RECOMMENDED STRATEGY FOR LNG HUB DEVELOPMENT TO INCREASE RETAIL LNG MARKET IN NORTHERN SUMATERA (CASE STUDY OF PT PERTAGAS NIAGA)

• Main Author: Stephani, Dina
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/63604
• Institution: Institut Teknologi Bandung

Liquefied Natural Gas (LNG) is natural gas condensed into a liquid at atmospheric pressure by being cooled down to -160 0C. LNG has a volume of about 1/600 of its gas state at standard temperature and pressure, making it easier and more economical to be distributed, especially to customer who has relatively long distances from gas field. LNG is still perceived as the bridging product until the customers have access to Pipeline Gas. For the last couple of years, few of LNG customers of Pertagas Niaga have switched to Pipeline Gas once it is available. The lower price of Pipeline Gas is also a factor that makes LNG less competitive than Pipeline Gas. Those conditions have caused a significant decreased of LNG sales volume and cause the LNG facilities to be underutilized and minimum volume of transportation contract can not be achieved. If the costs of LNG Filling Station are to be borne to the sales of current contracted volume, the unit cost of LNG will be too high to be accepted by the market. The unit cost of LNG could be reduced by increasing the sales volume and reducing the operating cost at the same time. Increasing sales volume from industrial sector is quite a challenge in this condition, they become more price sensitive. For industries with significant volume of fuel consumption, Pipeline Gas would be more economically feasible. So the LNG sales need to target new customer segments that consume gas in smaller volume which are not economically feasible to be supplied with Pipeline Gas which are commercial sector and small-scale industry. A smaller volume of gas consumption requires a different LNG supply chain than the existing Pertagas Niaga’s LNG supply chain due to some technical and economic considerations. The technical aspect to be considered is that smaller gas consumption means different LNG infrastructure requirements. The LNG needs to be supplied in smaller transportable storage instead of the current LNG ISO Tank. To reduce the LNG transportation cost, the LNG supply point can be shifted closer to the customer's site. The LNG is not directly delivered from Arun LNG Terminal to the customer's site, but from the transit area in Medan, the LNG Hub. Developing LNG Hub as an intermediary supply point is expected to generate efficiency on the transportation cost and acquires new customer segments.