Perusahaan Gas Negara April 2008 AGENDA

II..PGN’sPGN’s Overview & The Year in Review II. Indonesian Gas Industry III. Bus iness Review IV. Project Progress V. OOperationalperational and Financial Results VI. Future Plan I. PGN’s Overview & Recent Update PGN’s OVERVIEW

•A national leading gas transmission and distribution company. •Engaged in domestic downstream natural gas business to provide natural gas for industrial, commercial and household customers • Control 87% market share of transmission business and 93% of distribution •As of 2007, 735.94 MMScfd of natural gas were transported through transmission piliipeline and 422.52 MMSc fd gas sold to dtidomestic customers using dis tr ibu tion network •Listing on JSX and SSX (now Indonesia Stock Exchange), known as PGAS, on December 15, 2003 with IPO price of IDR 1,500 per share. As of March 26 2008 PGAS closing price was IDR 13,200 per share •The Republic of Indonesia owns 55% of shares while Public holds 45% of shares •On March 26, 2008, PGN’s market capitalization was IDR 60.6 trillion (USD 6.6 billion), ranked no. 8 among top ten listed companies, and rank no. 4 among top ten listed SOE, in Indonesian Stock Exchange

1 THE YEAR IN REVIEW

‰ South Sumatra West Java (“SSWJ”) Gas Pipeline Project 9 Pagardewa – Labuhan Maringgai – Bojonegara and Labuhan Maringgai – Muara Bekasi gas pipeline sections have been in operation since March and July 2007. 9 Grissik – Pagardewa gas pipeline section has been in operation since October 2007 9 Currently, the South Sumatra West Java (the system) gas pipeline is capable to transport gas up to 230 MMScfd. ‰ The 463 km of West Java Main Gas Distribution Pipeline is scheduled to complete in 2009. Going forward, the gas distribution expansion will be adjusted in line with the market demand. ‰ New gas supply agreements. 9 A 40 MMScfd Interruptible Gas Sales Purchase Agreement with ConocoPhillips has been signed for two years contract period. The gas will be transported through Grissik‐Duri and Grissik‐Singapore pipelines when excess capacity is available starting October 2007 9 A20‐30 MMScfd Gas Sales and Purchase Agreement with Husky Oil from Block Madura BD field of Husky Oil (Madura Ltd) has been signed for 20 years to supply East Java area. The gas is scheduled to deliver through PGN distribution pipeline starting 2011 ‰ PGN’s household sales price has increased by 60% against previous average selling price USD 4.48/MMbtu to USD 7.53/MMbtu starting from December 1, 2007. ‰ PGN’s industrial sales price has increased by 9.73% against previous average selling price USD 5/MMBTU to USD 5.49/MMBTU starting from August 1, 2007. ‰ Standard & Poor and Fitch have recently upgraded PGN’s bond rating from B+ to BB‐, or equivalent to Indonesia Sovereign Rating

2 IIII.. Indonesia Gas Industry INDONESIAN GAS MARKET OVERVIEW

• Indonesia has the largest proven natural gas reserves in Asia Pacific – As of Dec 2006, proven gas reserves in Indonesia were 92.9 trillion cubic feet, representing 8.2% of the world’s total proven reserves • The tiitransmission and dis tr ibu tion ifinfras truc ture has a siifitignificant role in the dtidomesticgasidindus try – Majority of the gas reserves are located in Sumatra and Kalimantan, far away from the fuel‐ consuming, industrial areas like Java – Domestic gas consumption has reached 1.35 TSCF in 2006 and is expected to reach 1.53 TSCF by 2008. This rising trend would require a further expansion of the nation’s pipeline network

Natural Gas Proven Reserves in Asia Pacific Indonesian Gas Reserves as of 1 Jan 2005 IdIndones ia 92. 9 Australia 92.0 Malaysia 87.5

China 86.5 India 38.0 Pakis tan 28. 2 My anmar 19.0

Papua New Guinea 15.4 Bangladesh 15.4 Vietnam 14.1

Brunei 11.8 Proven = 97.26 TSCF Thailand 10.6 Potential = 88.54 TSCF Gas Reserves (TSCF) 0 20406080100 Total = 185.80 TSCF Source: BPH Migas Source: BP Statistical Review of World Energy 2007Trillion Cubic Feet 3 POTENTIAL SHIFT FROM OIL TO GAS CONSUMPTION

• Primary energy consumption in Indonesia has reached 11.8 BScfd in 2006 Indonesia’s Primary Energy Consumption • Oil contribution in total energy consumption continue to decline due to by Energy Type the surging oil price and the reduction of oil subsidies in Indonesia – Indonesian government reduced the oil subsidies in Oct 2005. As a result, the subsidized HSD price has jumped from USD 5.84 /MMBtu to USD 11.95 /MMBtu in Oct 2005, representing a price increase of more than 100% – Gas has a strong price advantage against oil and the oil‐related subsidy reduction resulted in a major industry shift from oil to gas consumption – The new gas transmission pipeline is predicted to accelerate the shift from oil to gas consumption

Source: BP Statistical Review of World Energy 2007 Relative Energy Price (Mar 1, 2008) PGN Gas Price Vs HSD Price

US$/MMBtu

Gasoline (non-subsidized) 27.4 30.00

Kerosene (non-subsidized) 25.6 24.97 HSD (non-subsidized) 25.0 20.00 Diesel (non-subsidized) 23.5 Gasoline (subsidized) 15. 9 13.13 10.00 5.49 0.00 LPG (non-subsidized) 18 . 1 HSD (subsidized) 13 . 1 1/31/2002 5/1/2003 8/1/2004 11/1/2005 2/1/2007 3/3/2008 MFO (non-subsidized) 15. 3 LPG (subsidized) 10 . 5 Kerosene (subsidized) 6.3 HSD Subsidized Price (US$/MMBtu)

Distributed Gas 5.5 HSD Unsubsidized Price (US$/MMBtu) 0 5 10USD / mmbtu 15 2 0 2 5 3 0 PGN Average Sales Price (US$/MMBtu) Source: Pertamina 4 INDONESIAN GAS MARKET OUTLOOK

Contracted, Committed and Potential Gas Supply & Demand for Major Regions in Indonesia

REG II (NORTH SUMATERA) REG II (NORTH SUMATERA) Source: Dirjen M igas Year Year 20072007 20092009 2011 SupplySupply 3535 27.527.5 101 Demand 218.5 219.7 219.7 Demand 481.5 526.7 535.7 Balance -183.5 -192.2 -118.7 Balance -446.5 -499.2 -434.7

Medan

Dumai

Duri

S U M A KALIMANTAN T E R A SULAW ESI

Grissik IR IAN J AY A

Pagardewa REG V (EAST JAVA) R EG V (EAST JAVA) Jakarta Year 2007 2009 2011 JAW A Year 2007 2009 2011 Supply419.8 419.8794.8 794.8821.9 981.9 REG IIIREG (CENTRAL, III (CENTRAL, SOUTH SUMATERA SOUTH & REG IV (CENTRAL JAVA) Demand 565.4 747.3 963.7 SUMATERAWEST &JAVA) W EST JAVA) REG IV (()CENTRAL JAVA) Demand 926.4 1,155.3 1,351.7 Year 2007 2009 2011 Year 2007 2009 2011 Balance -145.6 -47.6 -141.7 Year 2007 2009 2011 Year 2007 2009 2011 Balance -506.6 -360.4 -369.7 Supply 2413.8 2761.9 2700.5 Supply 0.7 167.9 195 SupplyDemand 2,413.82981.6 2,761.93491.7 3491.8 3,100.5 DemandSupply143 0.7195.7 167.9193 195.0 Balance -567.8 -729.7 -791.3 Balance -142.3 -26 2 Demand 3,557.6 4,408.6 4,467.3 Demand 198 256.3 259.9

Balance -1,143.8 -1,646.7 -1,366.8 BlBalance -197. 3 -86. 6 -64. 9

5 IIIIII.. Business Review PGN’s EXISTING BUSINESS

• PGN has a dominant market position in gas distribution and transmission in Indonesia • The SSWJ Project will provide greater control over volumes delivered to the distribution business and generate stable earnings from the transmission volume

GSPA PGN • Retail & Industry Distribution Sales (GSA) Customers Gas Purchase SSWJ IPP mm •

Upstrea GTA PGN • SSWJ (PGN) • Chevron • Grissik – Duri (()TGI) TiiTransmission Transportation • Grissik –Singapore (TGI) • Singapore

Gas Supply for Distribution Business Distribution – Sale of Gas to End User TTransmission – Transport Third Party’s Gas • Gas Sales & Purchase Agreement • Gas Sales Agreements (GSA) • Gas Transmission Contract (GTA) (GSPA) – Minimum pay volumes – Long-term contract – Long-term contract – Price in US$ & IDR – Minimum ship-or-pay volumes – Take-or-pay volumes – Tariffs in US$ – Fix price in US$

6 EXISTING TRANSMISSION NETWORK

• PGN and its 60%-owned subsidiary TGI operate transmission pipelines with a total length of 1,074km and a combined capacity of 869 mmscfd. After completion of the SSWJ Project, the capacity will increase to 1,839 mmscfd, representing an increase of more than 100%

PLN – Medan Grissik – Singapore Capacity = 80 mmscfd Capacity = 364 mmscfd

Medan Grissik – Pagardewa – Labuhan Maringgai – Muara Bekasi – Rawamaju (SSWJ II) Capacity = 440 mmscfd Duri

KALIMANTAN

SULAWESI

Grissik IRIAN JAYA Pagardewa Grissik – Duri Capacity = 425 mmscfd

Jakarta JAWA

Pagardewa – Labuhan Maringgai – Cilegon (SSWJ I) Capacity = 530 mmscfd

7 EXISTING DISTRIBUTION NETWORK

• PGN has developed an extensive distribution network covering 9 major cities in Indonesia • The network and facilities are managed by three SBUs – West Java (SBU I), East Java (SBU II) and Sumatra (SBU III)

Medan – SBU III Capacity = 46 mmscfd

Batam – SBU III Capacity = 75 mmscfd

Pekanbaru – SBU III KALIMANTAN Capacity = 65 mmscfd SULAWESI IRIAN JAYA

Palembang – SBU I Bekasi + Karawang – SBU I Surabaya & Surrounding – SBU II Capacity = 4 mmscfd Capacity = 70 mmscfd Cappyacity = 230 mmscfd

Banten – SBU I JAWA Capacity = 79 mmscfd

Jakarta + Bogor – SBU I Cirebon – SBU I Cappyacity = 175 mmscfd Cappyacity = 8 mmscfd Total Capacity : 752 MMScfd Total Length : 3,212 km

8 STRONG DISTRIBUTION CUSTOMER BASE

• Industrial customers continue to dominate PGN’s customer base and drive PGN’s distribution business growth. As of September 30, 2007, sales volume of industrial customers was 396 MMScfd or equal to 98% of PGN’s sales. • Customer composition

2006 Industrial Customer Consumption 2007 Industrial Customer Consumption

9 PGN’s MARKET SHARE

DISTRIBUTION

2006 2007

TRANSMISSION

2006 2007 10 VOLUME PROJECTION

((MMScfdMMScfd)) Distribution 2008E SBU I 500 SBU II 130 SBU III 86 Total 716

Transmission 765

Note : 2008 average Distribution volume includes potential new contracts of 100 MMScfd with PLN 11 IVIV.. Project Progress SSWJ PROGRESS & KEY MILESTONES

ƒ The overall SSWJ Project is expected to be completed by Oct 2008 with the completion of the Pagardewa-Labuhan Maringgai parallel line. The total capacity of SSWJ is expected to be 970 mmscfd

March 2007 July 2007 October 2007 – March 2008 October 2008 – Pagardewa – Labuhan Labuhan Maringgai – Muara Completion of SSWJ II Pagardewa Gas Compressor has Completion of SSWJ I Maringgai – Bekasi section was completed Grissik-Pagardewa completed and will maximize the Pagardewa-Labuhan Bojonegara sections and gas flow from Pertamina section was flow rate of gas from Conoco Maringgai Parallel Line were completed and began. The gas pipelines can completed and gas Phillips and Pertamina. The section is expected to commenced transport 230 mmscfd of gas flow from Conoco compressor will increase the total be completed operation from South Sumatra to West Phillips began capacity from 230 mmscfd to Java approximately 470 mmscfd

Transmission Capacity: 230 mmscfd 230 mmscfd 470 mmscfd 970 mmscfd

ConocoPhillips Gas Plant

Pertamina Gas Plant

Latest statu s (as of March 25 2008): Stringing and mainline welding completed Construction progress : 90.1 % Overall progress (including material) : 96.3% Target for completion : October 2008 Operated Compp(leted (Parallel Line) Under Construction (Parallel Line) Pagardewa Compressor

12 WEST JAVA DISTRIBUTION EXPANSION

The West Java Distribution Expansion Project with 463km main pipelines commenced in 2005. The project aims to distribute the gas from SSWJ and is expected to be fully completed in 2009

• PGN is exppganding its distribution network in Jakarta, Bekasi, Cikampek, Bogor, Banten and the surrounding Palembang areas

• The expansion started in 2005 and is scheduled to reach completion in 2009. Bekasi Karawang The Project will expand the distribution Lampung network in West Java by 463 km in line with increasing gas volume transported from South Sumatra.

Banten Bogor Cirebon • After completion PGN total distribution capacity will reach +1,500 MMScfd.

• The pro jec t is fun de d by Wor ld Ban k v ia IBRD (USD 80 million) and PGN’s internal cash flow

13 WEST JAVA DISTRIBUTION PROGRESS & KEY MILESTONES

Aug 2007 Sept 2007 Dec 2007 Mar & Jun Oct 2008 – Pipeline Completion of World Bank Distribution mainlines for Distribution Distribution mainline 2008 Packages Rawamaju-Kalimalang-Kedep- mainline for Bitung- for Bitung-Batuceper Distribution Pondok Ungu and Rawamaju - Batu Ceper was and distribution mainlines for Feb 2009 – Pipeline Walahar were partially partially completed branchlines for Banten, Banten and Completion of PGN completed and commenced and commenced Bogor, Jakarta, Bekasi Greater Packages Jakarta are operations. The pipelines operations to and Karawang are Dec 2009 – Completion expected to received gas from SSWJ to strengthen the expected to complete of Bojonegoro-Serpong complete PGN’s existing and new existing network by Dec 2007 transmission mainline customers

*

14 PROJECTED CAPEX

(Million USD) Project 2008E

Transmission 163.7

Distribution 103.0

LNG 0.9 Total 267.6

15 VV.. Operational & Financial Results OPERATING PERFORMANCE HIGHLIGHTS

Transmission Volume Distribution Volume

60% 1,000 500 110% 56% 84% 52% 78% 450 49%90% 422 69% 46% 47% 50% 735 750 55% 681 400 70% 350 323 42% 602 308 40% 287 262 50% 500 475 300 30% 365 250 30% mmscfd mmscfd 10% 200 20% 150 250 -10%

100 10% 50-30% 0 -50%0 0% 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007

Transmission Volume Volume Transmission Utilization Utilization (RHS) (RHS) Distribution Volume Volume Distribution Utilization Utilization (RHS) (RHS)

16 FINANCIAL HIGHLIGHTS

Revenue Trend EBITDA and EBIT Trend 10,000 8,802 5,000 50% 9,000 44% 47% 4,500 45% 8,000 1,208 40% 4,094 6,632 4,000 40% 7, 000 34% 35% 5,434 1,101 3,500 35% 6,000 3,082 4,458 3,000 2,947 30% 5,000 1,153 3,596 847 2,500 2,393 25% 4,000 billions Rp In 2,175 627 7,594 In Rp. billions 2,000 1,552 20% 3,000 5,531 1,555 1,500 15% 4,280 1,230 998 2,000 3,610 818 2,969 1,000 10% 1,000 500 5% 0 0 0% 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Distribution revenue Transmission revenue EBITDA EBIT EBITDA margin (RHS)

NtINet Income 2,000 1,800 1,600 1,400

ns 1,200

1,000 1,892 800 1,573

In Rp. billio 600 400 862 200 509 474 0 2003 2004 2005 2006 2007

17 INCOME STATEMENT 2006 vs 2007

(billion rupiah) FX Gain/Loss 8,802 Loss Gain Rp 504 bio Rp 319 bio

FY 06 FY 07 6,632 Forex as of : - 31 December 2006 US$ 1 = Rp. 9.020 - 31 December 2007 US$ 1 = Rp. 9.419 - 31 December 2006 JPY 1 = IDR 75.80 - 31 December 2007 JPY 1 = IDR 83.06 4,094

2,947 3,082 2,393 1,922 1,893 1,972 1,630 1,428 1,573

Revenue EBITDA Operating Operating Net Income Adjusted Net Expense Income Income 2006 2007

18 CONSOLIDATED BALANCE SHEET

(in billion Rupiah) 2006 2007 %

Current Assets 1.973 3.715 88 Non Current Assets 13.141 16.633 27 Total Assets 15.114 20.348 35

Current Liabilities 1.360 3.169 233 Non Current Liabilities 7.493 10.015 34 Minority Interest In Net Assets of a 558 729 31 Subsidiary Government Project Funds 127 127 - Total Shareholders Equity 5.576 6.308 13 Total Liabilities And Shareholders Equity 15.114 20.348 35

Forex as of : - 31 December 2006 US$ 1 = Rp. 9.020 - 31 December 2007 US$ 1 = Rp. 9.419

19 IVIV.. Future Plan LNG RECEIVING TERMINAL

LNG Receiving Terminal Regasification Capacity : 2 –3– 3 MTPA Gas Source : (250 – 400 Domestic / mmscfd) Overseas LNG Vessel

Customers : - Household Distributed through - Commercial existing pipeline - Industrial

• Based on feasibility study in 2003, to fulfill increasing demand and to secure gas supply in Java, PGN plan to build LNG Receiving Terminal that will start to operate in 2014. • IlImplement ttiation program : - Deepening Feasibility Study - Proceed of FEED and EIA - Socio-cultural study for preparation of land acquisition. - Secure of gas supply from domestic ((gBontang-Kalimantan or Tangguh-Papp)ua) or overseas

20 DURI – MEDAN TRANSMISSION PIPELINE

Location Project Scope f Duri ‐ Medan transmission pipeline (28” ‐ 509km) f Additional: ƒ Compressor : Simpang Dumai (9, 000 HP) ƒ Kondur spurline : BY ‐ Simpang Dumai (20” ‐ 155km)

Justification f A critical step in sustaining and expanding the North‐ Sumatra gas distribution market f Strategic opportunity to establish PGN’s Sumatra gas dominance by locking‐up gas supply f Complete the integration of the Sumatra island‐wide transmission network

Status f Feasibility study and FEED have been completed f EIA Meth hdlodology has been approved by GOI f Principal permits from the MEMR has been received Key Statistics f Financing arrangements underway f Gas supply status from South Sumatera is being f Date of Completion: Target 2012 negotiated with potential sources like ConocoPhillips f Total Length: 664 km (incl. spurline) and Kondur Dumai f Capacity: 250 mmscfd

21 Integrated CBM Development with Pipeline Transmission

Implementation Program: - MoU with Local Regencies in South South Sumatra Sumatra Province: Musi Rawas and Banyuasin signed in 2006 and with Muara Enim signed in January 2007 - MoU with coal mining company, PT Bengkulu Bukit Asam,Asam, South Sumatra signed in March 2007 Lampung - MoU with CBM operator, Santos, signed in 2006 - Conducted geological study in Muara Legend: EnimEnim,, South Sumatra until mid 2007 to identify potential drilling location : CBM Field (partially supp orted by Jap anese institution) - Conduct CBM study in South Sumatra and Kalimantan to identify potential CBM location, inventory CBM CBM supply for existing SSWJ P/L drilling, preliminary drilling desi gn, est tblihablish envi ronment tlal • CBM reserves in South Sumatra of 183 TCF consideration, identify regulatory for CBM development, and recommend • the CBM fileds in South Sumatra are located near the South Sumatra West CBM model contract Java (SSWJ) transmission pipelines which can be utilized as off taker of gas from CBM development, and therefore support CBM upstream activ ities.

22 PILOT PROJECT CNG PONDOK UNGU

Dispenser (2 unit) Taxi

Compressor MRS Gas Dryer

Truck/Trailer to Fill‐Post (2 uni)it) IdIndustri es Storage Tank Priority Panel

1. CNG system is developed as a market expansion strategy to meet gas demand outside the PGN’s gas pipeline network 2. Site Location at Pondok Ungu –Bekasi, West Java 3. CNG Station is owned and will be operated by PGN to sell the CNG to private distrib utor company. 4. Station Capacity is 3 MMSCFD to fulfill demand industries and NGV 5. Start construction in 2008 6. Start operation in 2009 7. Status: process of EPC Contractor Bidding

23 Thank You

PT Perusahaan Gas Negara (Persero) Tbk Investor Relations Jl. K H Zainul Arifin No. 20, Jakarta 11140 Indonesia Ph: 62 21 6334838 Fax: 62 21 6331632 www. pgn. co. id