INTEGRATING OFFSHORE AND ONSHORE NATURAL GAS INFRASTRUCTURES TO MARKETSby

Danny PradityaDirector of Commerce PT. Perusahaan Gas Negara (Persero) Tbk

Disclaimer:The information contained in our presentation is intended solely for your personal reference. In addition, such information contains projections and forward-lookingstatements that reflect the Company’s current views with respect to future events and financial performance. These views are based on assumptions subject to variousrisk. 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 differmaterially from those projected.

Table of content1. PGN and the history of Indonesia Domestic Gas Utilization2. PGN Business Model3. PGN Network Infrastructure – Transmission and Distribution4. Challenges in Providing Natural Gas for Power Market

5. Challenges in Providing Natural Gas for Industrial Estate Market6. Business Opportunity- Multi Modal Gas Supply7. Closing Remarks

PGN and the history of Indonesia Domestic Gas UtilisationPGN is Indonesia Gas SOE with strong commitment to increase domestic gas utilization through national strategic gas infrastructure development and gas market initiator

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The Growth of Infrastructure and Gas Utilisation in Indonesia

Pipa Gas Hilir Pipa Hulu Menjadi Hilir Konsumsi Gas Domestik Ekspor Gas

SSWJ Transmission Developed

Grissik – BatamTransmission

Developed

FSRU LampungDeveloped

FSRU NRDeveloped

PGN Business ModelLeading Player in Indonesia Natural Gas Transmission and Distribution

PGN manages more than 120.000 of

Indonesia domestic gas clients. We serve

all segment of gas user from industrial,

power plant, commercial to household and transportation.

PGN Network Infrastructure – Transmission and Distribution

North Sumatera and Riau Island

distribution network 761 km

Western Java, Lampung, Palembangdistribution network 2,707 km

East Javadistribution network 761

km

Tarakan

Sorong

1. Area Medan2. Area Batam3. Area Pekanbaru4. Area Palembang5. Area Lampung6. Area Cilegon7. Area Tangerang8. Area Jakarta9. Area Bogor10.Area Bekasi11.Area Karawang12.Area Cirebon13.Area Semarang14.Area Surabaya15.Area Pasuruan16.Area Sidoarjo17.Area Tarakan18.Area Sorong

Area of OperationPGN Gas Infrastructure represent more

than 70% natural gas downstream infrastructure in Indonesia

This only covers of 30% infrastructure required

Challenges in Providing Natural Gas for Industrial Estate Market

Sourcer: RPJMN 2015-2019

Bintuni Bay Industrial Estate

Oil and Gas Industry and Fertilizer

Bitung Bay Industrial Estate

Agro Industry and Logistic

Morowali Industrial Estate

Smelter Ferronickel,Stainless steel industry

and its derivatives

PaluIndustrial Estate

Rattan, Rubber, Cacao (agro) Based Industry

and Smelter

Konawe Industrial Estate

Ferronickel Smelter Industry, Stainless Steel

and Downstream Product

Buli Industrial Estate

Smelter Ferronickel,Stainless steel industry

and its derivatives

Bantaeng Industrial Estate

Ferronickel Smelter Industry, Stainless Steel

and Downstream Product

Batu Licin Industrial Estete

Steel Industry

LandakIndustrial Estate

Rubber Industry, CPO

Ketapang Industrial Estate

Alumina Industry

Kuala TanjungIndustrial Estate

Aluminums Industry, CPO

Tanggamus Industrial Estate

Maritime Industry and Logistics

Sei Mangkei Industrial Estate

CPO Processing Industry

Jorong Industrial Estate

Downstream of Mineral Resources (Bauxite),

Palm Oil

Ref: World Bank, BI, BPS

Indonesia Continuous Economic Growth Means Continuous EnergyDemand: Increase Electricity Demand

The growth of Electricity Demand and the Indonesia energy mix for Electricity Generation plan define the gas demand for electricity in 2022 will reach 440.000 Gwh

Economic Growth and Rapid Electricity Demand Growth

Challenges in Providing Natural Gas for Power Market

GAS RESERVE (TSCF)PROVEN = 108.40 TSCFPOTENCIAL = 48.74 TSCFTOTAL = 157.14 TSCF

The electricity demand is spread out through the archipelago making PLN as a gas user with multi destination requirement.The diverse location will define the diverse infrastructure cost and PGN as National Gas company is striving its best effortsto serve the demand.

Recommendation Multi Modal Gas SupplyTo serve potential customers who have high ability to pay, low demand and located in scatteredlocation, PGN will use multi-moda gas transportation, this includes CNG and Mini LNG.

IPP§ Eastern Sumatera§ Southern Sumatera§ Bangka – Belitung § Pontianak

§ Northern Sumatera§ Dumai § Pontianak§ Bangka – Belitung§ Southern Sumatera

§ Bali§ Lombok – NTB§ NTT

§ Lampung§ Southern Sumatera§ Bali§ Lombok

§ Break-Bulking § Mini LNG Ship § Mini LNG Ship§ CNG Trucking§ CNG Marine

Moda

CNG PeakerMini LNG Eastern Mini LNG WesternFSRU Lampung

Key Recommendations• The most promising markets which are in proximity to PGN’s planned Mini LNG terminals in Western & Eastern area and can be

supplied either through LNG trucks or via a ISO tank intermoda/LCT carrier• Based on the gas supplies it can secure, Gagas can also examine the potential of establishing multi-moda gas supply chains to other

markets like Bali, North / Central Sumatra and Sulawesi in the future

Closing Remarks

1. Indonesian gas market still continue to grow, align with government plan to develop industrial estate and increasing

demand from power sector. Based on the National Energy Mix Policy, by 2025 natural gas is expected to take up to 30

part of total energy demand, twice of todays volume at 3800 Mmscfd.

2. To meet above target, extensive natural gas infrastructure development is a must. This include CNG, LNG receiving

terminal, FSRU, small/medium-scale LNG logistic and land based LNG trucking. Ooprtunity for technology provider and

infrastructure provider.

3. An efficient and reliable natural gas infrastructure that will serve the whole nation can only be developed through Nation

Grid Infrastructure. PGN will continuously play its role as state’s owned enterp.rise to serve the nation by propagating and

developing natural gas infrastructure.

4. Synergy between state’s owned enterprise is required to have integrated and solid infrastructure. A joint planning is

mandatory to avoid unnecessary duplication and inefficiency. Public- Private Partnership scheme is also encouraged tpo

accelerate infrastructure growth.

Thank You