Presentation Transcript

1. 2nd Annual CNG/NGV Asia Pacific Forum The re-emerging of Indonesia’s CNG/NGV industry Presented by: Robbi R SukardiAPCNGI member and PT. PetrossGas director
2. CONTENTS : The Past Story of Indonesia’s CNG-NGV industry Current Developments DKI Provincial Government Busway CNG Pilot Project The Confronted Challenges and Success Factors for Indonesia’s Successful CNG/NGV industry future developments
3. The Past Story of Indonesia’s CNG-NGV industry (1986 – 2005 )
4. WHAT HAPPEN ? Slow development, in fact, can be said that not much had happen over the past 2 (two) decades for Indonesia’s NGV industry.
5. NUMBER NGV IN ASIA YEAR 2002 source data : angva
6. Current Developments ( 2005 – Today )
7. YEAR 2004 – YEAR 2005 The domestic oil production had shown a decline over the years (est. 1 million barrel per day) Indonesia barely becoming a net oil importer country rather than an oil exporter country (national consumption at estimated 1,1 million barrel per day) Continuous increase in the number of vehicles (on average 7% - 8% yearly); The Indonesia’s Government reduced the subsidize budget for the nation’s petrol fuel (2005); Increase of pollutant level from vehicle emission particularly in DKI Jakarta (third most pollutant city in world); World’s oil price had shown increase and by mid year of 2008 the world’s oil price reached its highest point ever; The Indonesia’s Government responded to this situation through endorsing alternative energy like bio-fuel and also increase CNG fuel for the transportation sector
8. YEAR 2005 – Government Policy & Regulation Events affecting the CNG Industry Republic Indonesia’s Presidential Instruction (In. Pres.) Decree no. 10 year 2005 regarding national energy conservation and savingenactment. Indonesia’s Ministry Mines & Energy Policy (Kep. Men.) no. 0031 Year 2005 regarding the implementation procedural in national energy saving, in which in point 5 clause 2 of the decree specifically states on the endorsing CNG for the public transportation sector. DKI Provincial Governor Instruction (Kep. Gub.) decree no. 77 year 2005 pertaining to the energy saving program in the DKI Jakarta Provincial area. DKI Provincial Government (Per.Da) decree no. 2 year 2005 regarding the monitoring of air pollution in which article 20 mandates on the use of CNG on all public transportation and Government use transportation.
9. YEAR 2005 – Commercial Events affecting the CNG Industry The upstream gas producer increased natural gas price from previously average at $2.2/MMBTU to around $5.00/MMBTU. High cost of maintenance and limited NGV vehicles (estimated less than 1.000 units in Jakarta remain operational) had cause many of the existing CNG station to incurred significant operational loss. In June, subsidy for the nation’s petrol fuel was reduced significantly causing more than 100% increase in premium fuel and diesel fuel sale price in the market. DKI provincial government mandate that all new buses for the plan’s 15 corridors of the Mass Rapid Transportation-Busway system to use dedicated gas engine fuel system. Pertamina announce to allocate next year budget to revitalized the existing Pertamina’s station in DKI Jakarta area.
10. YEAR 2006 – Government Policy & Regulation Events affecting the CNG Industry Based on the Indonesia’s President (In. Pres.) decree no. 5 year 2006 and through the Department of Mines & Energy, the National Energy Blue Print for 2005-2025 was established in which partly signifies government enforcement to use alternative fuel other than petrol fuel for the nation’s fuel consumption. The DKI government mandates that all 3 (three) wheel Bajaj vehicles will be replaced with the new environmental friendly CNG Bajaj. YEAR 2006 – Commercial Events affecting the CNG Industry On February 1st, Pertaminaincreased its CNG sale at all Pertamina’s pump station from previously Rp. 1.550/ple to toRp. 3.000 /ple, in which said considered as their economical price. On March 2nd, the Department of Transportation launched a public relation program to promote the usage of CNG fuel for transportation in Pertamina’s CNG Station in Margonda, Depok. On May 20thIndonesia’s President, Mr. SusiloBambangYudoyono, open a ceremony to promote and induce the use of NGV in Petross CNG fueling Station, which was DKI’s first dedicated CNG station for the busway program. The Department of Transportation announced that they had allocated a budget to provide up to 4,000 converter kits to be distributed for the public transportation. Pertamina’s director issued a directive letter no. 023/C00000/2006-S3 dated 31 July 2006 directing that the new sale price of CNG at Pertamina’s station to be Rp. 2.562/ple.
11. 20 MAY 2006 20 May 2006 – Jl. Perintis Kemerdekaan Petross & Transbatavia pool bus Indonesia’s President, Mr. Susilo Bambang Yudoyono, open the “Initiation Ceremony to Promote and Support the use of CNG Fuel for Vehicles” ”Let us together, with full support from the Governor, to accelerate the development of new CNG station infrastructure. This is needed to minimize the filling time then previously done before..... the government supports this CNG program and shall encourage natural gas price reduction, distribute free conversion kit, and reduction in electrical cost from PLN by ways of changing the tariff category for CNG pump station. In addition, we shall push for lower import tariffs and taxes for CNG applications, and reduction in toll fee of natural gas from PGN.” (Presidential speach script)
12. Year 2007 to Present – Government Policy & Regulation Events affecting the CNG Industry DKI Provincial Government Decree no. 141 year 2007 regarding the mandate to use CNG for all public transportation and DKI’s Provincial Government vehicles. Year 2007 to Present – Commercial Events affecting the CNG Industry In 2007, the Department of Transportation conducted the first batch of Converter Kit tender to distribute and installed 1,755 units of converter kits for taxi’s within the DKI Jakarta area. On February 21st, the re-launching program of NGV usage was held by the Department of Transportation and opened by the Vice President, Mr. Yusuf Kalla. In 2008 and 2009, the Department of Transportation continue to promote CNG as an alternate fuel with distributing the another 1,200 units of converter kits for taxi’s in DKI Jakarta area, and plan an additional 1,000 units for small public transportation vehicles (Angkots) for the city of Bogor and another 500 for the city of Palembang. The Mass Rapid Transportation Busway System in Jakarta now has around 329 CNG busses supporting the 7 operational corridors.
13. Current NGV Markets in Asia Pacific (Source: Asian NGV Communications & GVR magazines & Others) / PTT Presentation slides data report 13
14. YEAR END 2008 – DKI JAKARTA PUBLIC TRANSPORTATION (Source: DKI Jakarta Department of Transportation 2009 data report)
15. (Source: Asian NGV Communications & GVR magazines Aug ‘08 & Others) and adopted from PTT presentation slides
16. WHERE INDONESIA IN THE DEVELOPMENT STAGES 1989 - 1992 1986 -1987 Master Planning Commercialization 2006 - current 1988 -1989 2007 - ?? Pilot Programme Market Development 1990 - 1992 Regulatory Enactment NGV Developed 2005 -2007 Public Relations Mature Market 2006-2007
17. DKI Provincial Government Busway CNG Pilot Project
18. DKI’S JAKARTA TRANSPORTATION SECTOR CONDITION: A continuous increase in the number of vehicle by 7-10% yearly. An estimated 6 million vehicles in DKI Jakarta, which 600.000 of the vehicles (1,2 mil people) enters from the outside Jakarta daily. Around 669 of new car registration application are requested daily. New road developments is very low (around 1% annum) compare to new vehicles. The daily mobilization of vehicles in Jakarta reached 4,95 mil (motorcycles 53%, private vehicles 30%, buses 7%, and trucks 10%). The ratio between Public Transportation and Private Vehicles is 98% to 2%. 85% of the usage of the road from vehicles are used by private vehicles. Degradation and diminishing number of the public transportation. (Source: DKI Jakarta Department of Transportation Report) Mass Rapid Transportation Busway System as Solution
19. DKI JAKARTA ENVIRONMENTAL FACTS: Considered as the Third World’s Most Polluted City in the World after Mexico City and Bangkok (BadanLingkunganHidupDunia/UNEP) 67% of the pollution in Jakarta was due to the emission from vehicles. (UNEP) A yearly estimated economic lost of Rp 12 trillion is lost due to high traffic jam, production time, and fuel evaporation (YayasanPelangi, 2003) Bus TransJakarta using an environmental friendly fuel : Compressed Natural Gas Fuel
20. NUMBER OF TRANSJAKARTA CNG BUSES (2008)
21. CNG STATION PERTAMINA JL. PLUIT CNG STATION PETROSS RAWA BUAYA CNG STATION PETROSS JL. PERINTIS CNG STATION DAVALTI DAAN MOGOT CNG STATION PERTAMINA JL. PEMUDA CNG STATION T ENERGY PINANG RANTI CNG STATION PERTAMINA JL. PASAR MINGGU CNG STATION PERTAMINA GANDARIA CNG STATION AKSARA JL. HEK : Operational CNG STATION AKSARA KMP. RAMBUTAN : Non Operational
22. TRANSJAKARTA’s AVERAGE MINIMUM CNG CONSUMPTION On average each bus consumed 1 ple of CNG for every 1.3 km – 1.5 km distance. Estimated 50,000 – 60,000 ple consumed daily to support the busway’s operational. Filling time is a constraint during the afternoon filling time as the buses usually filled at a certain similar given time so the buses can be in operational again during the busway’s peak hours (7.00 -10.00 and 16.00 – 19.00) Filling space is also a concern as each busses is 6 meters long and enters the station numbering on average 5 buses per batches.
23. TRANSJAKARTA BUSWAY – DKI PAYMENT SCHEME BUSWAY USERS TICKETING SALE FROM BUSWAY (@Rp. 3,500.-) SUBSIDY BADAN LAYANAN UMUM (BLU) TICKETS REVENUE BUSWAY OPERATORS ARE PAID BY JAKARTA’S BLU TRANSJAKARTA BASED ON KILOMETER RATE ACHIEVED PER MONTH PT. JET (KORIDOR I) PT. TB (KORIDOR II & III) PT. JTM (KORIDOR IV & VI) PT. JMT (KORIDOR V & VII) PT. LRN (KORIDOR VIII) PT. PRJ (KORIDOR VIII) Pertamina’s and Private CNG Stations @ Rp. 2,562/ple Pertamina Diesel Fuel @ Rp. 4,300/ltr
24. The Confronted Challenges and Success Factors for Indonesia’s CNG/NGV Industry Future Developments
25. What are Indonesia’s NGV Success Factor & Challenges? SUCCES FACTORS CHALLENGES Availability of abundant natural gas reserves Infrastructure Pricing Policy Availability of funds Market Awareness & Acceptance Industry & Regulator Body Support
26. Availability of abundant natural gas reserves AVAILABLE 2004 Production Year Dimished Energy fuel Proven Total Reserve Oil Coal Indonesia has the largest supply of natural gas among its South East Asia neighbor countries In 2006 gas production was recorded at 8,280 MMSCFD. In 2007, gas production increase to 8,901 MMSCFD of which 37% for domestic and 63% for export. In 2009 is estimated that over 10,000 MMSCFDwill be produce. Source: BP Migas and Indonesia Petroleum Report 2005-2006 and Department Mines & Energy Indonesia Energy Blue Print Report & 2009 Data Report
27. Infrastructure Infrastructure NOT ENOUGH & NOT WIDELY SPREAD BLUEPRINT PENGELOLAAN ENERGI NASIONAL 2005 – 2025 Dept. ESDM
28. PRICING POLICY Regulatory Basis: UU Migas 2001 vsPertamina Pricing Policy? The deregulation of the Oil & Gas industry in 2001 had open up Indonesia’s market to local & foreign enterprise to conduct business under the basis of market economics principles
29. CNG VALUE PROCESS LINE ECONOMIC / PRICE FACTORS NATURAL GAS AT WELL (INDONESIAN GOVERNMENT) Country’s natural gas availability World’s oil & natural gas price Market demand size Onshore vs. Offshore Economiesof scale size of the well Natural gas composition Capacity & size of refinery facility Tender process priced obtain EXPLORATION & PRODUCTION (NATURAL GAS PRODUCER) Economics of scale size transported Distance to targeted area Difficultness to transport area Tender/Contract price obtain TRANSPORT & DISTRIBUTION (PIPELINE OWNER) Volume of pressure obtain Compression ability (fast vs. slow fill) Location of the station Power supply availability Gas composition Supply gas purchase COMPRESSION (STATION OWNER)
30. PRICING POLICY Regulatory Basis: UU Migas 2001 vsPertamina Pricing Policy? The Deregulation of the Oil & Gas industry had open up Indonesia’s market to local & foreign enterprise to conduct business under the basis of market economics principles Natural gas base price and pipeline toll fee is monitored and semi-regulated by BPH Migas, but who regulate and monitor the CNG selling priceat filling station? The pricing policy is based on the Minister of Mines & Energy Decree (KeputusanMenteri ESDM), which in the decree pipeline pricing policy for the transportation sector has not yet been clearly stipulated and categorized.
31. ECONOMIC / PRICE FACTORS POLICY HOLDER NATURAL GAS AT WELL (INDONESIAN GOVERNMENT) Country’s natural gas availability World’s natural gas price Market demand size Parliament/Legislator Approval Central Government (President) Local Government Onshore vs. Off shore Economics of scale size of the well Natural gas composition Capacity & size of refinery facility Tender process priced obtain EXPLORATION & PRODUCTION (NATURAL GAS PRODUCER) Department of Mines & Energy BP Hulu(Upstream) Migas Company’s Shareholder & BOD Economics of scale size transported Distance to targeted area Difficultness to transport area Tender/contract price obtain TRANSPORT (PIPELINE OWNER) Department of Mine & Energy BP Hilir(Downstream) Migas Company’s shareholder & BOD Volume of pressure obtain Compression ability (fast vs. slow fill) Location of the station Power supply availability Gas composition Supply gas purchase COMPRESSION (STATION OWNER) Company’s shareholder & BOD
32. PRICING POLICY UNCLEAR Regulatory Basis: UU Migas 2001 vsPertamina Pricing Policy? The Deregulation of the Oil & Gas industry had open up Indonesia’s market to local & foreign enterprise to conduct business under the basis of market economic structure Natural gas base price and pipeline toll fee is monitored and semi-regulated by BPH Migas, but who regulate and monitor the CNG selling pricing at filling station? The pricing policy is based on the Minister of Mines & Energy Decree (KeputusanMenteri ESDM), in which pipeline pricing policy for the transportation sector has not yet been classified in a decree CNG selling price at filling station is at a set price for the Transjakarta’s busway, but how about CNG selling price for other vehicles vs CNG selling price in cities other than DKI Jakarta? At what price should private enterprise sell CNG at their station for the transportation sector?
33. AVAILABILITY OF FUNDS WITH CONDITIONS Macro Economy & Political Stability: World’s financial crisis occurred in 2007-2008 had not affect much of the country’s economy. Past 2 years, the Indonesia’ federal reserve bank (Bank Indonesia) has continued to lower its treasury interest rate (SBI). Local banks are currently liquid. Rupiah currency has indicate stable and strong positioning this past weeks. Presidential election proceeded swiftly andsafely with minor disruption Industry and Market Demand condition CNG Filling Station and the NGV market still has a lot of potential growth market 8 Existing Stations + 4 New Stations have an estimated capacity compression of 17.400 ple / hour Or an estimated daily (18 hours) compression capacity of 313.000 ple / day or 11 MMSCFD
34. AVAILABILITY OF FUNDS WITH CONDITIONS ROI factors to be considered … EQUIPMENT INVESTMENT Volume Pressure Obtain  compressing stages Compression ability  fast or slow fill / # of dispenser Availability of power supply  gas or electric driven Gas composition  with or without gas dryer Macro Economy & Political Stability Factor: World’s financial crisis occurred in 2007-2008 had not affect much of the country’s economy. Past 2 years, the Indonesia’ federal reserve bank (Bank Indonesia) has continued to lower its treasury interest rate (SBI). Local banks are currently liquid. Rupiah currency has indicate stable and strong positioning this past weeks. Presidential election proceeded swiftly andsafely with minor disruption. Location  Owned or Rent Land Size  large vehicles or small vehicles LAND & CIVIL DEVELOPMENT Certification Approval - Migas or Depnaker Local Government Approval CERTIFICATION & APPROVAL PGN or Pertamina or other Contract terms  Rupiah or USD base GAS SUPPLY Industry and Market Demand Factor: CNG Filling Station and the NGV market still has a lot of potential growth market Power supply  electric or gas bill Cost of money  high or low leverage OPEATIONAL COST Government regulation to support and to promote the use of NGV exist. Gas supply from PGN is available. Return on Investment  IRR and Payback period Taxes PROFIT MARGIN Return on Investment Factor:
35. MARKET AWARESS & ACCEPTANCE LOW ACCEPTANCE Although, Indonesian society are becoming more concern for a cleaner and friendly environment as well are more aware of global warming threat whereby petrol fuel emission contributes the most pollutant for the city air. Bike to Work Group. Closing of Jakarta’s city main road during every weekend morning. However, In terms of their choices of fuel, majority will choose cheapest price and practical. Vehicle owner will be willing to fill CNG fuel but are hesitant to buy the converter kits. Not only vehicle owner will be willing to convert their vehicles if converter kits are cheap or free but also if it is practical to fill CNG fuel in every 5 km radius. Most of people in Jakarta understood CNG only as the fuel for the Transjakarta-Busway and some taxi’s owner. In other cities outside Jakarta in fact do not realize CNG can be an alternative fuel for vehicles and that mostly understood natural gas are pipeline gas for industrial usage and misunderstood between CNG and LPG are different commodities.
36. GROWING SUPPORT INDUSTRY & REGULATORY BODY SUPPORT The NGV industry is gaining a lot of support from DKI Provincial Government commitment in using CNG as their choice of fuel for its Transjakarta’s busses. The NGV industry is receiving real action implementation from the Department of Transportation through the distribution of converter kits for public transportation in cities like Jakarta, Surabaya, Bogor, Palembang, and other cities to come. Provincial governments and county governments regulatory support on CNG. NGV groups like ANGVA and APCNGI establishment and presence have and will continue strengthen the NGV market growth in Indonesia also increase public awareness on new CNG technologies and CNG safety issues.
37. As an Conclusion, if Indonesia shall able to manage the : SUCCES FACTORS A PRICING POLICY STRUCTURE THAT WILL BENEFIT ALL STAKEHOLDERS Availability of abundant natural gas reserves Infrastructure Pricing Policy Availability of funds Market Awareness & Acceptance Industry & Regulator Body Support INCREASEMARKET AWARENESS THROUGH INTENSIVE PUBIC RELATION & MEDIA PROGRAM then …
38. Then Indonesia’s NGV market will succesfully re-emerge and go forward to the next stage of development 1989 - 1992 1986 -1987 Master Planning Commercialization 2006 - current 1988 -1989 2007 - ?? Pilot Programme Market Development 1990 - 1992 Regulatory Enactment NGV Developed 2005 -2007 Public Relations Mature Market 2006-2007
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