Global LNG Trend, Geopolitics and Geoeconomics Strategy

2009 © BPMIGAS – All rights reserved

Global LNG Trend, GeoPolitics and
GeoEconomics Strategy

Sampe L. Purba

1

2



Agenda
• GeoEconomics Pull
vs GeoPolitics
Pressures
• World LNG
Projection
• Indonesia’s shaping
its goal

Oct-13

3
3

GeoEconomic Pulls vs GeoPolitics Pressure (1)


• 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


Geoeconomics is the study of the
spatial, temporal, and political
aspects of economies and
resources

Oct-13

5
5


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


• 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


•

Oct-13

8
8

Countries to chart what it needs


• Security, accessibility, commerciability: Reexport – arbitrage and Economic added value

Oct-13

9
9


Agenda
vs GeoPolitics
Pressures
• World LNG
Projection
its goal

Oct-13

10
10

Analysis : HearSays in the market


• FID :
• Commercial
Deal : Price –
Volume Terms

Oil Price as per EIA Energy outlook, 2013

Oct-13

11
11


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


• 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


• 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


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


• 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


Agenda

Oct-13

vs GeoPolitics
Pressures
• World LNG
Projection
its goal

17
17

Indonesia Gas Balance
NERACA GAS BUMI INDONESIA
2013-2028
2013 - 2028
12.000

10.000


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

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
%


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


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%


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


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


MP3EI : Staging, Continuing,
Improving
Consistency and change of paradigm

24


Oil and Gas as a strategic Economic driven
factor

Priority : Horizontal – vertical locomotive

25
25

26
26



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

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27

Brief CV
•

Sampe L. Purba, Lead Specialist Business Support Management, SKKMIGAS

•


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

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