Study of:

PERFORMANCE AND BUSINESS OPPORTUNITY OF GAS IN INDONESIA,

2010 - 2014
(Equipped with Acceleration of City Gas)
February, 2010

Oil exploitation in Indonesia has been going on for more than one century
periodically draining the existing oil potency, crude oil reserve in Indonesia (2009) was
7,998 MMSTB (proven reserve 4,303 MMSTB and potential reserve 3,695 MMSTB), with
production level of 357 million barrels per year, it is predicted that oil in Indonesia
would be exhausted in about 10 years.

While during the last fifteen years, the development of natural gas reserve tended
to increase, as of January 2009, it was recorded about 159 trillion standard cubic feet
(TSCF). With production level of about 2.74 TSCF per year, the natural gas reserve
exploitation is predicted to go on for about 40 years.

Along with the issuance of UU Migas No 21/2002, and Kepres No. 57/2002, it is
potentially changes the management pattern of oil and gas in Indonesia, such as the
distribution of government, regulator, and business player of oil gas function, sorting the
business chains of several main activities (unbundling), and focusing on the
liberalization of downstream oil and gas sector. Paragraph 8 article 1 of UU No. 21/2002
firmly stated that the government should prioritize the utilization of gas for the domestic
consumption needs.

During the last five years, domestic gas needs was increased significantly or
almost reached 100% from 29.6% (2002) to become 49.5% (2008), during the period of
2003 – 2008, 96 gas business contracts has been signed with various users.
Accumulatively, the gas contract volume reached 14.56 TCF, consisted of industrial
sector 5.9 TCF (41%), electricity 5.83 TCF (40%), fertilizer industry 2.83 TCF (19%).
However, until now, the limitation of infrastructure and economy often cause domestic
gas supply scarcity.

By the end of June 2009, it was reported that DESDM has prepared a short-term
program (2010 – 2014), such as simplifying the bureaucracy of exploitation license,
increasing production and energy utilization for domestic market obligation.

Referring to the statement of the Directorate General of Oil and Gas, Evita
Legowo, in the 2010 budget, there are seven oil and gas priority activities, such as
development of gas transmission and distribution, service and monitoring natural gas
business, front end engineering design (FEED) of LPG mini refinery development.

Considering that the APBN fund source was still below the level of 10% (of the
needs), the private sector needs to participate actively in the gas development activity in
Indonesia in 2010 – 2014.

By discussing the issue of gas industry in Indonesia, including the production

progress and its utilization, enriched with the prospect of domestic natural gas resource,

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and acceleration of energy diversification policy implementation, made this study is very
useful for the players in the gas industry, including the government and involved
corporations, also financing institution, either domestic or international.

This study is prepared in 500 pages, and we offer at the price of Rp 5,500,000 (Five
million five hundred thousand Rupiah) per copy for the Indonesian version, or US$800
(Eight hundred US Dollar) per copy in English version. To order and further information
about this study, please contact PT Media Data Indonesia by telephone number (021) 809
6071 and facsimile (021) 809 6071 by filling the attached form. For overseas or outside
Jakarta order, additional delivery fee would be charged.

Thank you for your kind attention.

Jakarta, Februari 2010

PT Media Data Riset

Drh H. Daddy Kusdriana M.Si

Direktur Utama

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 Study :
PERFORMANCE AND BUSINESS OPPORTUNITY OF GAS IN INDONESIA,
2010 - 2014
(Equipped with Acceleration of City Gas)
February, 2010

1. INTRODUCTION 4.4. Development of Investment in ESDM

2. ENERGY IN INDONESIA sector, 2004-2009
2.1. Hydrocarbon conclave in Indonesia 4.5. Production of Fossil Energy progress,
2.1.1. Oil and Gas Reserve 2004-2009
2.1.2. Coal Resource, Reserve, and 4.6. Progress status of non-fossil energy
Terminal 2004 - 2009
2.1.2.1. Potency and Location 4.7. Performance of biofuel development,
Plan for Coal 2004-2009
Liquefaction 4.8. Development of National Electricity
2.1.2.2. Coal Bed Methane System, 2004-2009
(CBM) Indonesia 4.8.1. Electricity Investment Needs,
2.2. Resource and Production of fossil 2010-2014
energy 2008-2009 4.8.2. Rural electricity progress 2006 –
2.2.1. Progres Status of Non Fosil 2009
Energy 2008-2009 4.8.3. Man power absorption 2004 -
2.2.2. Potency of Geothermal in 2009
Indonesia
5. RESOURCE AND EXPLOITATION OF
3. GENERAL POLICY OF ENERGY IN NATIONAL OIL AND GAS
INDONESIA, 2002-2025 5.1. Development of Oil and Gas Reserve
3.1. Energy Diversification (Primary) (Proven) 1993-2008
3.1.1. Energy Conservation 5.1.1. Oil and Gas Resource in
3.1.2. Investment Incentive for Indonesia as of 2009
Domestic fuel supply 5.1.2. Development of Oil Reserve
3.1.3. Acceleration of Value Added 1993-2008
National Energy 5.1.3. Development of Natural Gas
3.2. Obligation of minimum utilization of Reserve 1993-2008
biodiesel 2009 – 2025 5.2. Oil and Gas Upstream Activity in
3.2.1. Obligation of minimum Indonesia
utilization of bioethanol 2009– 5.2.1. Exploitation of Oil and Gas
2025 Resource
3.2.2. Obligation of minimum 5.2.2. Oil and Gas Exploration Area
utilization of pure vegetable oil 5.2.3. Performance of upstream oil and
2009 – 2025 gas 2008-2009
3.2.3. Target of Domestic goods and 5.2.3.1. Contribution of Oil and
services utilization 2025 Gas in Nation’s Revenue
3.2.4. Target of National Human 2003-2009
Resource utilization 2025 5.2.3.2. Oil and Gas Yield Spread
3.3. Projection of Energy Needs in Fund
Indonesia, 2025 5.2.3.3. Investment and Oil and
3.3.1. Progress of Energy Mix Target Gas Work Area 2009
(Primary) 2025 5.2.3.4. Winner & KKS WK Oil
and Gas & GMB 2008/
4. THE ROLE OF ENERGY AND MINERAL 2009
IN THE NATIONAL ECONOMY 5.2.3.5. Acceleration of Seismic
4.1. Investment Needs for ESDM sector 2D & 3D Survey
development 2010-2014 realization 2003-2009
4.2. Energy and Mineral Contribution For 5.2.3.6. Exploration and new well
Nation’s Revenue, 2008-2009 finding 2003-2009
4.2.1. Development of Nation’s 5.2.3.7. Drilling development
Revenue 2004-2009 2005-2009
4.2.2. Regional Yield Spread Fund 5.2.3.8. Cost Recovery and
4.2.3. Comunity Development Production Cost 2002-
4.2.4. ESDM Balance Sheet 2008
development 2004-2008 5.2.3.9. Recapitulation of WP&B
4.3. Realization of Energy Subsidy 2008- Exploration 2009
2009 5.2.3.10. Recapitulation of WP&B
4.3.1. Development of Energy Subsidy Exploitation/Production
2004-2009 2009

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 5.2.3.11. Production of Well
(New) 2008 and On
Stream field 2009
5.2.3.12.Realization of oil and gas
production and Lifting
2008-2009
5.3. Profile of Oil and gas production in
Indonesia
6. GAS RESERVE AND INFRASTRUCTURE
IN INDONESIA
6.1. Development of Gas Reserve in
Indonesia 1993-2009
6.1.1. Infrastructure of National Gas
(As of 2009)
6.2. Gas Refinery in Indonesia (Existing) As
of 2009
6.2.1. Gas Refinery according to
Operator and type of process
6.3. Gas Pipeline in Indonesia
6.3.1. Grissik-Duri pipeline
6.3.2. Gas Transportation System
Sumatera and Natuna
6.3.2.1. Gas Transmission
System of South
Sumatera – West Java
6.3.2.2. Gas Transmission System
of East Java
6.3.2.3. Gas Transmission System
of Bontang – East
Kalimantan
6.3.3. Gas Transmission System of
Sulawesi
6.3.4. PGN Gas pipeline
6.3.5. Master Plan of Gas Transmission
and Distribution in Indonesia
7. GAS PRODUCTION & UTILIZATION IN
INDONESIA
7.1. Potency and Role of Gas in Indonesia
7.2. Price Ratio of Gas against Oil
7.3. General Description of Supply &
Demand of Gas in Indonesia 2000-2008
7.4. Condition of Domestic Gas Allocation
7.4.1. Acceleration of Domestic PJBG
2003-2009
7.4.2. Domestic Gas fulfillment VS Gas
Export 2002-2009
7.5. Realization of Natural Gas production
2009
7.5.1. Production & Utilization of Gas
in Indonesia 2000-2009
7.5.1.1. Natural Gas Production
according to Operator
2005- 2009
7.5.1.2. Gas Utilization according
to Operator 2000- 2009
7.5.2. Additional Gas Production
Potency
7.6. Progress of Gas Development in
Indonesia (As of 2009)
7.6.1. Potency of Gas Additional
Production 2009
7.6.1.1. GN & three LNG
Receiving Terminal
projects (status 2009)
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8. LNG PERFORMANCE IN INDONESIA
8.1. LNG production in Indonesia 2006 –
2009
8.2. LNG market of Indonesia
8.3. LNG export price of Indonesia
8.4. LNG export
8.5. Progress of LNG contract extention
finalization of RI – Japan 2011 – 2021
8.6. Trade offs Donggi Senoro development
8.7. Controversy and initial export of
Tangguh project
8.7.1. Chaos of Tangguh price formula
8.7.2. Initial export
8.8. Masela development progress
9. NEEDS AND AVAILABILITY OF GAS
DOMESTIC SUPPLY
9.1. Gas for Electricity 2009 – 2018
9.1.1. PLN and National Electricity
System
9.1.2. Trends of primary energy for
PLN power plant
9.1.3. The cost of primary energy
for power plant
9.1.4. Natural gas consumption of
PLN
9.1.5. Additional power capacity plan
2009 – 2018
9.1.6. Projection of primary energy
needs for power plant 2008 –
2018
9.1.7. Projection of gas portion in
PLN energy mix 2009 – 2018
9.2. Gas and revitalization of national
fertilizer industry
9.2.1. Investment needs of fertilizer
revitalization phase I and II
9.2.2. Revitalization schedule
(tentative) phase I and II (2008 –
2024)
9.2.3. Fertilizer factories in Indonesia
9.2.4. Urea supply and demand in
Indonesia 2008 – 2016
9.2.5. Production capacity
revitalization of five fertilizer
factories (Phase I)
9.2.6. Gas needs for fertilizer
revitalization phase I and II
9.3. Domestic gas needs
9.3.1. Domestic gas industry
9.3.2. PGN, export, and domestic
industry gas supply
9.3.3. PGN customer growth 2002 –
2008
9.3.4. PGN gas consumption and
based on the industry segment
9.3.5. Projection of PGN gas needs
2009 – 2011
9.3.6. Projection of domestic gas
needs until 2020
10. INDONESIAN FUEL
10.1. General condition of fuel utilization
in Indonesia
4
 10.1.1. Energy mix and fuel 11.3. Parameter of Kerosene Convertion to
consumption reducement Natural Gas (Java & Outside Java)
target 2006 – 2010 11.3.1. City gas and gas needs for
10.1.2. Primary energy domestic household fuel conversion
supply 11.3.2. Natural Gas Economy
10.1.2.1. Final energy 11.3.3. Number of household served
consumption based from the conversion to
on type natural gas
10.1.2.2. Final energy 11.3.4. Acceleration of city gas
consumption based development for household
on sector 11.3.4.1. Initial plan of gas
10.2. Domestic fuel policy network location
10.2.1. Supplying and servicing PSO development
and non-PSO fuel (supply 11.3.4.2. Potency of city gas
and demand of domestic fuel) supply
10.2.2. Procurement of certain type 11.3.5. Road Map to gas
of fuel infrastructure development
10.2.3. Phase and realization of for household
kerosene conversion to LPG 11.3.6. City gas study
10.2.4. Specification and continuity 11.3.6.1. Investment
of fuel supply estimation for gas
10.3. City gas policy for household infrastructure for
10.3.1. Legal protection for 1,000 households
household city gas 11.3.6.2. Gas Selling Price
10.3.1.1. City gas network and investment
development return (1,000
scheme housholds)
10.3.1.2. City gas 11.3.6.3. Ten Cities of Gas
Management uction Development
was carried out Opportunity
through open tender
12. PROSPECT AND CONCLUSION
11. CITY GAS 12.1. General description of resource and
9.1. General description of existing city domestic oil and gas performance
gas 12.1.1. Oil and gas policy
11.1.1. Existing distribution pipeline 12.1.2. Natural oil business activity
network 12.1.3. Natural gas business activity
11.1.2. City gas growth based on 12.2. Government and oil and gas
sales volume and customer upstream and downstream business
1990 – 2007 improvement effort
11.2. Fuel Consumption of household in 12.3. Opportunity and success ratio of oil
Indonesia and gas development in Indonesia.
11.2.1. Natural gas consumption of
household 2000 - 2007 Attachment:
11.2.2. Gas utilization for household
1998 – 2008 UU N0. 21/ 2002 About Oil and Gas KKKS
Production and Exploration 2009

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Study :
PERFORMANCE AND BUSINESS OPPORTUNITY OF GAS IN INDONESIA,
2010 - 2014
(Equipped with Acceleration of City Gas)
February, 2010

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