Presented at - Indonesian Gas Societyindonesiangassociety.com/wp-content/uploads/2016/06/Keynote-2-And… · 7 PIM -AseanAceh Fertilizer Aceh Utara 8 AseanAceh Fertilizer -KertasKraft

Copyright © BPH Migas 2014, All Rights Reserved

Presented at : INDOPIPE 2014

THE 5TH INTERNATIONAL INDONESIA GAS INFRASTRUKTURE

CONFERENCE & EXHIBITION

17 – 18 June 2014

Royal Ambarrukmo Hotel, Yogyakarta - Indonesia

1. Transportation Tariff of Natural Gas Through Pipeline;

2. Price of Natural Gas for Households and Small Scale Customers;

To “Regulate”, “ Stipulate” and “Supervise” following matters:

INDONESIA OIL INDONESIA OIL AND AND GAS DOWNSTREAM REGULATORY GAS DOWNSTREAM REGULATORY AGENCY (BPH MIGAS) AGENCY (BPH MIGAS) KEY FUNCTIONSKEY FUNCTIONS

INDONESIA OIL INDONESIA OIL AND AND GAS DOWNSTREAM REGULATORY GAS DOWNSTREAM REGULATORY AGENCY (BPH MIGAS) AGENCY (BPH MIGAS) KEY FUNCTIONSKEY FUNCTIONS


2. Price of Natural Gas for Households and Small Scale Customers;

3. Natural Gas Transmission and Distribution Business.

4. Suply and distribution of Oil Base Fuels;

5. National reserved of oil base fuels;

6. Open access for storage and distribution facilities of Oil Base Fuels and Natural

Gas;

OPEN ACCESS of NATURAL GAS TRANSPORTATION FACILITIES

Purpose :

In order to joint utilization natural gas transportation facilities

can be carried out in transparent, accountable and fair.

Objectives :


Objectives :

� Increase domestic used of natural gas;

� Optimalization of natural gas transportation facilities

utilization;

� Guarantee equal treatment to all shippers.

Oil and Gas Law No 22/2001Oil and Gas Law No 22/2001

Government Regulation No 67/2002Government Regulation No 67/2002


Copyright © BPH Migas 2014, All Rights Reserved44


Minister Regulation No 19/2009Minister Regulation No 19/2009

Minister Decree No 2700/2012Minister Decree No 2700/2012

BPH BPH MigasMigas Regulation No 15/2008 about Open Access of Natural Gas Distribution Regulation No 15/2008 about Open Access of Natural Gas Distribution FacilitiesFacilities

LEGAL BASIS

1. Oil and Gas Law No 22/2001

Article 8 paragraph 3

“Business activity of natural gas transportation through pipelines that concern to

public interest is regulated, so the utilization can be used by all users”

Description:


Description:

� Because of natural gas pipeline is natural monopoly facilities, its utilization is

regulated and supervized in order to guarantee equal treatment to all user;

� What is meant by public interest in this provision are producer’s interest,

consumer’s interest and other community which related to transportation of

natural gas.

2. Government Regulation No 36/2004

Article 31 paragraph 1

“Business entity should give same opportunity to other party to utilized natural gas transportation facilities owned by consideration of technical and economical aspects”

Description :

� What is meant by technical consideration is against available utilization of natural

LEGAL BASIS


� What is meant by technical consideration is against available utilization of natural

gas transportation facilities can be used by other party without disrupting the

operational activity of the owner;

� What is meant by economical consideration is that other party who want to used

natural gas transportation facilities should be considered about economic interests

of owner facilities such as return of investment.

LEGAL BASIS

3. Government Regulation No 36/2004

Article 10 pharagraph 2 letter b dan Article 31 pharagraph 3

“Joint utilization of natural gas transportation facilities is regulated, stipulated and supervizedby BPH Migas with consideration of technical and economical aspects”

4. Minister Decree No 2700/2012 about Master Plan National GasTransmission and DistibutionNetwork year 2012 - 2025

Implementation of tender operational natural gas transportation through piplenies on transmission


Implementation of tender operational natural gas transportation through piplenies on transmission

section and distribution area category I (Open access) refered to second dictum conducted by

Regulatory Body after consideration from Menteri ESDM c.q. Direktur Jenderal Minyak dan Gas

Bumi.

5. Minister Regulation No 19/2009 about Gas Business Activities trough Pipelines

Article 9 :

In conducting business activities of natural gas, entities have to used transmission pipe and/or

distribution pipe available.

LEGAL BASIS

6. BPH Migas regulation Nomor 15/P/BPH MIGAS/VII/2008 about Joint Utilization of

Natural Gas Transportation Facilities

Regulate following matters :

a. Purpose and objectives of joint utilization natural gas transportation facilities;

b. Requirement of joint utilization natural gas transportation facilities;

c. Application and approval procedures of access through natural gas transportationfacilities;


facilities;

d. Rights and obligation of transporter and shipper;

e. Preparation and approval mechanism of Access Arrangement (AA);

f. Reporting obligation of implementation AA by Transporter;

g. Supervision of AA implementation;

h. Transitional provision.

� Open access is logic consequences from business activities that are natural

monopolies

� In developed countries, is used to reduce natural gas transportation cost,

initially to public interest (in Indonesia open access is mandatory by law)

OPEN ACCESS BENEFITOPEN ACCESS BENEFIT


initially to public interest (in Indonesia open access is mandatory by law)

� BPH Migas consistenly strives to open access in transmission gas pipeline

system, with the promulgation of Access Arrangement and assignmet

arrangemnet of toll fee on natural gas transmission pipelines

� For distribution area, BPH Migas have not been able to implement open access

and toll fee because the pipeline network was “dedicated hilir”

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� Lack of understanding of most business operators and stakeholders over the

consquences of Natural Monopoly on natural gas transportation business,

which is the most important consquences is Open Access,

The disagreement triggered reluctance business to implement Open Access,

OPEN ACCESS CONSTRAINSOPEN ACCESS CONSTRAINS


� The disagreement triggered reluctance business to implement Open Access,

� With the dedicated downstream business license, business operators as if to

deny the legitimacy of Open Access on their pipeline facilities.

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�� OPPORTUNITIESOPPORTUNITIES

1. Most of natural gas transmission pipeline in Indonesia was

transmission pipe owned by PT Pertamina Gas (East Java Gas Pipeline),

transmission pipa owned by PT PGN such as natural gas pipeline

section Grissik – duri, Grissik – Singapura, SSWJ I dan SSWJ 2,

transmission pipe owned by PT EHK and transmission pipe owned by

OPEN ACCESS OPPORTUNITYOPEN ACCESS OPPORTUNITY


transmission pipe owned by PT EHK and transmission pipe owned by

PT Majuko Utama Indonesia, have been operated as open access pipe.

2. “Dedicated hilir” pipeline belong to some private companies are

generally operated on high pressure are very likely to be operated as

open access pipeline.

3. Some pipeline section on dedicated hilir distribution area owned by

PT PGN, which is large pipe sections operated on high pressure are

likely to be operated as open access pipeline.

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OPEN ACCESS CHALLENGEOPEN ACCESS CHALLENGE

�� CHALLANGECHALLANGE

1. Owner of bigest natural gas distribution network in Indonesia is PT

PGN Persero Tbk, however since the beginning the network is not

prepared for open access.

2. PT PGN’s distribution area network still allows to be open access,

however it’s implementation requires stages and time.


however it’s implementation requires stages and time.

�Stage-1 is chose distribution pipe network which able to operated

as oppen access pipeline, that is particular pipeline segment on

high pressure pipe network.

�Stage – 2, is doing accounting unbundling (separated accounting)

against pipeline segment as mention on stage-1

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� Stage – 3, BPH Migas stipulate tariff after accounting unbundling is

implemented on pipeline segments as mention on stage-2

� Stage - 4, PT PGN prepare hardware and software on preparation of

open access on segmented pipeline as mention on stage-2

� Stage – 5, PT PGN prepare of access arrangement on segmented

pipeline as mention on stage -2.


pipeline as mention on stage -2.

3. For distribution area on medium pressure and low pressure need more

time and stages to be operated as open access pipeline

4. For natural gas distribution area on low pressure, in some countries with

consumers less than 100.000 are not required to implemented open

acess and unbundling.

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5. Somethings have to be considered on the implementation of open access/unbundling on

dedicated hilir pipeline system, are :

a) Regulation and rule of thumb that have to be fullfill for open acess/unbundling on

distribution pipeline, (multi entry point and multi exit point), which are :

i. “Spot market” mechanism on upstream and downstream gas business commodity.

ii. Determination of tender for eligible trader (tender winner entitled to be a gas buyer


ii. Determination of tender for eligible trader (tender winner entitled to be a gas buyer

and get certificate as shipper/trader/retailer)

On this mechanism, shipper/trader/retailer have to compete in order to improve

services to costumers.

b) Operational and technical condition distribution area nowadays was design as “tools

to sell” not “tools to transport”, because of the original infrastructure was built based

on demand ‘build on demand” not based on planning

Catatan: Pipa dedicated hilir yang diwajibkan Ditjen Migas untuk open access, fungsinya berubah dari “Tools to Sell”menjadi “Tools to Sell and Transport”

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c) Monitoring, regulating and legal consquences :

i. Operation and technical aspect :

� Configuration fixes, distribution pipeline system according to the open access

rules;

� Development of IT system for monitoring, flow control and management of

capacity in order to accommodate rights and obligations for multi shipper


capacity in order to accommodate rights and obligations for multi shipper

� Transporter will require shipper to maintain reliability of gas distribution

through availability of gas in the pipeline to maintain balancing stock

ii. Commercial aspects :

� Distribution tariff scheme which accommodate all components of the cost

including risk cost, due to changes in city planning as well as incentives for

quality operation and development of new areas.

15

BPH MIGAS’S ROLE RELATED TO OPEN ACCESSBPH MIGAS’S ROLE RELATED TO OPEN ACCESSBPH MIGAS’S ROLE RELATED TO OPEN ACCESSBPH MIGAS’S ROLE RELATED TO OPEN ACCESS

BPH Migas has play a significant role related open access of natural gas facilities to increase the utilization of domestic used, this is evidenced by :

1. BPH Migas stipulate tariff to all transmission pipe in Indonesia, which meant all of those pipe are ready to be open access.

2. BPH Migas enacting regulating account (accounting unbundling or


2. BPH Migas enacting regulating account (accounting unbundling or separated accounting) between transportation business and others.

3. BPH Migas has approved Access Arrangement (procedures for utilization of natural gas transportation facilities) at all transmission pipe in Indonesia.

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1. Open access is the most appropriate way to optimize utilization of gas pipelines.

2. Utilization of gas pipeline optimally (open access) caused reduction on transportation

cost so the gas price would be affordable and the country competitiveness will be

increased, therefore all participants have to comply open access regulation

3. Implementation of open access on transmission pipe is already applied in Indonesia.

4. Implementation of legal unbundling on natural gas transportation business on

CONCLUSIONCONCLUSIONCONCLUSIONCONCLUSION


4. Implementation of legal unbundling on natural gas transportation business on

transmission section and natural gas commercial business can be done, especially if the

tariff has been stipulated by regulatory body and accounting unbundling on those

section has been applied.

5. However, implementation of open access on distribution pipeline, considering

complexity of distribution pipe network, can be done stages, starting from high pressure

pipe, then medium pressure and may end on low pressure pipeline.

17

THANK YOUTHANK YOUTHANK YOUTHANK YOU


INDONESIA OIL AND GAS DOWNSTREAM REGULATORY AGENCIESINDONESIA OIL AND GAS DOWNSTREAM REGULATORY AGENCIES

(BPH MIGAS)(BPH MIGAS)

THANK YOUTHANK YOUTHANK YOUTHANK YOU

ATTACHMENTATTACHMENTATTACHMENTATTACHMENT


ATTACHMENTATTACHMENTATTACHMENTATTACHMENT

OPEN ACCESS OPEN ACCESS OPEN ACCESS OPEN ACCESS

PIPELINE DATAPIPELINE DATAPIPELINE DATAPIPELINE DATA

Transporter that have been implemented Open Access

No Entities Area Description

I PT Transportasi Gas Indonesia

1 Grissik - DuriOpen Access

2 Grissik - Batas Negara Singapura

II PT Perusahaan Gas Negara (Persero) Tbk

3 SSWJ I


Open AccessPertamina Receiving Point - Pagardewa Sumsel

Pagardewa - Labuhan Maringgai Sumsel, Lampung

Labuhan Maringgai - Bojonegara Lampung, Banten

4 SSWJ II

Open Access

Grissik - Pagardewa Sumsel

Pagardewa - Labuhan Maringgai Sumsel, Lampung

Labuhan Maringgai - Muara Bekasi Lampung, Jawa Barat

5 Sumatera Utara

Wampu - Belawan Binjai

Pantai Pakam Timur - Hamparan Perak Deli Serdang

Hamparan Perak - Paya Pasir Medan

III PT Pertamina Gas Area Description

Nanggroe Aceh Darussalam

6 Point B - Pupuk Iskandar Muda Aceh Utara, Lhokseumawe

7 PIM - Asean Aceh Fertilizer Aceh Utara

8 Asean Aceh Fertilizer - Kertas Kraft Aceh Aceh Utara

Sumatera Utara

9 Pangkalan Batu - Pangkalan Brandan Langkat

10 Pangkalan Brandan - Wampu Langkat, Binjai




Open Access


12 Pangkalan Brandan - Wampu Langkat, Binjai

Sumatera Selatan

13 Teras - Rambutan Muara Enim

14 Rambutan - Betung Muara Enim

15 Betung - Prabumulih Muara Enim, Prabumulih

16 Prabumulih - Cambai Prabumulih

17 Prabumulih - Cambai Prabumulih

18 Cambai - Simpang Y Prabumulih, O. Ilir, M. Enim


20 Lembak - Simpang Y Muara Enim, Ogan Ilir

21 Simpang Y - Pulau Layang Muara Enim, Ogan Ilir


22 Pulau Layang - PUSRI Palembang

23 Simpang Y - PUSRI Ogan Ilir, Palembang

24 Simpang Y - PUSRI Ogan Ilir, Palembang


26 Limau Timur - Prabumulih Prabumulih

27 Beringin - Limau Timur Muara Enim, Prabumulih

Jawa Barat & Banten

28 Kandanghaur Timur - Cilamaya Indramayu, Subang, Karawang

No. Sumatera Selatan Area Description


Open Access


29 Cilamaya - Citarik Indramayu, Karawang

30 Cilamaya - Citarik Karawang

31 Citarik - Dawuan Karawang

32 Citarik - Tegalgede Karawang, Bekasi

33 Tegalgede - Nagrak Bekasi, Bogor

34 Nagrak - Bitung Tangerang, Bogor

35 Bitung - Cilegon Tangerang, Serang

36 SKG Mundu - PLTG Sunyaragi Indramayu, Cirebon

37 SKG Mundu - Balongan Indramayu

38 Balongan - Kandanghaur Timur Indramayu


40 Citarik - Tegalgede Karawang, Bekasi


41 Pagerungan - ORF Porong Sumenep, Sidoarjo

Open Access

42 ORF Porong - Gresik Sidoarjo, Surabaya, Gresik

43 Gresik - PLN Gresik Gresik

44 Gresik - PLN Gresik Gresik

Kalimantan Timur

45 Tanjung Santan - SKG Bontang Kutai Kertanegara, Bontang

46 KM 53 - SKG Bontang Bontang


No. Jawa Timur Area Description



48 Tanjung Santan - Manifold KM 29 Kutai Kertanegara, Bontang

IV PT Energasindo Heksa Karya

49 Tempino Kecil - P. Selincah Jambi Open Access

V PT Majuko Utama Indonesia

50 Cilegon - Ciwandan Cilegon Open Access

VI PT Rabana Gasindo Usama

51 SKG Tegalgede - Stasiun Gas Citeureup Bekasi & Bogor Open Access

VII PT Rabana Gasindo Utama

52 SKG Tegalgede - Cikarang Listrindo Bekasi Open Access

VIII PT Gasindo Pratama Sejati

53 Citarik - SKG Tegalgede - Stasiun Gas Cikarang Karawang & Bekasi Open Access

Documents

Presented at - Indonesian Gas Societyindonesiangassociety.com/wp-content/uploads/2016/06/Keynote-2-And… · 7 PIM -AseanAceh Fertilizer Aceh Utara 8 AseanAceh Fertilizer -KertasKraft