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PROJECT PROFILE

EAST JAVA LNG IMPORT TERMINALS AND REGASIFICATION REG PROJECT DEVELOPMENT

Jakarta 2004 [Type text]

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EAST JAVA
LNG IMPORT TERMINALS AND REGASIFICATION PROJECT DEVELOPMENT
At the end of 2002 the onset of Pagerungan field decline and the expected startup of the Terang/Sirasun project at the end of 2004 create a face a gap in supply of natural gas of about 338 BBTU/D by 2005 and projected deficit up to 608 BBTU/D in 2010 for the existing East Java gas customer, consequently, increased imports of natural gas will be required to meet future shortfalls. To ensure adequate, reliable and secure gas supply for use in the East Java, PT Petrogas Wira Jatim (PWJ) has a plan to develop and a has concentrated on establishing of preliminary configuration to build a liquefied natural gas (LNG) receiving and regasification terminals, additionally, there is an opportunity for PWJ to make some profit on this project. A new offshore facility in East Java will be constructed, where LNG shipped by tankers will be stored and regassified. The gas will then be piped to consumers through off-shore transmission facilities. The Total Capital Investment of project estimated at US$ 404, 250, 000, - include Interest during Construction. The construction of the facility is planned to be completed around 3 years and the facility initially will supply 400 BBTU/D (360 MMSCFD) of Gas. The terminal will be supplied with LNG mainly from Qatar or the Tangguh gas field located in the Birds Head area of Papua could be considered as a supply source. The market prospect of the gas is very bright, because the demand of natural gas is continually increase. The Gas from the facility will be utilized as a long-term fuel source for power generation and industrial use in East Java, an area which is expected to see continued energy demand growth in the future. The cold potential can be harnessed in several ways by integrating LNG vaporization process for improved performance, lower capital and operating costs. Some of the possible methods of LNG cold utilization to develop are listed below: Air separation Electrical power generation Seawater desalination Chilled water for refrigeration and industry Cold storage and frozen foods Cryogenic crushing CO2 and dry ice production Ethane/Propane extraction

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PROJECT OVERVIEW A. Site Selection PT Petrogas Wira Jatim (PWJ) has selected and will construct a LNG Receiving Terminal & Regasification plant at Grati Pasuruan, on the north Coast of Java Island in the East Java Province - Indonesia. This location is 50 kilometres (km) east of Surabaya and close with PLN Power Plant Grati (Owned State Company). The proposed site at Grati was selected for several other reasons: Proximity to Gas Pipeline Infrastructure Marine Characteristics Customers Proximity and LNG Cold Utilization & Integration with PLN Grati Power Plant Sea Access to Construction Support Land Area and Topography

50 Km

Grati Pasuruan

B. LNG Terminal Capacity

The terminal will be designed to receive 400 BBTU/D (360 MMSCFD) or equivalent with 2.83 million tons of LNG per year. C. LNG Composition
Component Nitrogen Methane Ethane Propane i-Butane n-Butane Pentane Plus Total Gross Heating Value, BTU/SCF MJ/m3 Composition Mol % 0.52 92.17 5.96 0.61 0.27 0.36 0.11 100.00 1063.80 36.63

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D. Time Schedule The physical construction of the LNG Terminal is estimated to need about 36 months time starting (assumed) in the month of September 2004. In beginning of 2007, the establishment of LNG receiving and regasification terminal would be ready including the installation equipment, storage tank and marine facilities. Thus the commercial production could be made at the early of 2007. Activity Study Basic Design Engineering Storage Tank Marine Facilities Construction E. Description of The Terminal Facilities The LNG receiving terminal receives liquefied natural gas from special ships, stores the liquid in special storage tanks, vaporizes the LNG, and then delivers the natural gas into a distribution pipeline. The receiving terminal is designed to deliver a specified gas rate into a distribution pipeline and to maintain a reserve capacity of LNG. Month 6 Month 12 Month 18 Month 24 Month 30 Month 36 Commercial

- 162 oC, 14.7 Psi

32 oC, 1000 Psi

Receiving terminals to date are expected to operate close to 365 days per year and have spared equipment to achieve this availability. The terminal facilities consist of: LNG unloading system, including jetty and berth, LNG storage tanks, LNG vaporizers, In-tank and external LNG pumps, Vapor handling system, Supporting utilities, piping, valves, control systems, and safety systems required for the terminals' safe operation, Infrastructure (roads, fencing and buildings)

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F. INVESTMENT PLAN A lot of funds will be needed for the investment, by having this investment project; the financing plan investment can be described as follows:

CAPITAL INVESTMENT
No. Description Total Fixed Capital (Purchased, Delivered, Erection & Installation) Interest During Construction Total Working Capital TOTAL CAPITAL INVESTMENT Or Total Cost (US $) 313,500,000.00 48,536,822.40 42,183,748.74 404,220,571.14 404,250,000.00

SALES REVENUE & GROSS PROFIT / EBDIT

No. 1 2 3 Gas Sales Revenue Operational Expenditure Gross Profit, EBDIT (1-2) Description TOTAL US$/Ann. 467,200,000.00 348,226,084.76 118,973,915.24

ECONOMIC EVALUATION - RESULTS Internal Rate Of Return (IRR),% : Profitability Index (PI) : Net Present Value (NPV), US$ : Pay Out (Payback) Period , Years :

12.80% 1.48 176,279,815.52 5.83

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