Global LNG Trend, Geopolitics and Geoeconomics Strategy
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Global LNG Trend, Geopolitics and Geoeconomics Strategy

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This slides present view that LNG business go beyond economic and commercial consideration. National interest of Developing countries together with their National Security is also a determining ...

This slides present view that LNG business go beyond economic and commercial consideration. National interest of Developing countries together with their National Security is also a determining concern.

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  • And to secure the future of energy source, especially gas, for both domestic use and international market, we are now conducting mega projects to develop and exploit several potential fields such as Banyuurip in Cepu Block , Natuna D-Alpha or East Natuna Block, Masela Block of INPEX, Donggi Senoro, Indonesian Deepwater Development as well as Jangkrik Structure of ENI

Global LNG Trend, Geopolitics and Geoeconomics Strategy Global LNG Trend, Geopolitics and Geoeconomics Strategy Presentation Transcript

  • 2009 © BPMIGAS – All rights reserved Global LNG Trend, GeoPolitics and GeoEconomics Strategy Sampe L. Purba 1
  • 2 2009 © BPMIGAS – All rights reserved
  • 2009 © BPMIGAS – All rights reserved Agenda • GeoEconomics Pull vs GeoPolitics Pressures • World LNG Projection • Indonesia’s shaping its goal Oct-13 3 3
  • GeoEconomic Pulls vs GeoPolitics Pressure (1) 2009 © BPMIGAS – All rights reserved • High Politics • Containment and hedging strategy • Trans Pacific Partnership vs ASEAN +6 • US to shift 60% warship fleet to Asia – Pacific by 2020 • US – Russia – China role play (ref. Harvard – Baker study – geopolitics on Energy 2012) Oct-13 • Implemented Policy • FDI to China (Taiwan 80%, Japan, US, Australia trade 105 b =>2x as to US)  US ($ 257B) to compete China ($280B) in net inflow FDI  MNCs and State Owned MNCs Sponsors 4 4
  • Why Energy Matters "Geopolitics => Dynamics interaction between Power and Space 2009 © BPMIGAS – All rights reserved Geoeconomics is the study of the spatial, temporal, and political aspects of economies and resources Oct-13 5 5
  • 2009 © BPMIGAS – All rights reserved Oct-13 Geopolitics and GeoEconomics Concern : - Sea shield, strike and base - Energy supply and security - Psycological presence and commitment - Secure sea-lanes, pipelines and other economic interest - Law of maritime trade 6 6
  • GeoEconomic Pulls vs GeoPolitics Pressure (2) ... energy 2009 © BPMIGAS – All rights reserved • National Interest defined • Some examples • US to manage interdependence - aset-resource based - technology, know-how, patent - Supply Chain based • Over the Horizon Approach • Foreign Affair Policy comprehensiveintegrated approach • In 2005 US Congress to block CNOOC – Unocal bid, under National Security concern (Energy Policy Act 2005, Protocol accession WTO) • Preventing US to export Gas Oct-13 "North America Natural Gas Security and Consumer Protection Act“, no export terminal up to 2025 "Low natural gas prices are a competitive advantage for American businesses and a relief for American families, and exporting our natural gas would eliminate our economic edge and impose new costs on consumers," said Rep. Markey, who is the top Democrat on the Natural Resources Committee and a senior member of the Energy and Commerce Committee. "This is America's natural gas and it should stay here in America.“   US MNCs to own and build LNG export terminal around the world (eg. Gorgon, Qatar, PNG, ) 7 7
  • ... Some Worldwide LNG Project Check it out : • Who Own, Build, Operate, Finance, Offtaker 2009 © BPMIGAS – All rights reserved • Oct-13 8 8
  • Countries to chart what it needs 2009 © BPMIGAS – All rights reserved • Security, accessibility, commerciability: Reexport – arbitrage and Economic added value Oct-13 9 9
  • 2009 © BPMIGAS – All rights reserved Agenda • GeoEconomics Pull vs GeoPolitics Pressures • World LNG Projection • Indonesia’s shaping its goal Oct-13 10 10
  • Analysis : HearSays in the market 2009 © BPMIGAS – All rights reserved • FID : • Commercial Deal : Price – Volume Terms Oil Price as per EIA Energy outlook, 2013 Oct-13 11 11
  • 2009 © BPMIGAS – All rights reserved US prediction to be natural gas exporter may change the equation US Natural Gas Production as per EIA Energy outlook, 2013 Oct-13 12 12
  • LNG as a long term Horison Project 2009 © BPMIGAS – All rights reserved • Technical – Operational – Commercial – Bankability - Others • Location > Infrastructures, geology, topography • Gas supply availability • Sponsors reputation • EPCI Contractors • Operator of the Project • Ship Construction and/or operation • Technology involvement • Offtake commitment strength • Purchasers Creditworthiness Oct-13 • Others – some time not Others  Market - FID Existing and Forecasting  Alternative source of energy competitor  Economy (bullish – bearish) 13 13
  • LNG as Long-term Project • Critical (or not) isues along the life time of the Project 2009 © BPMIGAS – All rights reserved • Licensing/ Permit • Technical concept Oct-13 • Changes/ adjustments (due to external – internal) • Operational integrity • Reserve reasessments 14 • Extension of PSC 14
  • FEATURES OF FLNG FACILITY  LOGISTIC SHORE BASE  SURF : FEED, Drilling, Flow line, Umbilical, Mooring, Turret and Riser.  FLNG 2009 © BPMIGAS – All rights reserved FEED ,Gas Pre-Treatment & Liquefaction Process, Living Quarter, Hull, Storage Tank, Utilities ( Power Generation, Compressor, Electrical etc ), Integration, Offloading and Mooring System. FLNG is required complexity design Specifically following interfaces are most essential : - Motion Condition ( Process performance & Fatigue ) - Class Society’s Requirement - Safety Studies (Engineering HSE) - Constructability (Module yard, Integration yard & Shipyard) - Offshore operatio  MAINTENANCE & OPERATION 15
  • Power of Prediction and Negotiation • Supply Side  US Shale gas ->NIMBY  New Technology and infrastructures  Alternative Energy sources  New Project Sanction 2009 © BPMIGAS – All rights reserved • Demand Side  Japan, China, India Growth  Domestic needs priority  European dependence on Russian Gas Network  Etc. Oct-13 • Think its Nature of inflexibility • Long – mid – spot • Uncommitted production capacity, • Receiving terminals excess capacity • Unseasonal demand • Vessel space uncommitted availability 16 16
  • 2009 © BPMIGAS – All rights reserved Agenda Oct-13 • GeoEconomics Pull vs GeoPolitics Pressures • World LNG Projection • Indonesia’s shaping its goal 17 17
  • Indonesia Gas Balance NERACA GAS BUMI INDONESIA 2013-2028 2013 - 2028 12.000 10.000 2009 © BPMIGAS – All rights reserved MMSCFD 8.000 6.000 4.000 2.000 0 Oct-13 2013 2014 2015 CONTRACTED DEMAND 2016 2017 2018 COMMITTED DEMAND 2019 2020 POTENTIAL DEMAND 2021 2022 2023 EXISTING SUPPLY 2024 2025 PROJECT SUPPLY 2026 2027 2028 18 POTENTIAL SUPPLY 18
  • Gas Reservers, CBM Resources and Shale gas potential ACEH (NAD) 7.08 NATUNA NORTH SUMATRA 1.23 50.27 CENTRAL SUMATRA 9.28 16.65 PAPUA EAST BORNEO SOUTH SUMATRA 2.57 16.03 24.14 CELEBES WEST JAVA 2.98 2009 © BPMIGAS – All rights reserved 5.26 MOLUCCAS 15.21 EAST JAVA (Advance Resources Interational, Inc., 2003 processed) GAS RESERVES PROVEN = 103.35 TSCF POTENTIAL = 47.35 TSCF TOTAL = 150.70 TSCF Oct-13 (As of January 1st 2012) CBM RESOURCES = 453.30 TCF Total CBM Basin = 11 SHALE GAS POTENTIAL  (Advance Resources International, Inc., 2003) Contract Signed up to 2012 : 54 CBM PSCs Currently the Government conduct early study on shale gas potential 19 19
  • When number talks National Energy Policy At Present Oil 49,7 % Gas 20,1 % Coal 24,5 % 2009 © BPMIGAS – All rights reserved Renewable 5,7 % Target 2025 Oct-13 Oil 20% Gas 30 % Coal 33% 1. 28% of National Revenue (2012), contributed by MEMR sector 2. Fuel and electricity subsidy (expected to reduce gradually) 3. Condusive investment on the sector 4. Indonesia have energy mix resources, currently heavy on fossil based 5. 6. 7. 8. Notice Energy Mix target by 2025 Gas domestic allocation 56 %, export 44 % Infrastructure limit as a challenge Limited energy access, electrification ratio 73% Renewable 17% 20 20
  • Historical Oil and Gas Production Profile Shifting from crude to gas dominant GAS PRODUCTION DOMINANT 2009 © BPMIGAS – All rights reserved OIL PRODUCTION DOMINANT 21
  • Gas allocation 2013 (CONTRACTED) ALOKASI GAS BUMI 2013 (CONTRACTED) TRANSPORTASI 0,07% GAS RUMAH TANGGA 0,09% INDUSTRI 16,87% EKSPOR 43,81% 2009 © BPMIGAS – All rights reserved LISTRIK 19,09% Oct-13 PUPUK 11,20% PENINGKATAN PRODUKSI 8,87% 22 22
  • PROSPECT OF STRATEGIC OIL AND GAS DEVELOPMENT PROJECT NATUNA D-ALPHA Gas Reserve: 46 TCF. Total Investment US$ 41 billion On stream 10 yr after development Gas Reserves 8,09 TCF investment train 3, US $ 12 Milyar Train 1 & 2 on stream 2009 & Train 3 by end of 2018 2009 © BPMIGAS – All rights reserved DONGGI SENORO Gas Reserve 2,8 TCF Total Investment US$ 1,7 billion (upstream) On stream 2015 Oil Reserve: 609 mil bbl CEPU Oct-13 Total Investment US$ 6,6 billion Max. Production165 MBOPD by 2014. TANGGUH TRAIN 3 Gas Reserve 9,18 TCF. MASELA Total investtment US$ 4,99 billion On stream 2018. 23 23
  • 2009 © BPMIGAS – All rights reserved MP3EI : Staging, Continuing, Improving Consistency and change of paradigm 24
  • 2009 © BPMIGAS – All rights reserved Oil and Gas as a strategic Economic driven factor Priority : Horizontal – vertical locomotive 25 25
  • 26 26 2009 © BPMIGAS – All rights reserved
  • 2009 © BPMIGAS – All rights reserved Concluding Remarks • Geoeconomics Pull and Geopolitics Pressure to play on the Global Policy • Outlook, Prediction and Projection subject to external and internal factors • Indonesia to look economic benefit beyond revenue per se Thank You – Horas Sampe L. Purba sampepurba@gmail.com 27 27
  • Brief CV • Sampe L. Purba, Lead Specialist Business Support Management, SKKMIGAS • 2009 © BPMIGAS – All rights reserved Sampe L. Purba, currently holds function as Lead specialist Business Support Management in SKKMIGAS used to be known as BPMIGAS - a state legal-owned institution supervising and managing all Production Sharing Contracts operating in Indonesia. His job mainly dealing with the assistance to related Function across the Organization with respect to all legal related matters, regulations and compliance reviewing of contracts and procurement, management assessment of program, commercial and financial aspects of oil and gas business, evaluating of Project Finance with international financial institution, LNG Project, Taxation and Risk management matters. He joined BPMIGAS since the first year of its establishment in 2002. Prior to it, Mr. Purba was a Government Auditor dealing with many aspects of governance in Public institution, Industry and Services Corporation. • Mr. Purba entered some Universities both domestics and abroad, to secure his degrees in Economics, Banking, Law and Business administration. He is just completing Regular Management National Leadership Course in National Resilience Institution • As part of maintaining and updating his knowledge and sharing of experiences, Mr. Purba actively attends and gives workshop, conferences and seminar domestic and abroad. • Mr. Purba registered as member of Professional association such as Association of International Petroleum Negotiators (AIPN), Indonesian Petroleum Society, and 28 Okt-13 Indonesian Accountant Association 28