow. In December 2010, final approval of the and Flowline) commenced in November 2012,Plan of Development (PoD) was received. and the FLNG FEED will start soon.The Abadi FLNG vessel will combine proven The Floating LNG facility will consists of thetechnology from FPSO, LNG carrier and LNG topside LNG Plant, hull and other elementsonshore plants, and is set to produce 2.5 mtpa as depicted below. Different from land-based(million metric tons per annum) of LNG. It will LNG plants, FLNG design requires studiesbe amongst the first FLNG projects worldwide, for process and equipment marinization,and the first in Indonesia. Challenges include to account for wave motion, marinedeep-water, high reservoir temperatures environmental loads, corrosion resistance16 SPE News . Oct/Nov ‘12
  10. 10. Deep Water Gas Development the Government of Indonesia include domestic gas allocation to support Indonesia’s economic development, taking into account the balance between domestic supply and exports. LNG marketing activities are being carried out in parallel with project development. Masela Abadi Floating LNG will be the largest and most-complex investment in Indonesian offshore oil and gas processing. Reliable operation in sometimes harsh marine conditions requires vast number of process and operational elements to be simultaneously performed with the risks associated with liquefaction plant performance and offshore operations. As floating liquefaction development becomes a reality, attention willas flare heat radiation and explosions in the LNG will be offloaded to LNG carriers with move from the technical arena to economicsprocess area. The illustration below shows a side-by-side configuration as shown and commercial obstacles. Many economic,an example FLNG layout, where the utility below. The close proximity of the LNG commercial, financial and legal considerationsarea segregates the living quarters from the carrier and FLNG means that LNG offloading need to be better understood and their riskshazardous processing area and flare. can only be done in benign conditions. mitigated before offshore LNG production Condensate produced with the gas will be can become a widespread gas monetizationProcess performance may be affected by offloaded to condensate carriers with a solution.wave motion. Tall towers and columns such tandem configuration, as typically done withas absorbers, fractionators and main heat conventional FPSOs.exchangers must be designed to handle thismotion. LNG containment must account for Masela Abadi FLNG will increase gassloshing in a partly-filled condition, the need sustainability for domestic and overseasfor deck space for process plant operability, buyers over a long term. Key commercialand safety and maintainability. arrangements currently being discussed with SPE News . Oct/Nov ‘12 17
  11. 11. Technology Corner Marginal Gas Development with Compact Motor-driven LNG By: Mutsumi Horitsugi, Chief Engineer HITACHI Ltd.I n the 21st century, a number of political and environmental crises have pushed gas to the fore as a more environmentally-friendly energy source than oil and coal. Largegas projects can absorb the cost to installlong pipelines or to install a LNG plant. Buthow to commercialize small and isolated gasprojects? Compact Motor-driven LNG is onepotential solution.Key WordsLNG, Motor Drive, Stranded Gas, MarginalGas Field1. BackgroundNatural gas is more environmentally-friendlythan oil, and gas fields are distributed Map 1-2 Natural Gas Resources in Indonesiamore widely than oil fields. Therefore, it isexpected that natural gas usage will continue gas production in regions other than North to transport and distribute the gas is underto increase. This increase is further driven by America and Russia (where gas pipeline development in some cases and simply nottechnical innovation such as high-efficiency networks are well established) is low despite economic in many other cases, especially toCombined Cycle Gas Turbines (CCGT) for plenty of resources. This is due to a lack of islands in eastern Indonesia. It will take time topower generation. infrastructure for gas transmission. cover widely spread marginal gas fields of 70% in volume of conventional gas and distributeHowever, for natural gas to become a major Indonesia is a good example. It has plenty them to many of remote source, we must build infrastructure of gas resources, including conventional andto transmit and distribute the gas from the unconventional gas such as CBM and shale gas 2. Ways to transmit Gas Energyfields to the markets. Map 1-1 shows that as shown on Map 1-2. However, infrastructure Established ways to transmit gas energy to markets include pipeline, LNG, CNG, Gas-To- Liquids and Gas-To-Wire. Future ways include Natural Gas Hydrates (NGH) transported by reefer. This article will focus on LNG, which is mainly liquefied methane at -161.5 oC at atmospheric pressure with 1/600 volume of gaseous methane. LNG is transported by cryogenic tanker and in some places by road tankers. The LNG business started in 1969 when Tokyo Electric Power Co. (TEPCO) and Tokyo Gas commenced LNG imports from Alaska. These companies benefited enormously from stable LNG prices through two oil crises in the 1970’s. Presently, LNG contributes 7.5% of total natural gas consumption, excluding domestic usage. More than 30% of LNG has been consumed in Europe and the USA. LNG can compete with piped gas due to economies of scale from large LNG plants and LNG carrier ships.Map 1-1 Gas Reserves & Production Volume by Region But such LNG projects are suited only to18 SPE News . Oct/Nov ‘12
  12. 12. Technology Corner also be converted into DME by dehydration which is proven technology, but the energy efficiency of the conversion is only about 60% which creates a high production cost. DME can be used as a substitute for LPG. GTL diesel can be blended to decrease the sulfur content of diesel from crude oil, but the present process to convert gas to diesel also has a low thermal efficiency. The wax by-products from the GTL diesel need to be processed in a hydro-cracker which is an extra cost. Gas-to-Wire (GTW) can be a good solution for marginal gas fields located not far from a power market.Table 3-1 Solutions for Gas Transmission 3. Applicability of Compact LNG of Auto Thermal Reformer Compact LNG is a solution for smaller gas (ATR) has been studied. fields located long distances from markets as However, problem is the shown on Table 3-1 high cost of the Oxygen (O2) plant, which tends to make The cross-over–point between Conventional the project uneconomic. To LNG and Compact LNG is at around 150 avoid the costly Oxygen mmscfd, equivalent to approximately one plant, heat resistant Ion million tons of LNG per year. Transport Membrane (ITM) to separate Oxygen from There are many kinds of LNG processes as air is under research and shown on Table 3-2. Processes for large-scale development in several LNG plants have higher efficiency, huge cost, laboratories to produce huge footprints and complexity. synthetic gas (CO+H2) more economically. For smaller gas developments, Single Mixed Refrigerant (SMR) is a better option than N2 Methanol has Expanders because SMR has higher efficiency disadvantages such as and greater tolerance to changes in feed gasgiant gas fields, which require long term gas toxicity and low calorific value, but is useful as properties that occur when additional gas fieldcontracts to recover the huge investment. a raw material for chemical products. It can developments come online.Smaller gas fields have remained stranded.One solution to commercialize sub-LNG gasfields has been to liquefy gas synthetically(GTL) to create methanol and/or Di-Methyl-Ether (DME) using the Fischer-Tropsch-Oil(FTO) process. The FTO process involvesreforming natural gas into carbon monoxide(CO) and hydrogen (H2), and then synthesisinto the final product. The present conversionrate is low at about 20% which can beuneconomic.Development of a catalyst to directly synthesizeliquid hydrocarbons and/or chemicals frommethane is still under development, so theindirect synthesis and reforming process willbe the main process in the industry for sometime.To increase the volume of reformer, introduction SPE News . Oct/Nov ‘12 19
  13. 13. Technology Corner4. Compact Motor-driven LNGTechnologiesLNG refrigerant compressors are usuallydriven by steam turbines and/or gas turbines.Steam turbine systems require a lot of auxiliaryequipment and consume energy to generatesteam, so are not suited to small-scale LNGplants. As for gas turbines, the range ofsmall gas turbines is limited, so it is hard tofind suitable gas turbines for small-scale LNGplants.Figure 4-1 shows a flow diagram of the SMRprocess, where the motor-drive system receivesa power from a local power plant or the grid.Compared to turbine-driven systems, a motor-drive SMR systems offer simpler operation,smaller footprint, lower Capex and Opex, higheravailability, and shorter construction schedulewith maximum prefabrication and skid-mountinstallation. Table 4-2 Comparison of Gas-turbine Drive VS Motor DriveAvailability of motor-drive systems is typically liquefaction efficiency than gas-turbine drive Other than harmonics, technical considerations5% higher than gas turbine system due to less systems. include gas property variation between gasmaintenance as shown in Table 4-2. fields, acid gas like H2S, and impurities like This is because of the independent design of alkaline metals. Small-scale LNG plants cannotThermal efficiency of motor-drive systems the power plant without margin requirements support luxurious gas treatment facilities tois higher than gas-turbine systems. This is from applicable standards. strip out all harmful substances. Therefore, abecause standards like API-617 specify that fit-for-purpose gas treatment facility shall beprocess compressors should have 10% of In the case of motor-drive systems with designed for each case considering reliabilityperformance margin, and that drivers including Variable Speed Drives (VSD) using inverters, of the system and conformity to applicablegas turbines should have another 10% of care shall be taken to avoid vibrations caused environmental regulations.margin. The result is gas turbines are operated by harmonics from inverters. Simulation is theunder partial load which results in lower thermal key technology to confirm stable operation 5. Conclusionefficiency. prior to the field installation by controlling Considering all the above, it is expected that all the resonance points among harmonics compact motor-drive technologies can realizeThe end result is motor-drive SMR process will frequencies and natural frequencies of all competitive LNG prices by minimizing Capexhave higher total efficiency than gas-turbine rotating equipment such as motors, generators for fixed facilities like the gas treatment systems, even though SMR has a lower and gas turbines. Skid-mounted facilities such as cold boxes and gas turbine generators are expandable, flexible for variable operation and can be reused for future projects. The feasibility of Compact LNG will be improved by well-organized asset management of such movable equipment. The prize is enormous – commercialization of stranded, marginal and geriatric gas fields around the world, and even associated gas from remote oil fields. Reference 1) Society for the study of gas market problem in METI Japan houkoku/houkoku-sankoukokusai.pdf 2) Mr. Hiroshi Morishima, All about Natural Gas – Latest Knowledge for Major Energy in 21 Century, Oil & Gas Review 2004/1-3 VOL.37 No.1-2(JNOC) Figure 4-1 Typical Flow Diagram of SMR with Motor-drive System20 SPE News . Oct/Nov ‘12
  14. 14. PETROLEUM & MANAGEMENT PROGRAMS FOR FEBRUARY - MAY, 2013• Understanding The PSC Concept Drs. Sutadi Pudjo Utomo Feb. 11 - 12*• Production Safety Systems Dr. Maurice Stewart, PE, CSP Feb. 11 - 15**• Fire Equipments, Boiler and Heaters Dr. Maurice Stewart, PE, CSP Feb. 19 - 20• Drilling Engineering for Non-Drilling Engineers Dr. -Ing. Bonar T. Halomoan Marbun Feb. 26 - Mar.1*• TNA and Evaluating The Results Jamin Djuang, PE, M.Sc., MBA March 6 - 8*• PSC Accounting Drs. Sutadi Pudjo Utomo March 13 - 15*• Supply Chain Management in Oil and Gas Industry Dr. Ir. Antarikso A., MBA, CPIM March 13 - 15*• Effective Negotiation Skills LDI Speaker March 18 - 20*• Maintenance Planning and Scheduling Dr. Ir. Antarikso A., MBA, CPIM March 20 - 22*• Effective Supervisory Skills LDI Speaker March 20 - 22*• Public and Human Relations Skills Dra. Magdalena Wenas, M.Comm. March 25 - 27*• PSC Budgeting and Reporting Drs. Sutadi Pudjo Utomo March 25 - 28*• Assertiveness and Influencing Skills Dra. Evita ES. Salim, MPsi. & Team March 26 - 28*• Time Management and Personal Effectiveness LDI Speaker March 26 - 28*• Effective Communication & Interpersonal Skills Dra. Magdalena Wenas, M.Comm. April 1 - 3*• Production Safety Systems Dr. Maurice Stewart, PE, CSP April 1 - 5**• Reliability Centered Maintenance (RCM) Dr. Ir. Rachmat K. Bachrun April 1 - 5*•Modern Project Management with Monte Carlo Simulation Dr. Ir. Antarikso A., MBA, CPIM April 2 - 5***• Report Writing in English Jamin Djuang, PE, M.Sc., MBA April 8 - 10*• Managing Conflict and Handling Difficult People Dra. Evita ES. Salim, MPsi. & Team April 10 - 12*• Advanced Supervisory Skills LDI Speaker April 10 - 12*• Equipment Failure Analysis Dr. Ir. Rachmat K. Bachrun April 15 - 19*• Basic Drilling Technology Dr. -Ing. Bonar T. Halomoan Marbun April 16 - 19*• Office Management and Electronic Filing Systems Ir. Rudianto Prabowo, MSIS April 17 - 19*• Self Management and Achievement Motivation Dra. Evita ES. Salim, MPsi. & Team April 22 - 24*• Time Management for Secretaries LDI Speaker April 24 - 26*• Understanding The PSC Concept Drs. Sutadi Pudjo Utomo April 29 - 30*• Modern Maintenance Management LDI Speaker Apr. 29 - May 3*• Management Skills for Secretaries and Admin. Assistants LDI Speakers May 1 - 3*• Problem Solving and Decision Making LDI Speaker May 1 - 3*• Crisis Management and Public Relations Dra. Magdalena Wenas, M.Comm. May 6 - 8*• Powerful Presentation Skills LDI Speaker May 13 - 15*• Introduction to Oil and Gas Operations Jamin Djuang, PE, M.Sc., MBA May 20 - 21*• Gas Reservoir Engineering Dr. Zaki Bassiouni May 20 - 24*• Public Relations Skills Dra. Magdalena Wenas, M.Comm. May 22 - 24*• Plant Piping and Pipeline Systems Dr. Maurice Stewart, PE, CSP May 27 - 31*• Well Completion and Workovers Denis Gaudet, PE May 27 - 31*• Modern Purchasing and Inventory Management Dr. Ir. Antarikso A., MBA, CPIM May 29 - 31*Note : Courses are in Jakarta except those marked with (*) are in Bandung, (**) in Balikpapan and (***) in Bali Harmoni Plaza B-16, Jalan Suryopranoto 2, Jakarta - Indonesia Telp. (62)(21) 6326911, 6313556 Fax (62)(21) 6330212, 6305074 E-mail : - Website :