1. Gas Development Master Plan
Steering Committee Meeting – 28 March 2012
Draft Policy Note 3 : Identification of Policy Gaps and
Recommendations for Policy Action

2. 2
Outline
• Available documentation
• Current roles and responsibilities
• Exports and domestic use
• PSC extension issue
• Co-ordination and implementation plans
• Recommendations

3. 3
Available documentation – National Gas
Balance
KEMENTERIAN ENERGI DAN SUMBER DAYA MINERAL
NERACA GAS BUMI INDONESIA
2012-2025
REPUBLIK INDONESIA

4. 4
Available documentation – National Master
Plan for Gas Pipelines

5. 5
Current roles and responsibilities
GAS
SUPPLY
CHAIN
MEMR/MIGAS
BPH MIGAS
SKK MIGAS
BAPPENAS
NATIONAL
ENERGY COUNCIL
MINISTRY OF
PUBLIC WORKS
MINISTRY OF
HOME AFFAIRS
MINISTRY OF
TRANSPORTATION
MINISTRY OF
AGRICULTURE
MINISTRY OF
FORESTRY
MINISTRY OF
ENVIRONMENT
MINISTRY OF
LAW AND HR
MINISTRY OF
SOE'S
CHAIRMAN OF
NATIONAL LAND BOARD
GOVERNORS
REGENTS/
MAYORS
MINISTRY OF
FINANCE
COORD MINISTER
ECONOMY
MINISTRY OF
INDUSTRY
Based on Presidential Decree No. 2 of 2012

6. 6
Domestic and export volumes
Source: Ministry of Energy and Mineral Resources

7. 7
Options for switching export to domestic
market
•Recent past: Gap between gas volume exported and sold
domestically has narrowed over past 10 years. Today gas
exports and domestic almost in balance.
•Future challenge: Domestic demand for gas likely to
continue growing (but may be impacted by higher
domestic gas price). Should gas exports be reduced and
possibly eliminated in order to meet this demand?
•GDMP model analysis: Model being developed will
quantify value to be derived from nation’s gas reserves
and resources when used domestically and exported

8. 8
Domestic and export benefits
EXPORT BENEFITS DOMESTIC BENEFITS
• Foreign exchange/high
prices
• High credit-rated buyers
• Leverage/geo-political
advantage
• Value added for industries
• Increased certainty gas
supply for infrastructure
developers
• Lower GHG emissions
• Substituting gas for oil in
transport reduces oil
subsidy

9. 9
PSC extension issue
•Uncertainty is constraining both investment and gas
production
• 40% of operating PSC’s expire over next 11 years
• No clear deadline by which Government must decide if
extension approved (and if any conditions)
• Should local Governments (BUMD’s) seek to extend
share beyond 10%, who will decide this and what are
implications for future project funding

10. 10
GAS FOR TRANSPORTATION
Investors need to know how
committed GOI is to ensuring gas is
available and targets set for each
transportation sector (public,
commercial, private, etc)
Co-ordination and implementation plans
LNG REGASIFICATION TERMINALS
FSRU projects: Jakarta, Medan,
Lampung, Semarang, East Java
Need more co-ordination in
decision-making across supply
chain and identification of who is
accountable for meeting targets,
deadlines, etc

11. 11
Policy Recommendations
• Government (MIGAS) to share information on sources of
data and assumptions behind forecasts. This will assist
investors to formulate business cases for new projects to
encourage:
• New supplies of gas to be brought on stream
• New gas infrastructure to be built
• End users of gas to locate new facilities close to where gas is
accessible, where possible
• Issue regulation clarifying PSC extension process
• Prepare road map for increased use of gas in transport
sector (milestones, target)
• Establish a new GOI body to formulate a fully integrated
gas supply chain development plan
• Land access and permitting – Enable projects of strategic
importance to access support from GOI unit which can
facilitate this process with local communities