PGN Business Presentation 3M-2011 Update

Perusahaan Gas NegaraPresentation to the investors

May 2011 update

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

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Indonesia: A Major Producer of Natural GasThe largest proven gas reserves in Asia PacificAhead of Australia, China and Malaysia (BP World Energy Report 2010)The largest proven gas reserves in Asia PacificAhead of Australia, China and Malaysia (BP World Energy Report 2010)

Source: Director General of Oil and Gas Republic of Indonesia

6.39

26.68

7.96

1.32

3.71

53.06

7.76

21.4924.14

6.316.18 6.30

Experience domestic natural gas shortagesDue to fast growing demand and limited natural gas infrastructureExperience domestic natural gas shortagesDue to fast growing demand and limited natural gas infrastructure

Natural Gas: Proved reserves (BP World Energy Report 2010) 2009share

Trillion cubic metres 2005 2006 2007 2008 2009 of totalIndonesia 2.48 2.63 3.00 3.18 3.18 1.7%Australia 2.35 2.34 2.29 3.08 3.08 1.6%China 1.53 1.68 2.26 2.46 2.46 1.3%Malaysia 2.48 2.48 2.38 2.38 2.38 1.3%Total Asia Pacific 13.48 13.75 14.65 16.00 16.24 8.7%

Total World 172.28 173.18 176.68 185.28 187.49 100.0%

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Demand for Natural Gas

No Subsidy of Fuel for the Industries• Subsidies for industries revoked in 2005

Pricing and Efficiencies• Significant price and efficiencies benefits

by converting to natural gas, as well asenvironmental concerns

Conversion of Power Plants• Pent‐up demand from the conversion of

existing dual fired power plants pendingavailability of gas

Demand from the industries• Require natural gas to compete in the era

of Free Trade Agreement

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Source: Ministry of Industry Republic of Indonesia & PLN

Industry Demand 2011

MMSCFD

2,093

1,247

965

246131 100 79

0

500

1,000

1,500

2,000

2,500

Current Low Consumption to Drive Demand

Low level of current consumption of natural gas and electricityEnsure the continuing growth of demand for natural gasLow level of current consumption of natural gas and electricityEnsure the continuing growth of demand for natural gas

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Energy IDR/Kwh

Oil 1,420

Natural Gas 339

Coal 366

Geothermal 542

Hydro 12

Cost of Electricity Production

Source: PLN & Bisnis Indonesia (Januari 2011)

Opportunity : Price Advantages

Lower gas price compares to other fuelsLower gas price compares to other fuels

Industrial Prices are set on B‐to‐B basisIndustrial Prices are set on B‐to‐B basis

PGN Gas Price and HSD Price

USD

/MMBT

U

6

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

Mar‐05 May‐06 Aug‐07 Nov‐08 Feb‐10 Apr‐11

HSD Unsubsidized Price (USD/MMBTU)PGN Average Selling Price (USD/MMBTU)

28.69

17.51

17.33

28.21

28.06

26.24

13.74

20.46

10.05

6.45

Kerosene

LPG Bulk

LPG ‐ 50 kg

Premium

HSD (Solar)

MDF/IDO (Diesel)

LPG ‐ 12 kg

MFO

LPG ‐ 3 kg (Subsidized)

Natural Gas

USD/MMBTUNote: Fuel price Pertamina as of 15 April 2011Exchange rate USD 1 = IDR 9,400

PGN AverageSelling Price

Cost of Gas

Transport & Distribution

Costs

Internal Cost

Margin/Spread

Gas SellingPrice

New Pricing Scheme

Minister of Energy and Mineral Resources Decree No. 19 Year 2009• Allows pricing for “general users” to be determined by the

Companies• General users are non‐subsidized industries and power plants

Pricing Considerations• Demand and Supply Dynamics• Affordability• Reasonable Margin

Intended to stimulate more supplies to meet the growing demands

Implementation• PGN has taken the effort to communicate and educate the end

users market on the merit of new pricing flexibility• Implement new pricing scheme with “regionalized” and

“differentiated pricing” on nationwide basis starting from 1 April 2010

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Growing operational performance

Transmission VolumeTransmission Volume Distribution VolumeDistribution Volume

Deliver strong growth following completion of SSWJ

Deliver strong growth following completion of SSWJ

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MMSCFD

MMSCFD

527 551 566 577 721 756 776 792 841 827 821 824 7800

100

200

300

400

500

600

700

800

900

716 743 747 758 779 763 763 767 816 848 853 836 8600

100

200

300

400

500

600

700

800

900

1000

Customers’ Profile

As of March 31, 2011, sales volume of industrial customers was 757 MMSCFDor equal to 97% of PGN’s sales

As of March 31, 2011, sales volume of industrial customers was 757 MMSCFDor equal to 97% of PGN’s sales

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33%

15%

11%

8%7%

6% 6%5% 5%

3%1%

0.04%0.00%

10.00%

20.00%

30.00%

40.00%

PowerPlant

Chemical Ceramic Food Glass FabricatedMetal

Others BasicMetal

Paper Textile Cement Wood

Growing Revenues, Expanding EBITDA

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11,275

16,380 18,055

4,095 4,311

1,519

1,624

1,653

386 408

20

58

5 21

‐

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2008 2009 2010 Q1 2010 Q1 2011

Distribution Transmission Fiber Optic

Revenue EBITDA and EBIT

IDR billion

6,375

9,303

10,730

2,468 2,688

4,657

7,676

9,036

2,106 2,270

50%52%

54% 55%57%

0%

20%

40%

60%

‐

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

2008 2009 2010 Q1 2010 Q1 2011

EBITDA EBIT EBITDA Margin

IDR billion

Consolidated Statements of Comprehensive IncomeQ1 2011

11

206 207

‐

50

100

150

200

250

Q1 2010 Q1 2011

FX Gain/Loss Translation

4,486

1,760

619

2,106 1,771

4,741

1,744

726

2,270 2,101

‐

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Revenue Cost ofRevenue

OperatingExpense

OperatingIncome

Net Income

Q1 2010 Q1 2011

IDR billion

IDR billion

Exchange RateExchange Rate

‐ 31 Mar 2010USD1 = IDR9,115 & JPY1 = IDR97.71




Consolidated Financial Position Statement

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(IDR billion) Dec 31, 2010 Mar 31, 2011

Current AssetsNon Current Assets

13,85818,229

13,85917,326

Total Assets 32,087 31,185

Current LiabilitiesNon Current LiabilitiesTotal Equity

4,03612,95015,101

3,22910,80617,150

Total Liabilities And Shareholders Equity 32,087 31,185

Key Ratios 2009 2010

Return on Investment (ROI) 32.4% 33.4%

Return on Equity (ROE) 113.2% 81.8%

Net debt/EBITDA (x) 0.6 0.2

Key Ratios Q1 2010 Q1 2011

Debt to Equity Ratio (x) 0.8 0.6

Net debt/Equity (x) 0.2 0.1

EBITDA/Interest expense (x) 26.0 31.1

DEBT COMPOSITION(as of Mar 31, 2011)

Long-term debt amounting to USD 912 millionMostly long dated/maturity loans from Developmental Banks

Long-term debt amounting to USD 912 millionMostly long dated/maturity loans from Developmental Banks

Effective Cost of Debt of Around 2.2%Effective Cost of Debt of Around 2.2%

JPY62.5%

USD37.5%

Fixed73.7%

Float26.3%

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PGN

Industrial Customers(Steel Millls,

Petrochemical, Ceramics, Textile,

Glass)

Power Sectors(PLN, IPP)

Commercial Customers

(Hotels, Shopping Malls, Commercial

buildings)

Residential Customers

GAS SUPPLY‐ Contracted for volume and prices

CUSTOMERS‐ Contracted for volume

‐ Business‐to‐business Prices

Key Suppliers – Under Upstream Authority / BPMigas

Our Business Model

Represented 98% of volume

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Our Corporate Structure

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60% 40%PGN

Transasia

35%

35%

15%

15%PetronasConoco IndonesiaSingapore PetroleumTalisman Energy

*)Transgasindo Shareholder Composition

PT Perusahaan Gas Negara (Persero) TbkPT Perusahaan Gas Negara (Persero) Tbk

SBU II SBU II

SBU ISBU I

SBU IIISBU III

SBU Transmisi(SSWJ)

SBU Transmisi(SSWJ)

PT Transgasindo*(Grissik‐Duri andGrissik‐Singapura)

PT Transgasindo*(Grissik‐Duri andGrissik‐Singapura)

PT PGASTelekomunikasi

Nusantara

PT PGASTelekomunikasi

Nusantara

PT PGASSolutionPT PGASSolution

Ownership subsidiaries and afiliate

PT NusantaraRegas

PT NusantaraRegas

60% 100% 100% 40%

Our Network & Facilities

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Duri

KALIMANTAN

Terbanggi Besar St.Pagardewa Station

Panaran Station, Batam

Bojonegara Station

Grissik Receiving Station

Legend:

South Sumatera – West Java Transmission Pipeline (SSWJ) (970 MMSCFD)

Grissik – Duri transmission pipeline (427 MMSCFD)

PLN – Medan(80 MMSCFD)

Strategic Business Unit (SBU) I

Strategic Business Unit (SBU) II

Strategic Business Unit (SBU) III

Grissik – Singapore transmission pipeline (465 MMSCFD)

Pagardewa Compressor St.

Muara Bekasi Station

Labuhan Maringgai St.

Our Sources of Gas

Pertamina CirebonDOH Cirebon15 BCF

Pertamina JBBDOH Cirebon338 BCF

Pertamina Sumatera SelatanDOH Sumsel, Merbau Field, Pagardewa, Prabumenang, Tasim, Musi Barat1006 BCF

GrissikPSC Grissik Corridor Block2581 BCF

Medco E&P IndonesiaSouth & Central Sumatra Block14 BCF

Lapindo BrantasWunut Field136 BCF

KodecoWest Madura PSC52 BCF

Pertamina MedanDOH Rantau44 BCF

*) @ 1000 BTU/SCF

IndonesiaPertamina TAC EllipseJatirarangon Field41 BCF

Maleo Field243 BCF

Husky OilBD Field146 BCF

K A L I M A N T A NMedco E&P LematangLematang Block

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Strategy to Fulfill Demand

Obtain access to new gas supplies• Actively seeking new gas supplies, starting from the ones located in the proximity of existing infrastructure

• Seek to obtain more allocation from the imposed domestic market obligations to new productions and contracts, but will require new infrastructure to be built

Develop existing and build new infrastructure• Expand existing distribution and transmission capacity• Plan for inter‐mode gas transportation such as CNG and LNG

Aim for non‐conventional sources• Plan and anticipate the non‐conventional sources such as Coal‐Bed Methane

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Plan for New LNG Infrastructure

To Build the first 2 LNG Receiving TerminalsTo Build the first 2 LNG Receiving Terminals

DonggiSenoro

Mahakam Block Tangguh

Masela

Existing LNG Liquefaction Plant

Planned LNG Receiving Terminal

Existing transmission pipelines

(planned)

(planned)

Arun

Planned LNG Liquefaction Plant

Source: LNGpedia19

Floating LNG Terminals

Northeast Gateway

Gulf Gateway

Bahía Blanca

Teesside

Kuwait

Dubai

Livorno

Operational Under Development

W. Java

Guanabara Bay

Pecem

Medan

Mossel Bay

LNG Ship “Golar Spirit” converted into LNG Regas Terminal Source: LNGpedia

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Floating LNG Terminal Overview

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LNG Receiving Terminals

WEST JAVA NORTH SUMATRA

Location Jakarta Bay Belawan, Medan

Capacity (MTPA) 3 MTPA 1.5 ‐ 2 MTPA

Customers Power plants, industry

Potential Supply HoA with Mahakam PSC (Total‐Inpex‐Pertamina)

Ongoing Negotiation with BP Tangguh

Owner PGN (40%) Pertamina (60%) PGN

Scope FSRU, jetty, subsea and overland pipelines

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FSRU Projects – Recent Developments

West Java:• HoA has been signed with Mahakam PSC for the provision of 11.75 MT of LNG

supply over 11 years and back‐to‐back HoA with PLN as the offtaker• Nusantara Regas (a JV between Pertamina and PGN) signed Time Charter Party

with Golar LNG for the hire of FSRU for 11 years• Golar LNG has positioned the LNG Carrier “Khan‐Nur” in the Jurong Shipyard in

Singapore for the conversion to FSRU• Nusantara Regas has appointed REKIN as the EPC for the undersea pipelines and

the ORF• Plan for commissioning of FSRU in 2012

North Sumatera:• Foster Wheeler Iberia has been appointed as the Project Management Consultant• Intention to Bid Documents has been issued for the EPC and Provider of FSRU –

Announcement of winning bidder in Q2‐2011

General :• Government to waive application of cabotage principle for vessels related oil and

gas

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West Java Distribution Expansion

Banten

Karawang

Palembang

Lampung

Bogor

Bekasi

Cirebon

460 km West Java Distribution Expansion Project460 km West Java Distribution Expansion Project

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460 km expansion of Jakarta,Bekasi, Cikampek, Bogor andBanten distribution system

System capacity increased by• 85% in West Java• 50% nationwide

Gas supply from South Sumatra

Project funded by World Bank andPGN

Recently Issued Regulations

Minister of Energy and Mineral Resources Decree No. 19/2009• Set the structure of natural gas trading, transmission and distribution

business and licensing• Provides special rights and licensing for dedicated downstream• Set pricing mechanism for piped natural gas:

o Residential regulated by BPH Migaso Special users determined by Minister of Energyo General users determined by the companies

Minister of Energy and Mineral Resources Decree No. 3/2010• Upstream has a mandate to serve domestic demand by 25% of natural gas

production• Domestic gas utilization priorities for national oil and gas production,

fertilizer, electricity and industrial uses• Exemption for existing Gas Sales & Purchase Agreements, Heads of

Agreement, Memoranda of Understanding or negotiations in progress

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Recent UpdatesEvent Detail of Event

Dividend Interim for Fiscal Year 2010performance

• Distribution of interim dividend Rp247,244,513,599.• Schedule of dividend payment:

‐ Cum dividend for Regular and Negotiable MarketDecember 27, 2010.

‐ Cum dividend for Cash Market December 30, 2010‐ Dividend payment January 4, 2011.

10 March 2011Prepayment of Syndicated Loan Agreement

• Syndicated Loan Agreement worth USD275 million was signed by PGNand the syndication on November 25, 2009 where Standard CharteredBank act as lead arranger.

• The loan was subject to interest rate of 3.1% p.a. + LIBOR 3 months rateand tenor of 3 years.

• Voluntary prepayment executed amounting to USD246,523,560 toStandard Chartered Bank.

1 April 2011MoU was signed by and between PT. PGN andGE International Operation Company Inc

Scope of the MOU :• Development of an Independent Power Plant.• Development of a marginal size gas‐to‐power solution for a commercial

building.• Explore the feasibility of developing a Technology State of the Art

training program for knowledge sharing purposes

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Recent UpdatesEvent Detail of Event

6 April 2011Extra Ordinary General Meeting of Shareholders

The Meeting decided the following matters:1. a. The meeting approved the amendment of Clause 3, Clause 12 paragraph 5, Clause 12 paragraph13 of the Company’s Articles of Association and the numbering adjustment of the clauses in theArticles of Association and re‐adjustment for the entire Company’s Articles of Association.

b. The meeting approved the delegation of authority to the Board of Directors (with substitute right)to adjust the Articles of Association aforementioned above, in a Notary Deed regarding theamendment of the Articles of Association, including the entire amendment that had made previouslyby the Company, and to conduct any action deemed necessary including to administer licenses andpermission from the authorized institution in accordance with the prevailing laws.

2. The Meeting approved:a. To honorably discharge Mr. Bambang Banyudoyo as the Director of Development of the Company.b. To appoint the Directors as follows:

‐Mr. MuhammadWahid Sutopo as Director of Investment Planning and Risk Management‐Mr. Eko Soesamto Tjiptadi as Director of Human Resources and General Affairs‐Mr. Jobi Triananda Hasjim as Director of Technology and Development

c. To honorably discharge Mr. Kardaya Warnika, Mr. Ilyas Saad as Commissioner dan Ms. NennyMiryani Saptadji as Independent Commissioner.

d. To appoint the Commissioners as follows:‐Mr. Megananda Daryono as Commissioner‐Mr. Pudja Sunasa as Commissioner‐Mr. Widya Purnama as Independent Commissioner

The discharge and appointment aforementioned above will be effective starting the close of thisMeeting.

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Board of Commisioners(After EGMS 6 April 2011)

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Tengku Nathan MachmudPresident Commissioner and Independent Commissioner

Kiagus Ahmad BadaruddinCommissioner

(Senior Adviser to the Minister of Finance, Acting DG of Budget)

Megananda DaryonoCommissioner

(Deputy Minister of SOE)

Pudja SunasaCommissioner

(Inspector General of the Ministry of Energy and Mineral

Resources)

Widya PurnamaIndependent Commisioner

(Former President Director of Pertamina)

Board of Directors(After EGMS 6 April 2011)

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Hendi Prio SantosoPresident Director

Eko Soesamto TjiptadiDirector of Human Resources

and General Affairs

Michael BaskoroDirector of Commerce

M Riza PahleviDirector of Finance

MWahid SutopoDirector of Investment Planning

and Risk Management

Jobi Triananda HasjimDirector of Technology

and Development

THANK YOU

Contact:Investor Relations

PT Perusahaan Gas Negara (Persero) TbkJl. K H Zainul Arifin No. 20, Jakarta‐11140, Indonesia

Ph: 62 21 6334838 Fax: 62 21 6331632http://www.pgn.co.id

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