Gas Development Master Plan

1. Gas Development Master Plan Structure of the Demand and Supply Scenarios (DASS) Component Capacity Building Workshop Bali, 1-2 July 2013

2. Presentation Outline Outline of the Demand and Supply Scenario (DASS) Descriptions of each part of DASS: • Input sheets • Control panel • Calculations sheets • Outputs and results

3. Outline of DASS INPUT DATA SCENARIOS CALCULATION OUTPUTS Demand calculation sheet Demand by region and by sector Demand input sheet Supply input sheet Supply calculation sheet Supply-demand graph (initial) TIM Global parameter sheet Annual production by region CONTROL PANEL Export input sheet Price calculation sheet Price input sheet Revenue calculation sheet Government revenue Adjustments sheet Supply-demand graph (adjusted) Input from TIM

4. Input Sheets in DASS – Overview Key issues: selecting data to be used as parameters in the model, and processing the raw data to match inputs required in the model Hard coded data sheets, some allows for different scenarios, for example: • Industrial demand has base case, low and high cases based on MIGAS estimates of contracted, committed and potential demand figures • Base case, low and high cases for production profiles for each region • Different price scenarios based on IEA crude oil or based on natural gas imports • Different estimates for GDP growths and elasticity INPUT DATA Demand input sheet Supply input sheet Global parameter sheet Export input sheet Price input sheet

5. Input Sheets in DASS – Demand assumptions Power sector: • Used PLN RUPTL gas demand estimates up to 2020 • Projected to 2070 using income elasticities Other demand sectors: • Used MIGAS gas balance for demand estimates up to 2025 • Projected to 2070 using income and price elasticites and domestic gas price growth INPUT DATA Demand input sheet Supply input sheet Global parameter sheet Export input sheet Price input sheet

6. Input Sheets in DASS – Export assumptions • Use MIGAS gas balance data on “contracted” export volumes for each regions for up to 2025 • Projected to 2070 using assumed export growth rates, differentiated between pipeline export and LNG • These figures will be adjusted based on unmet demand and excess supply from TIM INPUT DATA Demand input sheet Supply input sheet Global parameter sheet Export input sheet Price input sheet

7. Input Sheets in DASS – Supply assumptions • Using estimated production figures for each region for: • Existing gas productions • Gas production in development • Potential gas development • Estimates of low and high cases using assumed percentages to reduce (for low case) or increase (for high case) production INPUT DATA Demand input sheet Supply input sheet Global parameter sheet Export input sheet Price input sheet

8. Input Sheets in DASS – Price assumptions • Using data from: • IEA world energy outlook as base data to calculate growth rate • Use current domestic wholesale gas price • Different growth rates scenarios can be chosen INPUT DATA Demand input sheet Supply input sheet Global parameter sheet Export input sheet Price input sheet

9. Input Sheets in DASS – Global parameters Hard coded inputs for parameters such as: • Income elasticities • GDP growth rates • Price elasticities Provides for three levels of scenarios: base case, low case and high case INPUT DATA Demand input sheet Supply input sheet Global parameter sheet Export input sheet Price input sheet

10. Control Panel – Scenario Selection A separate sheet where users can select demand, production, price and policy scenarios SCENARIOS CONTROL PANEL Dropdown menu to select demand scenarios: base/low/high Individual demand scenarios for different demand sectors Dropdown menu to select policy scenario, domestic or export priority Dropdown menu to select price scenarios Dropdown menu to select production scenarios: base/low/high

11. Calculations Sheets in DASS – Overview Key issues: some calculations need to be done in several steps to avoid long complicated formulas Different calculations sheets to calculate: • Demand projection • Export projection • Production/supply projection • Government revenues Results are recorded in a separate sheet for either: • Transfer to TIM, or • Graphs representations CALCULATION Demand calculation sheet Supply calculation sheet Price calculation sheet Revenue calculation sheet Adjustments sheet

12. Calculations Sheets in DASS Demand: • Demand growth = income elasticity x GDP growth + price elasticity x domestic price growth Supply: • Takes into account production and remaining reserves in each regions Government revenue = Government revenue from exports – Cost of unmet domestic demand + Economic value of gas consumed CALCULATION Demand calculation sheet Supply calculation sheet Price calculation sheet Revenue calculation sheet Adjustments sheet

13. Outputs of DASS – Initial Demand and Supply OUTPUTS Demand by region and by sector Supply-demand graph (initial) Annual production by region Government revenue Supply-demand graph (adjusted)

14. Outputs of DASS – Gas Balance before and after Example from Central and South Sumatera OUTPUTS If transfers exceed production, could mean that this region imports gas and then transfer to other region(s) Grey area shows excess supply from this region Demand by region and by sector After running TIM, excess supply is now transferred (purple bars) to other region(s) Supply-demand graph (initial) TIM only runs to 2040 Annual production by region Government revenue Supply-demand graph (adjusted)

15. Outputs of DASS – Government Revenues Discounted costs, to 2050 OUTPUTS Demand by region and by sector Undiscounted costs, to 2070 – very large unmet demand (depends on scenario) Supply-demand graph (initial) Annual production by region Government revenue Supply-demand graph (adjusted)