CNG Industry Players in Indonesia

Are they ready for the shift to public transportation sector?

Presentation on GLG webcast

Presented by
Robbi R. Sukardi, MBA
Managing Director PT. Raja Rafa Samudra
Jakarta, 28 August 2012
 MAJOR CNG INDUSTRY PLAYER & MARKET
POTENTIAL IN INDONESIA

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 1986 - 1992 1993 - 1998 1999 - 2004 2005 - 2008 2009 - Today

Indonesias Government Lack of incentives for the

Launched the First NGV NGV users and the High The start of developing era of the
Program called the Blue Cost of operating the private sector entering the NGV
Sky Program CNG stations resulted to and Industrial CNG business
a diminishing number of
NGV and CNG Stations.
Increase government attention
Although during this period Indonesias Oil toward the development of
Consumption exceeded the Countrys Oil production Indonesias NGV market making
making Indonesia as a Net Oil Importer, the NGV and the rising era of the NGV industry
CNG Stations development did not made it to expand in Indonesia.
further as NGV and CNG Station owners difficult to
convert and buy spare parts due the Indonesian crisis
had caused the devalued of the Rupiah causing
characteristic

Driven by Indonesia Development of CNG
State Owned Oil Stations owned by PT.
Company PT. Pertamina were in the
Pertamina in the numbers of below 30
development of the CNG Station across
CNG Stations. Indonesia.
NGVs were mainly Taxis fleets remained Most of the other
taxis. the NGV users.
Price of CNG was low, Price of CNG was low,
but so was the Petrol while Petrol remain
Price. low too as the
Government
subsidized Petrol Fuel.
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New CNG Stations DKI Jakartas initiated New policies on the
from private sector the Corridor new busses NGV use were
was established in using a dedicated develop directly by
East Java but mainly natural gas engine. the Indonesias
by owners of the Private owners started President, which
Taxis fleet. to enter the CNG Pertamina will drive
business both for NGV new stations
existing CNG Stations and Industrial usage. development.
was shutting down as A wide gap between Gas Price gap between
the cost to maintain price & Petrol price. CNG and petrol
the equipment had Petrol Fuel remained remained high, but
exceeded the revenue being subsidized. subsidized petrol price
and not enough sale. APCNGI was established. and CNG were
remained small.
 AREA OF CNG
OPERATIONS

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 THE EXISTING PRIVATE ENTERPRISE CNG STATION OWNERS *
COMPANY ENTITY AREA OF OPERATION
1. PT. Aksara Andalan Prima DKI Jakarta
2. PT. Banten Gas Synergy Sidoarjo, East Java
3. PT. Berkah Mirza Insani Cikarang, West Java
4. PT. Cipta Niaga Gas Cikampek, West Java
5. PT. Citra Nusantara Energy Surabaya, East Java
6. PT. Citra Nusantara Gemilang Bekasi, West Java
7. PT. Citra Nusantara Hilir Raya Palembang, South Sumatra
8. PT. Daya Trans Avindo Sidoarjo, East Java
9. PT. Davalti Mugi Utama Gasindo DKI Jakarta
10. PT. Duta Nugraha Pratama Gempol, East Java
11. PT. Global Granary Energy Sidoarjo, East Java
12. PT. Green Energy Natural Gas Gresik, East Java
13. PT. Indogas Kriya Dwiguna Sidoarjo, East Java
14. PT. IEV Bekasi, West Java
15. PT. Java Energy Semesta Gresik, East Java
16. PT. Petross Gas DKI Jakarta
17. PT. Setindo Raya Pasuruan, East Java
18. PT. Suropati Cahaya Timur Pasuruan, East Java
19. PT. T Energy DKI Jakarta
20. PT. Titis Sampurna Cepu, West Java
21. PT. Pess Gresik, East Java
22. PT. Zebra Energy Surabaya, East Java
* Based upon data from APCNGI - 2011
INDUSTRIAL CNG MARKET PLAYERS *

PT. CITRA NUSANTARA GEMILANG PT. BERKAH MIRZA INSANI

3,5 mmscfd capacity Mother Station 3,0 mmscfd capacity Mother Station
Supplied by PT. Pertamina Supplied by PT. Perusahaan Gas Negara
Gas contract amounted to 3,5 mmsfd and all Gas contract amounted to 2,5 mmsfd and
already sold to industrial customers. all already sold to industrial customers.

PT. PETROSS GAS

1 mmscfd capacity Mother Station
Supplied by PT. Perusahaan Gas Negara
Gas contract amounted to 0,7 mmsfd and sold
to the Bus Transjakarta market (possibly shifting
to industrial)

PT. T ENERGY
1,0 mmscfd capacity Mother Station
Supplied by PT. Perusahaan Gas Negara
Gas contract amounted to 1 mmsfd and 0,4 sold PT. CIPTA NIAGA GAS
to the Bus Transjakarta market & 0,6 mmscfd 4,0 mmscfd capacity Mother Station
to industrial Supplied by PT. Perusahaan Gas Negara
Gas contract amounted to 2,5 mmsfd and
all already sold to industrial customers.
PT. IEV
3,5 mmscfd capacity Mother Station
Supplied by PT. Odira Gas
Gas contract amounted to 3,5 mmsfd and all
already sold to industrial customers.

* Based upon data from APCNGI - 2012

CNG STATION IN DKI JAKARTA AREA *

Station Kalideres
Station Pluit

Station Rawa Buaya Station Perintis

Station Davalti
Station Pemuda

Station Grogol Station Hek

Station T Energy
Station Pancoran

Keterangan Station Rambutan

Pertamina
Station Margonda
Private Owners Station Cimanggis
* Based upon data from APCNGI- 2012
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 CNG Private Players * :
22 Established CNG Mother Stations
5 Plan Development CNG Mother Stations
+ 300 units CNG Skids module
+ 60 MMSCFD CNG Production Supply
4 CNG Converter Kits Installation Company
2 CNG Consultant Company

13 Private CNG Mother Station

3 Private Conversion Workshop
7 Private Transporters
3 Government CNG Mother Station *
1 Private CNG Mother Station
1 Private Conversion Workshop
1 Government CNG Mother Station
2 Government CNG Daughter Stations *

9 Private CNG Mother Station

3 Private Conversion Workshop.
5 Private CNG Transporters.
+ 7-9 Pertamina CNG Station
3 New Pertamina Mother Station *
* In development 4-6 Pertamina Daughter Stations *
* Based upon 2011 data from APCNGI

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 NEW AREA OF
OPERATIONS

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 DOMESTIC CHALLENGES FOR CNG
INFRASTRUCTURE IN INDONESIA

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 TWO MAIN FACTORS FOR THE SUCCESFULNESS OF THE CNG CONVERSION IN INDONESIA

1. PRICE DEVIATION BETWEEN CNG SALE PRICE AGAINST PETROL SALE PRICE
During the development stage, ideally there should be gap difference between
CNG Fuel price and Petrol Fuel price;
If todays Petrol Fuel (Non Subsidy) is selling at $0.95/PLE, then assuming a 70%
difference from CNG sale price then would be around $ 0.28/PLE $ 0.32/PLE;
2. WIDE SPREAD AVALILABILITY OF CNG FILLING STATIONS
Because the amount of gas that can be stored in the cylinders tank is around of
the amount of petrol that can be stored using a type I cylinders, natural gas
vehicles (NGV) need to fill at least twice as much as petrol running vehicles.
CNG Storage Capacity Petrol Strorage Capacity
Small Vehicles 11 ple Small Vehicles 45 liter
- equivalent to 10 m3
- equivalent to 40 wlc
Medium Size Vehicles 17 ple Medium Size Vehices 60liter
- equivalent to 15 m3
- equivalent to 60 wlc
Large Vehicles 275 ple Large Vehicles 500liter
- equivalent to 250 m3
- equivalent to 1,000 wlc
* Based upon Indonesias General Standard

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 US$/mmbtu + US$/mmbtu + US$/mmbtu + US$/mmbtu + US$/mmbtu

Natural Gas Natural Gas CNG On-line CNG Trucking Daughter

Supplier Pipeline Station Fleets Stations

Rp./PLE
Private companies is waiting on policy by
the Indonesias government so that are able
to participate in the CNG conversion
program to speed up the expandability of
the stations.
However, private sector will be confronted
with the feasibility challenges to operate
the CNG Stations if the sale price of CNG
are to be regulated and being maintained
at 60%-70% below petrol fuel, but on the
other hand, the cost of pipeline gas are non
regulated and selling at a high price
providing limited margin for the CNG
Stations private companies. CNG Sale Price < 60% Petrol Sale Price

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 CNG STATIONS CLASSIFICATIONS *
Based on Compression & Filling Capacity

* Based upon APCNGI standards

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 5 YEAR SMALL SIZE CNG STATION FEASIBLITY PRICING STRUCTURE

Minimum Volume Sale per Day 9,000 Maximum Volume Sale per Day 18,000
Minimum Volume Sale per Month 270,000 Maximum Volume Sale per Month 540,000

Minimum CNG Station Margin $ 0.20 / m3 Minimum CNG Station Margin $ 0.10 / m3
Cost of Pipeline Gas * $ 0.25 / m3 Cost of Pipeline Gas * $ 0.25 / m3
Cost of CNG at Station $ 0.45 / m3 Cost of CNG at Station $ 0.35 / m3
VAT 10% $ 0.04 / m3 VAT $ 0.03 / m3
Net Price of CNG at CNG Station $ 0.49 / m3 Net Price of CNG at CNG Station $ 0.38 / m3

EQUIVALENT TO MMBTU EQUIVALENT TO MMBTU

Minimum CNG Station Margin ** $ 5.24 / mmbtu Minimum CNG Station Margin ** $ 2.62 / mmbtu
Cost of Pipeline Gas * $ 6.70 / mmbtu Cost of Pipeline Gas * $ 6.70 / mmbtu
Cost of CNG at Station $ 11.94 / mmbtu Cost of CNG at Station $ 9.32 / mmbtu
VAT 10% $ 1.19 / mmbtu VAT 10% $ 0.93 / mmbtu
Net Price of CNG at CNG Station $ 13.14 / mmbtu Net Price of CNG at CNG Station $ 10.25 / mmbtu

* Based on PT. Perusahaan Gas Negara 2011 Gas price in West Java Region
** Based upon RRS evaluation assumption on general CNG Station Development

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 : Cost Structure of Small Size CNG Station

$0.60

$0.50

Loss Margin $0.40

Targeted CNG
$0.30 Sale Price
US$0.3/m3
current average pipeline average cost
$0.20

$0.10

$-

Volume m3/month 270,000 300,000 330,000 360,000 390,000 420,000 450,000 480,000 510,000 540,000

Economical CNG Station Margin ** $ 0.20 $ 0.18 $ 0.16 $ 0.15 $ 0.14 $ 0.13 $ 0.12 $ 0.11 $ 0.10 $ 0.10
Assumption Pipeline Gas * $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25
Sale Price before VAT at Station $ 0.45 $ 0.43 $ 0.41 $ 0.40 $ 0.39 $ 0.38 $ 0.37 $ 0.36 $ 0.35 $ 0.35
VAT 10% $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.03
Sale Price of CNG at Station $ 0.49 $ 0.47 $ 0.45 $ 0.44 $ 0.42 $ 0.41 $ 0.40 $ 0.40 $ 0.39 $ 0.38
* Based on PT. Perusahaan Gas Negara 2011 Gas price in West Java Region
** Based upon RRS evaluation assumption on general CNG Station Development

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 JAVA NGV MARKET POTENTIALS *
Kab. Tangerang
Large Busses: 162 unit
Small Busses: 2465 unit
Cilegon Public Transport: 3671 unit
Taxi: 3399 unit
Public Transport: 261 unit
Kota Bekasi
Large Busses: 264 unit
Kab. Bekasi
Large Busses: 46 unit
Medium Busses: 211 unit
Public Transport: 1589 unit
Public Transport: 1732 unit
Taxi: 1287unit
Taxi: 3100 unit

Serang Kota Tangerang DKI Jakarta Kota Cirebon

Public Transport1002 unit
Large Busses: 89 Unit
Small Busses: 300 unit
Public Transport: 2461 unit
Taxi: 3698 unit
Large Busses: 2809 unit
Medium Busses: 7821 unit
Small Busses: 26002 unit
Public Transport: 2576 unit
Taxi: 19827 unit
Large Busses: 363 unit Kab. Cirebon
Medium Busses: 136 unit Public Transport: 1440unit
Small Busses: 146 unit
Public Transport: 979 unit Kab. Gresik
Taxi: 60 unit Public Transport: 288 unit
Taxi: 40 unit

Kab. Karawang
Taxi: 1890 unit
Kota Bogor
Large Busses: 239 unit
Medium Busses: 73 unit
Small Busses: 4529 unit
Public Transport: 3459 unit
Kab. Bogor
Large Busses: 79 unit
Medium Busses: 68 unit
Small Busses: 657 unit
Public Transport: 1351 unit
Kota Depok
Large Busses: 157 unit
Medium Busses: 46 unit
Small Busses: 568 unit
Public Transport: 2880 unit
Taxi: 4072 unit
Kota Bandung
Large Busses: 192 unit
Medium Busses: 12 unit
Small Bus: 12 unit
Public Transport: 5521 unit
Taxi: 1201 unit
Cimahi
Small Busses: 402 unit
Public Transport: 1289 unit
Kab. Mojokerto
Public Transport: 412 unit
Kota Surabaya
Large Busses: 463 unit
Public Transport: 6247 unit
Taxi: 3996 unit
Kab. Sidoarjo
Large Busses: 307 unit
Medium Busses: 144 unit
Small Busses: 1535 unit
Public Transport: 1426 unit
Taxi: 130 unit

* Data from Indonesia Department of Transportation 2010 data

public transportation vehicle year book.

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 COST STRUCTURE & ECONOMIC ANALYSIS
FOR CNG STATION

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 CONSIDERATION INVESTMENT FACTORS OF A CNG STATION

Gas Supplier Inlet # of Stages for the Compressors

Compressor Capacity According to your required parameters
CAPITAL EXPENDITURE COST

CHOICE & DESIGN OF THE

Availability of Power Electrical or Gas Engine Power
CNG STATION
TO BE DRECIATED

Gas Quality Filtering & Gas Dryer Equipments Added

Manufacturer Country Customs Taxes & Currency Exchange

Land Ownership Buy or Rent

LAND AREA Size of Land According to your parameter requirment.

Certification Must be accordance to a approve standards

GOVERNMENT APPROVALS
Local Government Licenses or Approval

Cost of Gas from supplier

Currency being used.
TERMS & CONDITION OF THE
COST OF OPERATING &

GAS SUPPLY Minimum Take or Pay & Maximum Surcharge Penalty

MAINTENANCE

Payment Terms & the basis of volume metering used

Power usage bill.

Manpower & Labor Cost.
OPERATIONAL &
MAINTENANCE COST Routine & Non-Routine Maintenance Cost.
Loan Interest & Taxes Expenses.

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 CALCULATING YOUR PRELIMINARY ESTIMATE COST STRUCTURE*

* Assumption based figure from historical CNG development

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 CALCULATING PRELIMINARY OPERATING COST VARIABLES

* Based on PT. Perusahaan Gas Negara 2011 Gas price in West Java Region
** Based upon RRS evaluation assumption on general CNG Station Development

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 CONSIDERATION INVESTMENT FACTORS CNG TRANSPORT

Kilometers distance and ease of traffic

Interval [ ? ] time

[ ? ] filling per day

MOTHER STATION CNG CASCADE CYLINDER CNG CASCADE CYLINDER INDUSTRY CUSTOMERS
FILLING DOWNLOADING AT INDUSTRY

CAPEX: CAPEX: CAPEX:

CNG Station Storage Cylinder (type I, II, III, or IV) Site Development
Land Truck Trailer (10 ft, 20 ft, or 40 ft Module truck carrier) Regulators System\
New Piping ( if needed )
OPEX : OPEX :
Gas supply Compressed Natural Gas Supply (if bought FOB)
Workers Transportation cost (travel distance for fuel and operating costs)
Depreciation of the Station Depreciation of your assets

CNG PROVIDER CUSTOMERS

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 * Formula Simulation Example made by Presenter for illustration

DATA REQUIRED INPUTS :

INDUSTRIAL CLIENT'S GAS CONSUMPTION DATA *

1. Average daily m3 gas volume consumption : m3/day

2. Daily Operating Hours : hour
3. Average m3 of gas consume per hour : (1) / (2) m3/hour
4. Operating days per month : day
5. Average monthly gas consumption per month : (1) X (4) m3/month

ESTIMATION OF NUMBER CNG CANISTER SKID NEEDED *

6. CNG Storage Capacity per skid : m3

7. Time to consume gas from skid : (6) / (3) hour
8. Estimate KM distance from Jakarta : km
9. Average km distance speed in Transporting Time per Hour : km/hour
10. Estimation transport time from station to delivery point : (8) / (9) hour
11. Time available for canister to refill gas at station : (7) - (10) hour
12. Compressor capacity m3/hr available at station : m3/hour
13. Estimated filling time at Station : (6) / (12) hour
14. Number of CNG Storage Skid needed : (7) / (11) units**
** minimum 2 units

Designing and custom made the cascade Tube skid capacity, if necessary, toward
the customer gas requirement consumption and road conditions.
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 * Result Simulation Example made by Presenter for illustration

DATA REQUIRED INPUTS :

INDUSTRIAL CLIENT'S GAS CONSUMPTION DATA *

Average daily m3 gas volume comsumption : 8,000 m3/day

Daily Operating Hours : 24 hour
Average m3 of gas consume per hour : 333 m3/hour
Operating days per month : 25 day
Average monthly gas consumption per month : 200,000 m3/month

ESTIMATION OF NUMBER CNG CANISTER SKID NEEDED *

CNG Storage Capacity per skid : 2,000 m3

Time to consume gas from skid : 6.0 hour
Estimate KM distance from Jakarta : 100.0 km
Average km distance speed in Transporting Time per Hour : 30.0 km/hour
Estimation transport time from station to delivery point : 3.3 hour
Time available for canister to refill gas at station : 2.7 hour
Compressor capacity m3/hr available at station : 2,000 m3/hour
Estimated tIme filling at Station : 1.0 hour
Number of CNG Storage Skid needed : 3.0 unit

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 Typical Industrial Daughter Reduction Equipment

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 MAIN DRIVES FOR FUTURE CNG
INDUSTRIAL APPLICATIONS

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 (1). INDONESIAS CONDITION
Indonesian dependency on oil fuel , as were NO LONGER a
Nett Oil Exporter Country;
Huge potential gas reserve, with proven reserve of 94,78
TCF* and potential reserve of 87.73 TCF*, Indonesia is
considered as country with largest natural gas reserve;
Limited pipeline infrastructure;
LNG is NOT yet available for domestic use;
Government program to reduce emission level and increase
the monetization of stranded gas.
Industrial gas demand exceeds supply due to lack of
pipeline infrastructure.
Many stranded small scale gas reserves.

CNG as another means of gas transportation aside from

conventional pipeline and LNG
* BASED UPON BLUEPRINT PENGELOLAAN ENERGI NASIONAL 2005 2025 INDONESIA DEPARTMENT ESDM

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 (2). VOLUME
With CNG bulk sale selling can reach your
economies of scale of the CNG Station.

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 : Estimate Cost of Running Your Stations

$0.50
Target Sale
$0.45 Price at
Mother
$0.40
Stations
$0.35

$0.30

$0.25

$0.20

$0.15

$0.10

$0.05

$-

Volume m3/month 1,080,000 1,200,000 1,320,000 1,440,000 1,560,000 1,680,000 1,800,000 1,920,000 2,040,000 2,160,000

Economical CNG Station Margin ** $ 0.14 $ 0.13 $ 0.12 $ 0.11 $ 0.10 $ 0.09 $ 0.09 $ 0.08 $ 0.08 $ 0.07
Assumption Pipeline Gas * $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25
Sale Price before VAT at Station $ 0.39 $ 0.38 $ 0.37 $ 0.36 $ 0.35 $ 0.34 $ 0.34 $ 0.33 $ 0.33 $ 0.32
VAT 10% $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03
Sale Price of CNG at Station $ 0.43 $ 0.42 $ 0.40 $ 0.39 $ 0.38 $ 0.38 $ 0.37 $ 0.36 $ 0.36 $ 0.35
* Based on PT. Perusahaan Gas Negara 2011 Gas price in West Java Region
** Based upon RRS evaluation assumption on general CNG Station Development

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 Metering
Well Head Gas Plant System

Gas Upstream Infrastructure

NGV Customers
Gas Downstream Infrastructure

Gas Customers / Daughter Stations Gas Customers / Factories

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 COMPRESSOR

METERING
PIPELINE DRYER
SYSTEM

BY PASS SYSTEM COMPRESSOR

STORAGE
DISPENSER DISPENSER DISPENSER
#1 #2 #3 CYLINDER

FILL POINT
#1

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 (3). COMMERCIALLY MORE PROFITABLE
The competitor in selling CNG to industries in
Indonesia are other fuel energy that are
more expensive.

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 $ 5 - $ 6 / mmbtu + $ 3 - $ 4 / mmbtu + $ 2 - $ 4 / mmbtu + $ 2 - $ 4 / mmbtu = $ XX / mmbtu
Natural Gas Natural Gas CNG On-line CNG Trucking
Industrial
Supplier Pipeline Station Fleets

Gas Customers / Factories

* Based on PT. Perusahaan Gas Negara 2012 Gas price in West Java Region
& upon RRS evaluation assumption on general CNG Station Operational Cost

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 THE PRICE DEVIATION BETWEEN GAS AND OTHER FUEL IN INDONESIA

Heating Value Price

Fuel unit
Btu/unit kcal/unit US$/MMBTU
KEROSENE Liter 35,079 8,840 32.94
GASOLINE Liter 33,000 8,316 28.00
HSD Liter 35,964 9,063 23.06
MFO Liter 36,786 9,270 19.76
HFO Liter 38,754 9,766 21.41
LPG Kg 44,524 11,220 21.97
NG Pipeline (PT. PGN price Jakarta) m3 36,798 8,919 8.90
NG Pipeline (PT. PGN price Surabaya) m3 37,257 9,031 9.10
NG Pipeline (PT. PGN price Medan) m3 37,257 9,031 10.00
CNG at Mother Station (FOB Price) * m3 35,526 9,224 10.50
CNG
CNG transported to Customer < 100 km m3 35,526 9,224 15.00
Price
CNG transported to Customer > 100 km m3 35,526 9,224 18.00
* 2011 estimate pricing figure from average APCNGI members market price

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 DISCLAIMER

Pictures used in this presentation are for the purposes of illustration only. Their
appearance does not imply endorsement or criticism of their quality or suitability for
any particular CNG project. Figures number are also for illustration purposes that
can varied depending on a certain project requirement.

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 THANK YOU
FOR YOUR ATTENTION

PT. RAJA RAFA SAMUDRA

Mailing Address:
Jalan Pertani No. 18 / Kavling A
Duren Tiga. Pancoran. Jakarta Selatan. Indonesia
Phone / Fax : +62 21 7990467 / +62 21 79199042
Website: http://www.rajarafasamudra.com

Operational Office
Member of:
Jl. Danau Tondano No. A1. Bendungan Hilir.
Tanah Abang. Jakarta Pusat. 10210.
Phone: 021-57902481/021-57902482.
Fax: 021-5731609
Email:robbi_sukardi@rajarafasamudra.com