Events and Presentations | Perusahaan Gas Negara Persero Tbk PT

Perusahaan Gas Negara
Investor Presentation
12M 2016 Update

Disclaimer:
The information contained in our presentation is intended solely for your personal reference. In addition, such information
contains projections and forward-looking statements that reflect the Company’s current views with respect to future
events and financial performance. These views are based on assumptions subject to various risk. No assurance can be
given that further events will occur, that projections will be achieved, or that the Company’s assumptions are correct.
Actual results may differ materially from those projected.
.

2

PGN Group and Ownership

56.97%

43.03%

Government of

Republic Indonesia

Public

Total Shares: 24,241,508,196
Incl. 1,850,000 Treasury Stock and 1 Seri-A Dwiwarna Share

Distribution

Transmission

Business Unit
Gas Product

Business Unit
Infrastructure

Gagas Energi
Indonesia
(GEI)


Transportasi
Gas Indonesia
(TGI)*

Kalimantan
Jawa Gas
(KJG)
*) TGI and NR are join control and unconsolidated

E&P

Saka Energi
Indonesia
(SEI)

LNG

Other
Operation


PGN LNG
Indonesia
(PLI)

PGAS
Telekomunika
si Nusantara
(PGASKOM)

Nusantara
Regas (NR)*

PGAS
Solution
(PGASOL)
Permata
Graha
Nusantara
(PGNMas)


3

Business Model
Leading Player in Indonesia Natural Gas Transmission & Distribution

GTA

GSPA

GSA

Gas Transportation Agreement
Between the gas transporter to
transport gas from supplier to
off-taker receiving point.

Gas Sales & Purchase Agreement
is an agreement whereas PGN purchase
an amount of volume from supplier.


Gas Sales Agreement
Between PGN as gas distributors
and customers.

4

Recent Government Policies and Regulations
July

November

2016

2016

December

2016


Central Bank Deputy Letter No.
18/5/DpG-DKSP/ Srt/B

Decree of Minister of
ESDM No. 40/2016

Government Regulation
No. 72/2016

Mandatory use of Rupiah in Indonesia

Gas Prices for Spesific Industry
i.e the fertilizer industry,
petrochemical and steel.

revised government regulation
No.44/2005 on procedure and
administration of the state
capital investment in SOEs and
Limited Liability Companies.


• Central Bank approved the postponement of
the implementation of mandatory use of
Rupiah proposed by ESDM.
• Postponement applies to oil and gas sector
including :
- Gas Transportation Fee
- Gas sales includes LNG regasification process
- Gas transportation tariff
• Postponement is valid until February 23, 2026
and effective starting 30 days after the
approval date

• Incentive is given considering
the use of gas as feedstock and
their strategic position to
support economy growth.
• Gas price for the three
industries was equal to
approximately USD6/MMBTU.


• Procedures for the transfer of
state ownership in an SOE to
other SOEs so as to constitute
parent-subsidiary company
relationships.

The Evolving of Gas Price Regulations
Decree of ESDM
Minister No. 40/2016

Third Economic
Policy Package
Lowering energy price
including gasoline,
electricity and gas price

Presidential Decree
No. 40 /2016
Decree of ESDM

Minister
No. 6 /2016

Determination of gas
price for seven industries
(specific users)

Guideline and procedure
to determine allocation,
utilization and price of gas

Decree of ESDM
Minister
No. 16 /2016

Gas prices for three specific
industries i.e the fertilizer,
petrochemical and steel
industry


Procedure for
determining the price for
specific users

November
2016
May 2016
June 2016

October 2015
February 2016

Network Infrastructure – Transmission & Distribution Regions

III
Medan
Duri

Batam
1


2

Palembang
4

3

5

Lampung
I

Jakarta

6

Semarang II Surabaya

1

Grissik – Duri Transmission Line

2

Grissik – Batam – Singapore Transmission Line

3

SSWJ Transmission Line

4

FSRU Lampung

5

FSRU Jawa Barat (NR)

6

Kalija I Transmission line

I

Western Java, Lampung, Palembang Distribution Network

Existing Pipeline

II

East Java Distribution Network

Planned Pipeline

III

North Sumatera, Riau Island Distribution Network

FSRU

6

Source of Gas
Bontang LNG
Pertagas

1,598 MMscfd
PGN volume delivery via distribution and
transmission pipeline in 12M-2016

Inti Daya Latu Prima
Ex. Jambi Merang

Tangguh LNG

Pertamina EP Asset 1
P. Susu Field

Pertamina EP Asset 1
Benggala 1 Field

Conoco Phillips
Corridor PSC

PHE WMO
West Madura Offshore PSC

Pertamina EP Asset 2
South Sumatera

Santos
Madura Offshore PSC
BBG&WNE, IKD, SNR
Ex TSB

Pertamina TAC Ellipse
Jatirarangon TAC
Pertamina EP
Asset 3

Lapindo Brantas
Brantas PSC

Husky CNOOC
Ex. Madura Strait PSC

Gagas Energi Indonesia
Ex. WMO PSC

Conventional Gas Sources, Major Gas Suppliers
Conventional Gas Sources
LNG Sources

7

Distribution Performance
865
795

807

824
802

803

Region III

(MMscfd)

11%
Region II
16%
Region I
73%
2011

2012

2013

2014

2015

2016
Distribution Region

Coverage Area

Region I

Western Java, Lampung, Palembang

Region II

East Java & Central Java

Region III

North Sumatera & Riau Islands

8

Serve All Segments
Industries and Power Plants

Households

Commercial & SME

97.23%

2.49%

0.28%

of total volumes

of total volumes

of total volumes

1,652

1,929

165,392

Customers

Customers

Customers

42.3%

Industrial Diversification
incl. Power Sector
13.9%
10.4%

9.5%
6.1%

*) Data as of December 2016/ 12M-2016

4.4%

4.2%

3.5%

2.2%

2.4%

0.6%

0.4%

0.1%

0.04%

9

Opportunity in Price Advantage
35

Natural Gas - avg PGN

8.55

PGN Average
Selling Price

HSD vs Natural Gas

16000

14000

30

LPG - 3 kg (Subsidized)

7.10
12000

MFO 180

12.25

LPG - 50 kg

12.36

25

15.17

8000

Rp/USD

Kerosene

USD/mmbtu

10000
20

15
6000

IDO/MDF/MDO

15.58

Gasoline 88

15.66

10
4000

5

LPG - 12 kg

2000

17.47

HSD

17.53

0

0

USD/MMBTU
HSD Unsubsidized Price

Natural Gas PGN Price

Exchange Rate

Note:
Fuel price Pertamina as of December 2016
Exchange rate USD 1 = IDR 13,436
* Subject to ICP

10

Transmission Performance
845

877
854

852

PGN
789

2%
795

(MMscfd)

KJG

12%

TGI

86%
2011

2012

2013

2014

2015

2016

Note:
*) As of January 1, 2015, PGN adopted PSAK 65 (Indonesian Statements of Financial Accounting Standards) regarding consolidated financial statements
whereby it reassessed its control over its entities and requires PGN to unconsolidate PT Transportasi Gas Indonesia (TGI).

11

Consolidated Statements of Comprehensive Income

In USD Million

December 31, 2016

December 31, 2015

Revenues

2,934.8

3,068.8

Cost of Revenues

2,047.8

2,105.7

Gross Profit

886.9

963.1

Operating Income

444.2

557.2

EBITDA

807.4

951.2

Net Income

304.3

401.2

12

Consolidated Statements of Financial Position

In USD Million

December 31, 2016

December 31, 2015

Current Assets
Non Current Assets

2,124.7
4,709.5

1,722.5
4,772.5

Total Assets

6,834.2

6,495.0

Current Liabilities
Non Current Liabilities
Total Equity

815.3
2,848.6
3,170.2

667.3
2,804.9
3.022.8

Total Liabilities And Shareholders Equity

6,834.2

6,495.0

Ratios

December 31, 2016

December 31, 2015

Net Debt / Equity

0.5

0.5

EBITDA / Interest Expense

6.1

8.8

13

Loan Composition
As of December 31, 2016

Credit Rating 2016
Wtd Avg
(after tax)

Baa3

4.53%
Fixed

63%

Float

Total Loan

37%

BB+

USD 2.77
billion
USD
87%

BBB-

JPY
13%

AAAid

Long-term loan sourced from developmental banks, bond proceeds and commercial banks.

14

Upstream Assets

C
H

I

K
D

F

G

E
A

J
B

A
Asset

% WI

Operator

Area (Km2)

Status

Contract
Expiry

A

Pangkah

100

SEI

784

Production

2026

B

Ketapang

20

Petronas

885

Production

2028

C

Bangkanai

30

Salamander

1,395

Development

2033

D

South Sesulu

100

SEI

625

Exploration

2039

E

Fasken (Texas)

36

Swift Energy

8,300 acres

Production

2050

FF

SES

8.9

CNOOC

6,082

Production

2018

G
G

Muriah

20

Petronas

2,823

Production

2021

H

West Bangkanai

30

Salamander

5,463

Exploration

2043

I

Muara Bakau

11.7

Eni

1,082

Development

2032

J

Wokam

100

SEI

K

Sanga-sanga

37.81*

SEI & Vico

Exploration
1,075

Production

2018

Strategic Benefits
•Increased security of gas supply in
Indonesia’s supply-constrained gas
market
•Future gas volume contribution from
projects coming online will drive gas
distribution volume and revenue
growth
•Natural hedge against future gas
price hikes and stronger pricing
power with gas suppliers

15

Upstream Assets
Portfolio Strategy
Field
Discovery

Building a portfolio of opportunities
Step Out
Exploration

Surrounding
Acreage

South East Sumatra PSC
Offshore South East Sumatra

 Enhanced technical insight
 Operational flexibility
 Financial synergies

Low risk exploration
using subsurface
knowledge

FASKEN

Add value through
development /
commercialization

Eagle Ford, Texas

DEVELOPED/DISCOVERED RESOURCES

Add value through
development /
commercialization

Pangkah PSC
Offshore East Java

Ketapang PSC
Offshore East Java

Muriah PSC
Offshore East Java

Bangkanai PSC
Onshore Kalimantan

South Sesulu PSC
Offshore East Kalimantan

Wokam II PSC

Muara Bakau PSC

Offshore Papua

Offshore East Kalimantan

West Bangkanai PSC
Onshore Central Kalimantan

RESERVOIR MATURITY

16

LNG Gas Supply

FSRU Lampung

FSRU Jawa Barat

Specification
DWT
Storage Capacity
Regas Capacity
Offshore Pipeline
Diameter



81,900 tonnes
170,000 m3
240 MMSCFD
+21 km
24”

About 1.1 million cubic meter of LNG or 8 cargoes
was shipped to FSRU Lampung of subsidiary, PGN
LNG Indonesia from Tangguh Block in 2016. The LNG
regassified in to approximately 65 MMSCFD of gas
was delivered through pipeline to PGN’s customers in
West Java.

Specification
Capacity
Offshore Pipeline
Diameter
LNG Supply Contract



3 MTPA
+15 km
24”
11.75 MT

LNG GSPA between PGN & Pertagas was signed in
June 2015 to serve gas demand in Medan, South
Sumatera for 5 years.

17

Kepodang-Tambak Lorok Transmission Pipeline
Kepodang – Tambak Lorok Pipeline



Kalimantan Jawa Gas (KJG)
completed Kepodang – Tambak
Lorok pipeline project at the end of
August 2015. It has delivered gas
from Muriah Block to PLN’s Tambak
Lorok power plant in Central Java.
The volume will ramp-up to
maximum of 116 MMSCFD.



Saka Energi Indonesia (SEI) has
participating interest of 20% in
Muriah Block.

18

Recent Updates
Event
November 2016
Acquisition of Sanga-Sanga block

Detail of Event
SEI acquired a total of 37.81% of Sanga-Sanga block, located onshore
Kalimantan and hold joint operatorship via a 50% WI in Virginia Indonesia
Co., LLC.:
• SEI acquired 100% of BP East Kalimantan Ltd. held by Union Texas
International Corporation that owns 26.25% of the Sanga-Sanga PSC
• SEI acquired 50% of Unimar LLC held by Enstar LLC from BP that
owns an indirect 11.56% of the Sanga-Sanga PSC
• 2P reserves up to PSC expiry: 31.8 MMboe (69% gas)
• 2016E gross production: 206 MMscf/d gas (LNG & piped gas) and 13.1
Mboe/d of liquids

October & November, 2016
Delivery of LNG cargo

Three LNG cargoes from Tangguh Block arrived at FSRU Lampung. With
the additional cargoes, FSRU Lampung has regassified eight cargoes in
2016.

19

Recent Updates
Event

Detail of Event

September 2016
New discovery of oil reserve of
Pangkah Block

PGN’s subsidiary, SEI found new reserve of about 300 MBOE in Sidayu
Empat field, Pangkah block, East Java.

August & September, 2016
Delivery of LNG cargo

Two LNG cargoes from Tangguh Block arrived at FSRU Lampung, each in
August and September 2016. With the additional cargoes, FSRU Lampung
has regassified five cargoes in the nine months of 2016.

August 2016
Agreement with PLN regarding
extention of gas delivery to power
plant in Muara Tawar

PGN and PLN agreed to extend delivery of gas to PLN power plant in
Muara Tawar. Under the agreement, additional volume and more stable
offtake with new price will be applied starting from August 2016.

May 2016
Delivery of LNG cargo

One LNG cargo from Tangguh Block arrived at FSRU Lampung in May
2016. The cargo has been regassified and delivered through pipeline to
PGN’s customers in West Java. Hence, three cargoes have been
regassified in the period of first half 2016.

19

Recent Updates
Event

Detail of Event

April 2016
New discovery of gas reserve of South
Sesulu Block

PGN’s subsidiary, SEI found new gas reserve of about 500 BCF in South Sesulu
block, located at the offshore East Kalimantan.

April 2016
Delivery of LNG cargoes

Two LNG cargoes were shipped from Tangguh Block to FSRU Lampung in April
2016. The cargoes have been regassified and delivered through pipeline to
PGN’s customers in West Java. In 2016, about 1.1 million cubic meter or 8
cargoes of LNG will be shipped to FSRU Lampung.

April 8, 2016
Resolution of Annual General Meeting
of Shareholders on the composition of
Management

• The meeting honorably discharged, Mr. Iman Sugema and Mr. Muhammad
Zamkhani as the member of the Board of Commissioners and replaced with
Mr. Fajar Harry Sampurno and Mr. Kiswodarmawan as the new member of the
Board of Commissioners.
• The meeting changed the nomenclature of the member of the Board of
Directors’ position and appointed: Mr. Hendi Prio Santoso as the President
Director and Mr. Muhammad Wahid Sutopo, Mr. Nusantara Suyono, Mr. Danny
Praditya, Mr. Dilo Seno Widagdo and Mr. Hendi Kusnadi as the Directors..

April 8, 2016
Resolution of Annual General Meeting
of Shareholders on Dividend

Rp 2,213,734,528,459,- from the profit attributable to the parent of entity of year
2015 or Rp 91.32 per share were distributed as cash dividend to shareholders:
Cum dividend:
• Regular and negotiable market April 15, 2016.
• Cash market April 20, 2016.
• Payment date of cash dividend May 12, 2016

20

Note

.........................................
.........................................
.........................................
.........................................
.........................................
.........................................
.........................................
.........................................
.........................................
.........................................
22

Thank You

Contact:
Investor Relations
PT Perusahaan Gas Negara (Persero) Tbk
Mid Tower Manhattan 26th Floor, Jl. TB Simatupang Kav. 1-S
Jakarta, Indonesia
+62 21 8064 1111
www.pgn.co.id