FLNG - Offshore Assets Development , Korea 2010 Sampe Purba

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FLNG - Offshore Assets Development , Korea 2010 Sampe Purba

  1. 1. CURRENT OFFSHORE GAS ASSETS, DEVELOPMENTS & POTENTIAL for FLNG DEVELOPMENT Sampe L. Purba VP Program and Budgeting PSC BPMIGAS – INDONESIA slpurba@bpmigas.com
  2. 2. 2009 © BPMIGAS – All rights reserved Agenda • OVERVIEW OF OFFSHORE GAS RESERVES : SHALLOW, DEEPWATER AND STRANDED • GAS RESOURCE ALLOCATION • ACHIEVING SYNERGIC COOPERATION AND BUSINESS PARTICIPATION • PERSPECTIVE ON FLNG TECHNOLOGY AND DEVELOPMENT • Concluding remarks
  3. 3. SEDIMENT BASINS SPREAD ACROSS THE COUNTRY SOUTH CHINA SEA N NATUNA 2009 © BPMIGAS – All rights reserved IRIAN JAYA JAWA BASINS WITH OIL & GAS PRODUCTION (14) BASINS WITH DISCOVERY (7) BASINS DRILLED (15) BASINS NOT YET DRILLED (24)
  4. 4. 2009 © BPMIGAS – All rights reserved EXPLORATION AND EXPLOITATION BLOCKS ACROSS THE COUNTRY
  5. 5. Country’s Gas Reserve(3P) Map 5.55 52.15 1.26 10.57 21.78 23.71 2.69 17.74 3.68 EAST JAVA 5.29 Land = 68.56 TCFG Sea : Shallow = 23.71 TCFG Deep Water = 15.22 TCFG Stranded = 52.15 TCFG 15.22
  6. 6. 2009 © BPMIGAS – All rights reserved Agenda • OVERVIEW OF OFFSHORE GAS RESERVES : SHALLOW, DEEPWATER AND STRANDED • GAS RESOURCE ALLOCATION • ACHIEVING SYNERGIC COOPERATION AND BUSINESS PARTICIPATION • PERSPECTIVE ON FLNG TECHNOLOGY AND DEVELOPMENT • Concluding remarks
  7. 7. 2009 © BPMIGAS – All rights reserved Our Treasures Country’s Gas Reserves
  8. 8. Gas allocation shown Lifting Oil 4.99% 2009 © BPMIGAS – All rights reserved Ekspor 44.54% Own Use+HSE Flare 16.82% Ekspor 44.54% Domestik 55.46% Pupuk Fertilizer 7.94% 7.94% Listrik Power 10.24% 10.24% Manufactur Industri 13.61% e 13.61% Domestik (LPG) 1.84% Industri CO2 0.02% 9
  9. 9. National Gas Supply Management Policy model • Objective: • to improve the economics of marginal gas development • Implementing Gas Domestic based on accessibility to the consumer’s market International market with higher price 2009 © BPMIGAS – All rights reserved Domestic market Small and marginal field Supply gas Revenue Development of small and marginal field Major field with economics reserves Export to domestic price difference 1. DMO volume to Contractor 2.Some to Govt Entitlement 10
  10. 10. 2009 © BPMIGAS – All rights reserved Agenda • OVERVIEW OF OFFSHORE GAS RESERVES : SHALLOW, DEEPWATER AND STRANDED • GAS RESOURCE ALLOCATION • ACHIEVING SYNERGIC COOPERATION AND BUSINESS PARTICIPATION • PERSPECTIVE ON FLNG TECHNOLOGY AND DEVELOPMENT • Concluding remarks
  11. 11. 2009 © BPMIGAS – All rights reserved Host Government Perspectives National Resource allocation Development Local scenario and Business Technology Synergy and Options Participation 12
  12. 12. National Resource allocation Domestic vs Export • Security of domestic supply and industrial feedstock • Hunting and securing hard currency Transforming the national industry 2009 © BPMIGAS – All rights reserved • Increasing added value for sustainable development • Degree of Participation in LNG chain : subsurface, extracting, liquifaction,shipping, regasification • Accelerating and stimulating supporting manufacture Regional and National Geo Economics Strategy • Safeguarding and enhancing geographical border • Participation of National or State Owned Company in border line fields 13
  13. 13. Local Business Synergy, Contribution and Participation >> comprehensive growth SWAP for captive market • Barter for domestic shipyard contract • Alliance with domestic manufacturing company • DMO swap inter Corp 2009 © BPMIGAS – All rights reserved Local contents • Local logistic base • Training ground for national employees • Community Development and corporate social responsibility Supporting services • National Banking involvement in intermediaries and transaction • research center • Insurance and financing 14
  14. 14. Regulatory aspect • Domestic market obligation (DMO) Allocation and • Pricing and commercial aspect commercial • Taxation, remittance, banking aspect 2009 © BPMIGAS – All rights reserved Technical and operational aspect Legal aspect • Reserve confirmation, drilling, processing and shipping • Health, Security and Environment • Ownership and legal status of FLNG • Schematic arrangement as downstream or upstream expansion • Will it be categorized as storage or ship ? 15
  15. 15. 2009 © BPMIGAS – All rights reserved Risk from Government or Host Country Perspectives • Mostly are ignored as too blurry to measure in exact monetarywise • Pressure to get ease the burden of economy • Low added value in economy chain • Importing dominant player to your yard Risk as Octopussy effect, almost cul de sac and entering point of no return 16
  16. 16. 17 2009 © BPMIGAS – All rights reserved
  17. 17. INVESTOR’s Perspective Sanctity of Contract Maximation of Return of Investment Technical and commercial Aspect Enhancement to its global position •Capitalizing and mobilizing HQ resources (e.g Technical, R &D, global supply chain) Major changes of circumstances and Squaring mechanism •Size of FLNG •Hull and top side design and lay out •Liquifaction technology •Integration line of business (FEED – Project – Upstream – downstream – support services) 2009 © BPMIGAS – All rights reserved Hurdle rate Sanctity of contract competition vs Flexibility among global portfolios • required reserves •Subsurface property characteristics Concerned over Opex – Capex not to over run Excercise Long term inalienable rights in operational the name of investment • shipping arrg’mt •Receiving •Higher bargain terminal position across its •Commercial deal peer
  18. 18. 2009 © BPMIGAS – All rights reserved Alignment of interest Profit and economics People Welfare Profit and welfare To balance the interest of parties involved 19
  19. 19. 2009 © BPMIGAS – All rights reserved Agenda • OVERVIEW OF OFFSHORE GAS RESERVES : SHALLOW, DEEPWATER AND STRANDED • GAS RESOURCE ALLOCATION • ACHIEVING SYNERGIC COOPERATION AND BUSINESS PARTICIPATION • PERSPECTIVE ON FLNG DEVELOPMENT • Concluding remarks
  20. 20. Development Scenario and Technology Options Utilizing stranded gas reserves from remote areas • On shore or pipe line transfer • FCNG • FLNG Development Scenario 2009 © BPMIGAS – All rights reserved • Full scale • Partial, sequental stages • Early Production to confirm reserve and technology Technology issues • Proven or newly applied technology • Patent for technology 21
  21. 21. Capex Estimate 5% 14% 2009 © BPMIGAS – All rights reserved 81% Sub Sea Prod Syst FLNG Logistic Base
  22. 22. FLNG Project cost COMPONENT 21.29% 25.00% 20.00% 13.76% 15.73% 15.29% 16.92% 15.00% 10.00% 5.00% 2009 © BPMIGAS – All rights reserved 0.00% 4.55% 5.00% 3.15% 4.32%
  23. 23. 2009 © BPMIGAS – All rights reserved Concern on the FLNG • Liquefaction process in open and high volatile sea • Viability and safety margin of loading LNG at sea (need mooring system to stabilize Plant ship/barge) • Loading of LNG and LPG to transport ship carrier (vertical and lateral movement of the sea – winds, current, wave) • Operational and flexibility to deal with inert gas (CO2) or corosives(SO2)
  24. 24. 2009 © BPMIGAS – All rights reserved http://www.bakerinstitute.org/programs/energyforum/publications/docs/NewEnergyTechGasSectors_EvolutionofMarkets.pdf/view?searchterm=floating%20LNG%20technology 25
  25. 25. The prospect indication of Floating Production System as per 2009 2009 © BPMIGAS – All rights reserved This figures are indication, some of which are still under study 26
  26. 26. Latest dev’t in FLNG Project to – be : Masela Inpex • • 2009 © BPMIGAS – All rights reserved • • • The first gas discovery in Arafura Sea, Indonesia Gas reserves est 6 – 9 TCF Remote location, no major gas market & infrastructure (150 Km from Tanimbar island, 500 km from Aru Island Water depth 400 – 800 m Expect to be first LNG Project in Southern East Indonesia
  27. 27. 2009 © BPMIGAS – All rights reserved Excerpts from corp. website 28
  28. 28. When size matters USS Blue Ridge (LCC -19) Flagship, US Seventh Fleet FLNG , 1 x 4.5 MTPA Length 194 m, beam 32.9 m Length 500 m, width 82 m Football yard – as per FIFA standards : Length 100 – 110 m, width 64 – 75 m 29
  29. 29. Natuna : FLNG >> one- of the potential dev’t scenario Ratchab uri Rayo ng Cambod ia Eraw an • • 2009 © BPMIGAS – All rights reserved • • Giant Reserves 222 TCF, high CO2 dry +/- 70%, or net reserve recoverable gas +/46 TCF to considerRemote location, no major gas market & infrastructure Water depth +/- 145 m Gas Pipe line, FLNG or land base LNG Plant open Distance from Natuna to Potential Markets – – – – – – – Natuna Island National Border Bintulu Kerteh Batam Jakarta Rayong 225 km 520 km 450 km 790 km 880 km 1,340 km 1,540 km Vietna m JDA M Aru n Kerte h GP P -T Border Wes t Natun a M -I Bord Natun er a Islan d Singapo re Bata m 0 20 0 40 0 Existing P/L under construction Potential P/L 60 0 K M Jakar ta Natuna D Alph a Bintul u
  30. 30. Challenge for F/ LB LNG Plant 2009 © BPMIGAS – All rights reserved • Technonolgy and Commercial Challenge • Volume of Production , Plateau period and life time (need to have reasonable certainty ahead of developing scenario • Location : Remote and almost in the middle of no where • High CO 2 content for removing and treating • High Capex required to develop fields, treating production and marketing of gas • Required abundant volume of gas • Logistics Challenge • LNG Plant Site  Pipeline Coridor Liquefaction Trains Storage Tanks Loading terminal • Marine Base Jetty for berthing/offloading Storage for drilling materials General bulk Storage Laydown / work areas Assembly of steel risers Accomodation • Airport Fixed wing operation Helicopter operation Communication center Accomodations Medical facilities
  31. 31. FLNG sub components Concern FEED Gas Receiving System Capacity to separate feed gas, condensate and produced water, and temporarily materials without interruption operations Gas Processing system Liquifaction Processing system Acid gas removal unit, dehydration unit, mercury removal unit, booster compressor as necessary Safety and reliability, technology risk, engineering design, operability, thermal efficiency, environmental considerations Condensate Process system Separate light component, control vapor pressure 2009 © BPMIGAS – All rights reserved Water Process System To lean, reclamate, recycle and reinjection at acceptable stdrd Products Storage & Loading systems Hull & Mooring System Storage for LNG and condensate product and designing the efficient and safe offloading system Suitable to storage LNG, condensate, chemical and machinery rooms Power generators, fuel, steam and cooling sisytem, instruments, fire protection systems etc. Control rooms, maintenance, accomodations, authority and security,recreational, heli deck ect Utility systems Living Quarters 32
  32. 32. 2009 © BPMIGAS – All rights reserved Agenda • OVERVIEW OF OFFSHORE GAS RESERVES : SHALLOW, DEEPWATER AND STRANDED • GAS RESOURCE ALLOCATION • ACHIEVING SYNERGIC COOPERATION AND BUSINESS PARTICIPATION • PERSPECTIVE ON FLNG TECHNOLOGY AND DEVELOPMENT • Concluding remarks
  33. 33. Concluding remarks More of petroleum reserves are laid in remote and deep sea 2009 © BPMIGAS – All rights reserved  To monetize and economize it is technical and economical consideration  FLNG is one of alternatives to free and utilize stranded reserves While such challenges can be well tacled and responded from business perspectives, the host Government measure things far more and beyond direct economic project consideration per se 34
  34. 34. 2009 © BPMIGAS – All rights reserved Achir’ul kalam • Thank you • Terima kasih • Maturnu wun • Merdeka slpurba@bpmigas.com • Horassss
  35. 35. Brief CV Mr. Sampe L. Purba, born in 1963, currently holds position as Vice President for Program and Budgeting Management of PSC in BPMIGAS, a state legal owned institution supervising and managing all Production Sharing Contracts operating in Indonesia. His job mainly deal with management assessment of program, commercial and financial aspects of oil and gas business. He also deeply involves in evaluating of Project Finance dealing with international financial institution, LNG Project Finance, Taxation and Risk management matters. • 2009 © BPMIGAS – All rights reserved • Mr. Purba got his degree in Economics more than twenty years a go from The University of North Sumatera. He also holds a State Registered Accountant, and Post graduate degree in Finance – Commerce from The University of New South Wales and also completing his Business Law degree from a leading university in Indonesia. Mr. Purba attended also short course in National Resilience Institute to equip and broad his spectrum and perspectives in managing natural resources. Currently, Mr. Purba pursues his study on post graduate in diplomacy and business negotiations • As part of maintaining and updating his knowledge and sharing of experiences, Mr. Purba actively attends and delivers workshop, conferences and seminar domestic and abroad. He is an active members of Indonesia Accountant Association, Indonesia Petroleum Society and Association of International Petroleum Negotiators. Okt-13 36

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