OPTIMIZATION OF ABADI GAS SALES FOR CENTRAL AND EASTERN DOMESTIC MARKETS

• Main Author: Putu Putra Jaya Parwatha, I
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/47607
• Institution: Institut Teknologi Bandung

Natural gas is likely to play a far more significant role in satisfying the increase of global energy demand. Indonesia is one of the top ten LNG exporter countries in the world. Since the oil production declining in 2003, Indonesia encourages the utilization of natural gas for the domestic market and reduce the volume of LNG export. Abadi gas field with its reserve circa 10.73 Tscf is potential to satisfy the future natural gas demand in Indonesia. This study aims to identify the potential domestic market for Abadi gas field development, especially in Central and Eastern Indonesia. The onshore LNG plant production capacity is 9.5 MTPA which will be constructed in Nustual Island, Maluku Province. The LNG plant expected to start production in 2028. The project investment cost is 19.8 billion USD. The projects that have been identified in this study consist of the gas power plant in smelter projects, electricity sector, and industrial zones. The total estimated demand then forecasted to 2028 following the several assumptions provided by Ministry of Energy and Mineral Resources. The other economic assumptions are using the data issued by the Central Bank of Indonesia. The typical values for the cost contributors or "add on costs" in the LNG logistics chain applied to simplify the end gas price analysis. The estimated gas demand from the identified projects could absorb circa 39% of the Abadi LNG production or equal to 492.13 MMscfd. The Abadi LNG project achieves the break-even point when the LNG FOB price is at 7.31 USD/MMBtu, and the Brent oil price is at 50 USD/bbl. With certain adopted assumptions in the project economic analysis, the LNG FOB price should be adjusted to 6 USD/MMBtu to meet with the willingness to pay of the domestic market. Since LNG domestic need to be sold at a certain price, then the LNG FOB for the export market has to be sold at a higher price or at 8.33 USD/MMBtu. It is still within the range of historical Indonesia LNG export price from 6.74 USD/MMBtu at the lowest and 18.23 USD/MMBtu at the highest.