FY2019 Study on business opportunity of High-quality Energy Infrastructure to Overseas “Pursue possible implementation of Feasible Project Structure for LNG Distribution and Power Plants(LDPP) and Business feasibility study for creating new energy demand in Eastern Indonesia” Final Report
February 2020
Mitsubishi Heavy Industries, Ltd. Shizuoka Gas Co., Ltd. Marubeni Corporation
CONTENTS
Page 1. PREFACE 1-1 1.1 Study Contents 1-1 1.2 Study Methodology and Study Team Formation 1-3 2. PROJECT PROFILE AND WORK METHODOLOGY 2-1 3. NEEDS, REGULATORY AND DEMAND ANALYSIS 3-1 3.1 Needs Analysis 3-1 3.1.1 Assessment on East Indonesia’s Electrification Ratio 3-1 3.1.2 Confirmation of Consistency with National and Regional Development Plan 3-2 3.2 Regulatory Analysis 3-6 3.2.1 Regulatory Analysis on Natural Gas Pricing 3-6 3.2.2 Regulatory Analysis on Multiple Business Scheme 3-7 3.2.3 Regulatory Analysis on the Required Permits for LDPP Project 3-9 3.3 Demand Analysis 3-22 4. SOCIAL/ECONOMIC ANALYSIS 4-1 4.1 Outline of Social/Economic Analysis 4-1 4.2 Assumptions of Social/Economic Analysis 4-1 4.3 Result of Social/Economic Analysis 4-2 4.3.1 Result of Social Cost Benefit Analysis 4-2 4.3.2 Sensitivity Analysis 4-2 4.4 Qualitative Social /Economic Benefits 4-3 4.4.1 Improved Trade Deficit 4-3 4.4.2 Cold Heat Utilization 4-3 4.4.3 Potential Contribution to Nearby Tourism Industry 4-4 4.4.4 Increased Energy Independence (National/Energy Security) 4-5 5. FINANCIAL FEASIBILITY ANALYSIS 5-1 5.1 Assumptions 5-2 5.2 Result of Cashflow Analysis 5-3 6. BUSINESS SCHEME OPTIONS 6-1 6.1 Midstream Infrastructure to serve “Segment B” 6-1 6.2 Hypothetical Business Scheme Options 6-6 6.2.1 Option 1: B-to-B 6-6 6.2.2 Option 2: PPP AP for Distribution 6-7
i
6.2.3 Option 3: PPP AP for Distribution and Satellite 6-8 6.3 Assessment on the Possible Contracting Agency under PPP AP 6-9 7. NEXT STEP SUGGESTION 7-1 8. HUB CONSTRUCTION PLAN 8-1 8.1 Study for the HUB location 8-1 8.2 Facility Design 8-2 8.2.1 HUB facility design 8-2 8.2.2 Setting for large-scale LNG vessels to be utilized as FSU 8-3 8.2.3 Study for FSU operation 8-5 8.2.4 Study for BOG handling method 8-6 8.2.5 Power supply equipment of HUB 8-9 8.2.6 Other HUB facilities 8-9 8.3 HUB Operation & Maintenance Policy and Organization Study 8-16 8.3.1 HUB Operation & Maintenance 8-16 8.3.2 Organization 8-16 9. STUDY ON NEW DEMAND CREATION 9-1 9.1 Study on Demand Firmness 9-1 9.1.1 Selection of Candidate Sites 9-1 9.1.2 Study on Natural Gas Demand 9-1 9.2 Study on LNG transportation method 9-10 9.2.1 Example of Japan 9-10 9.2.2 Study on North Sulawesi 9-11 9.3 Site Visits 9-17 9.3.1 Interview with the state governor of North Sulawesi 9-17 9.3.2 Other investigations 9-18 9.3.3 New industrial park project site in Bitung 9-18 9.3.4 Port Bitung 9-19 9.3.5 Port Manado 9-19 9.3.6 Resort hotel in Likupan 9-20 9.4 Further Advanced Energy Utilization with reference to Japanese examples 9-20 9.4.1 Example of Advanced Energy Utilization in Japan 9-21 9.4.2 Possibility of Advanced Energy Utilization in Indonesia 9-24 9.5 Contribution to development of Indonesia through the natural gas spread 9-25
ii
10. STUDY TO IMPROVE FINANCIAL FEASIBILITY OF SMALL SITES 10-1 10.1 Financial Feasibility of Small Scale Power Plant 10-3 10.2 Optimal Facility Installation and Operation for Investment Amount 10-9 10.2.1 Examination on Possible Amount of Investment 10-9 10.2.2 Small Power Plant Facility Installation 10-12 10.2.3 Operation of Small Power Plant 10-14 11. REPORTING SESSION FOR RELEVANT INDONESIAN STAKEHOLDERS 11-1 12. SOCIAL AND ENVIRONMENTAL EFFECTS INCL. CO2 REDUCTION 12-1 13. STUDY ON ADVANTAGE OF JAPANESE COMPANIES, BENEFITS TO JAPAN 13-1 14. CONCLUSION 14-1
Appendix Appendix 3-1 Related PPP Regulations Framework in Indonesia Appendix 8-1 Typical facility BLOCK FLOW DIAGRAM of HUB Appendix 8-2 Current overview of large-scale LNG carrier
iii
List of charts Figure 2.1 Candidate Locations of LDPP Project and Segmentation Figure 3.1 2018 Electrification Ratio in Eastern Indonesia Table 3.1 List of LDPP Project Targeted Sites and Status in RUPTL Figure 3.2 Overview of PSN and Priority Projects Figure 3.3 The Gas Price based on MEMR Regulation No. 11/2017 and MEMR Regulation Figure 3.4 Business Scheme Determination Framework Figure 3.5 Overview of Required Permits Figure 3.6 Overview of Regulatory Framework of the LDPP Project’s Related Permits Figure 3.7 Hierarchy of Marine Spatial Plan in Indonesia Figure 3.8 Utilization of Marine Spatial Planning and its Relation to Marine Location Permit Figure 3.9 Hierarchy of Spatial Planning in Indonesia Figure 3.10 Procedure of obtaining Location Permits by Business Entity for the Purpose Investment and Business Activities Figure 3.11 Types of Required Document Application to Obtain Environmental Permit Figure 3.12 Process and Period of AMDAL and Environmental Permit Issuance Figure 3.13 Initial Hypothesis of Demand Category Table 3.2 Gas Demand Projection for Each Gas-Sourced Power Plant based on RUPTL 2019 Table 4.1 Avoided Costs of Electricity Generation Table 4.2 Avoided Social Cost of Carbon Table 4.3 Result of Social Cost Benefit Analysis (Base Case) Table 4.4 Sensitivity Analysis (Economic NPV) Table 4.5 Sensitivity Analysis (Economic IRR) Figure 4.1 Cold Heat Utilization Figure 4.2 VGL Utilization Table 4.6 Supplier Country, Petroleum Gas (2017) Table 4.7 Supplier Country, Oil Import (2017) Table 5.1 Conditions of each Power Plant Figure 5.1 Service and Cash Flow of the Project Table 5.2 Assumptions of the cash flow analysis Figure 5.2 Assumed LNG demand by the Project Table 5.3 Assumptions of the cash flow analysis Figure 6.1 Midstream Infrastructure Figure 6.2 Benefit of Diesel to gas, Coal to gas conversion Figure 6.3 Segment A LNG terminal as filling station for Segment B
iv
Figure 6.4 Regasification Unit Generating Cold Heat for Ice Production and Cold Storage Figure 6.5 Modular PLTMG for demand risk mitigation Figure 6.6 LNG VGL to replace LPG Figure 6.7 B-to-B Business Scheme Figure 6.8 PPP AP for Distribution Figure 6.9 PPP AP for Distribution and Satellite Table 8.1 Existing FSU projects Figure 8.1 Large-scale LNG vessel to be utilized for FSU (model) Figure 8.2 Large-scale LNG vessel to be utilized for FSU (model) Table 8.2 Specifications on model vessel Figure 8.3 Mooring Plan of FSU/LNG carrier Figure 8.4 Example of mooring with FSU and LNG carries Figure 8.5 Loading arms on a jetty Figure 8.6 Example of quick release hook on a jetty Table 8.3 FSU crew Table 8.4 Marine house members Figure 9.1 Change of LNG sales in Japan for different purpose Figure 9.2 Representative products and facilities in Japan using natural gas Figure 9.3 Configuration of consumer CHP using internal combustion (gas engine) Figure 9.4 Image of total energy efficiency improvement with CHP Figure 9.5 Map of the northern part of North Sulawesi Table 9.1 Potential natural gas demand of general hospitals, shopping malls and hotels in Manado Table 9.2 Potential natural gas demand of hotels in Likupang Figure 9.6 Details of potential demand in Manado Figure 9.7 Details of potential demand in Likupang Figure 9.8 Canning process Table 9.3 Potential natural gas demand of the canning plants in Bitung Table 9.4 Details of potential demand in Bitung Fig 9.9 Details of potential demand in Bitung（distribution） Table 9.5 Natural gas potential demand of the three areas in North Sulawesi (Summary) Table 9.6 Possibility of upward fluctuation of natural gas demand (Summary) Fig,9.10 General flow of LNG production and supply in Japan Figure 9.11 LNG transportation scheme (image) Figure 9.12 Introduction of CHP (image)
v
Table 9.7 Assumption of the cases Table 9.8 LNG transportation cost to the three areas in North Sulawesi in each case Table 9.9 Number of leased container for each case Figure 9.13 Interview with the state governor of North Sulawesi Table 9.10 Schedule of field investigation in North Sulawesi Figure 9.14 New industrial park project site Figure 9.15 Port Bitung Figure 9.16 Port Manado Figure 9.17 PLN substation and adjacent solar generation system Figure 9.18 Concept of power interchange system in an apartment ‘T-grid system’ Figure 9.19 Concept of ‘power interchange’ Figure 9.20 VPP (image) Figure 9.21 Example of LNG cold heat utilization Table 10.1 – Small Scale Sites - PLN new power station development plan Figure 10.1 Map of Morotai, Location of SKPT Figure 10.2 Development plan of SKPT and power station location Figure 10.3 SKPT Morotai Zone Layout/Facility plan/Current status as of 2018 Figure 10.4 Power Station block Flow Diagram Figure 10.5 Power Station Foot Print concept Figure 10.6 The Voyage route from Kendari LNG HUB (Marked on Google Earth) Figure 10.7 LNG Distribution Route(Middle/Large scale Site Route, Small LNG Carrier) Figure 10.8 LNG Distribution Route(Small Scale Site route (1) Container Carrier or Self-propelled barge) Figure 10.9 LNG Distribution Route(Small Scale Site route (2) Container Carrier or Self-propelled barge) Figure 10.10 LNG Distribution Route(Small Scale Site route (3) Container Carrier or Self-propelled barge) Table 10.2 List of major Business items and assets Table 10.3 Typical work split by business body
vi
Abbreviation list AMDAL Analisa Mengenai Dampak Lingkungan (Environment Impact Assessment) Kementerian Agraria dan Tata Ruang/ Badan Pertanahan Nasional (Ministry ATR-BPN of Agrarian Affairs and Spatial Planning / National Land Agency) BOG Boil off gas BOR Boil off rate BTU British Thermal Unit BPP Biaya Penyediaan Pokok (Cost Electricity Supply) CF Capacity Factor CMMA Coordinating Ministry for Maritime Affairs and Investments CMEA Coordinating Ministry for Economic Affairs COD Commercial Operation Data COE Cost of Electricity ER Electrification Ratio FPP Floating Power Plant, Storage, and Regasification FSRU Floating Storage Regasification Unit FSU Floating Storage Unit GHG Greenhouse Gas Emission IGG Inert Gas Generator Kementerian Kelautan dan Perikanan (Ministry of Marine Affairs and KKP Fisheries) Kementrian Lingkungan Hidup dan Kehutanan (Ministry of Environment and KLHK Forestry) Komite Percepatan Penyediaan Infrastruktur Prioritas (Committee for KPPIP Acceleration of Priority Infrastructure Delivery) LDPP LNG Distribution and Power Plants LNG Liquefied Natural Gas MEMR Ministry of Energy and Mineral Resources METI Ministry of Economic, Trade, and Industry of Japan MOHA Ministry of Home Affair MOT Ministry of Transportation MPP Mobile Power Plant MW Mega Watts OSS Online Single Submission Perda Peraturan Daerah (Regional Government Regulation) Permen Peraturan Mentri (Ministerial Regulation) Perpres Peraturan Presiden (Presidential Regulation) PLN Perusahaan Listrik Negara (State Electricity Company) PLTD Pembangkit Listrik Tenaga Diesel (Diesel Power Plant) PLTG Pembangkit Listrik Tenaga Gas (Gas-sourced Power Plant) PLTGU Pembangkit Listrik Tenaga Gas Uap (Combined Cycle Power Plant) PLTMG Pembangkit Listrik Tenaga Mesin Gas (Gas Engine Power Plant) PLTU Pembangkit Listrik Tenaga Uap (Coal-fired Power Plant)
vii
Peraturan Mentri Kelautan dan Perikanan (Ministry of Marine Affairs and PMKP Fisheries Regulation) PMP Peraturan Menteri Perhubungan (Ministry of Transportation Regulation) PMT Project Mission Team PP Peraturan Pemerintah (Government Regulation) Pre-FS Pre- Feasibility Study PSN Proyek Strategis Nasional (National Strategic Plan) Rencana Pembangunan Jangka Menengah Nasional (Central/National Government RPJMN Medium Term Plan) RTRL Rencana Tata Ruang Laut (Marine Spatial Plan) RTRW Rencana Tata Ruang Wilayah (Land Spatial Plan) RUKN Rencana Umum Ketenagalistrikan Nasional (National Electricity Master Plan) Rencana Umum Penyediaan Tenaga Listrik (PLN's Electricity Supply Master RUPTL Plan) RZInci Rencana Zonasi Inci (Detail Zoning Plan) RZKL Rencana Zonasi Kawasan Laut (Marine Zoning Plan) RZKSN Rencana Zonasi Kawasan Strategis Nasional (National Strategic Zoning Plan) Rencana Zonasi Kawasan Nasional Tertentu (Particular National Strategic RZKSNT Zoning Plan) Rencana Zonasi Wilayah Pesisir dan Pulau-pulau Kecil (Coastal and Small RZWP3K Islands Zoning Plan) SDGs Sustainable Development Goals SOE Badan Usaha Milik Negara (State-Owned Enterprise) Surat Pernyataan Pengelolaan Lingkungan (Statement letter to manage the SPPL environment) Upaya Pengelolaan Lingkungan Hidup dan Upaya Pemantauan Lingkungan Hidup UKL-UPL (Environmental Management Efforts and Environmental Monitoring Efforts) UU Undang Undang (Law)
viii
1． PREFACE This paper examines the establishment of a virtual pipeline by LNG marine transportation using a small LNG carrier and FSRU and floating type gas-fired power generation facilities installed on sea (LDPP: LNG Distribution & Power Plant) in order to avoid problems of land expropriation. The basic policy on the energy of the Republic of Indonesia is to expand the use of renewable energy and to convert thermal power to gas fueled as a coordinating power, according to a document announced by the government agency of Indonesia on January 31, 2019. The importance of LNG delivery is increasing. However, because the country has many islands and it is difficult to build pipelines, there is no gas distribution infrastructure, and construction of new power plants has been delayed due to problems such as land expropriation. As a result, the country continues to rely on old power plant fueled by oil and diesel.
[Basic Policy for the Development of Electricity] (Government agency of Indonesia, January 31, 2019) 1)Dissemination of gas-fired thermal power, especially gas turbine combined cycle 2)Expansion of LNG use in islands other than Java 3)Replacement of small-scale coal-fired thermal power stations outside Java with gas-fired thermal power stations
Gas conversion of fuel for power generation reduces CO2 emissions and ensures environmental friendliness, while reducing electricity costs increases demand and contributes to economic growth. Floating gas thermal power plant (MFPP: MHI Floating Power Plant) is the solution which can solve all of them.
1.1 Study content It is extremely important to secure stable energy demand in final demand areas when constructing floating gas-fired power plants and LNG distribution chains. In addition to supplying gas to conventional power generation facilities, the feasibility of; (1) developing cold chains through desalination and desalination plants, ice making, freezing and storage, etc., (2) industrial electric power such as refining and steelmaking, and (3) creating new energy demands such as air conditioning equipment, freezers, cogeneration, etc., for private use,
1-1
was evaluated and examined. Specific survey and implementation items are as follows.
［PROJECT FEASIBILITY STUDY］ ①-(1) CONFIRMATION OF CONSISTENCY WITH INDONESIAN SYSTEMS The following items were carried out in cooperation with organizations that were familiar with the Indonesian PPP scheme, etc. ・Study on the Indonesian System and Law and the Mid- and Long-term Energy Plan of the Indonesian Government ・Confirmation of the consistency of the Japanese FS plan ・Establishment of a business structure that is easy to understand and feasible for stakeholders on Indonesian side ・Formulation of various plans incorporating Japan's superiority
①-(2) HUB CONSTRUCTION PLANNING Based on the FS results last year, the HUB installation position was narrowed down by further drilling. ・Study of basic plan including specific location of HUB installation and equipment content ・Study of the optimal structure for implementing and operating the HUB ・Confirmation of the economic feasibility of the implementing body (SPV) ・Examination of the need for assistance from Indonesian government ・Study of financing scheme for Japan ・Environmental risk check for HUB installation
②-(1) STUDY ON CREATION OF NEW ENERGY DEMAND This paper proposes concrete measures by referring to the FS results carried out last year and further digging. ・Pick up several candidate sites to validate demand certainty (Upside and downside risk analysis is also conducted.) ・Consideration of the possibility of creating new demand for consumer and industrial use on the above site (Field surveys were conducted by experts with specialized knowledge as necessary.)
②-(2) STUDY OF SMALL-SCALE SITE IMPROVEMENT MEASURES This paper proposes concrete measures by referring to the FS results carried
1-2
out last year and further digging. ・Re-check of the economics of small-scale power plants ・Consideration of equipment installation and operation mode in accordance with the amount of possible investment based on the above ・Study on possibility of further advanced energy utilization from the viewpoint of actual examples in Japan
③ EVALUATION OF ENVIRONMENTAL AND SOCIAL IMPACTS In addition to the CO2 reduction effect, the contribution to the environmental policy of the country such as the air pollution reduction effect was examined.
④ STUDY OF SUPERIORITY OF JAPANESE COMPANIES AND BENEFITS TO JAPAN Japanese companies participated in the project review and working groups with the concerned parties of Indonesia. While securing superiority by providing one-stop service that differentiates itself from competitors in other countries, Japanese companies also examined benefits to Japan with a view to cross-border development in other countries.
1.2 Study Methodology and Study Team Formation The implementation for this project was conducted as a member of the Program Mission Team (PMT), Mitsubishi Heavy Industries, Ltd., Shizuoka Gas Co., Ltd. and Marubeni Corporation coordinated with Kawasaki Kisen Kaisha, Ltd., Koei Research & Consulting Inc. and Maxeed., Llc. subsidied by METI.
1-3
Relevant organizations of Indonesia： CMMA MEMR Marine Geological Institute, MGI METI BUMN KKP Marine Fisheries Engineering Assessment Center BPPT Ocean Research and Technology Center University of Indonesia KUD, etc.
Relevant companies of Indonesia： PT.PLN PT.Pertamina
MHI（Managing corporation） Shizuoka Gas Co., Ltd. Overall supervision ②-(1) STUDY ON CREATION OF NEW ENERGY DEMAND ①-(1) CONFIRMATION OF CONSISTENCY WITH ②-(2) STUDY OF SMALL-SCALE SITE IMPROVEMENT INDONESIAN SYSTEMS MEASURES ①-(2) HUB CONSTRUCTION PLANNING Subcontractor ②-(1) STUDY ON CREATION OF NEW ENERGY DEMAND Maxeed., Llc. ②-(2) STUDY OF SMALL-SCALE SITE IMPROVEMENT MEASURES
Subcontractor Kawasaki Kisen Kaisha, Ltd. Marubeni Corporation Koei Research & Consulting Inc. ① -(1) CONFIRMATION OF CONSISTENCY WITH INDONESIAN SYSTEMS ①-(2) HUB CONSTRUCTION PLANNING Subcontractor Koei Research & Consulting Inc.
1-4
2. PROJECT PROFILE AND WORK METHODOLOGY The objective of LDPP is to develop gas distribution infrastructure for power plants (“Midstream”) in Eastern Indonesia which aims to provide various economic benefits to remote area such as diesel to gas conversion, increase of electrification ratio, reduction Green House Gas (GHG) emission, and to support the regional economic developments (e.g. fishery, tourism, smelter, etc.) Hereafter, in December 2018, the Programme Mission Team (PMT) has completed the Preliminary Study for LDPP project which analyzing the COE (Cost of Electricity), distribution scheme, and potential sites of large demand in Eastern part of Indonesia.In November 2019, CMMA and METI agreed to conduct a “Further Study” under the structure of inter-governmental Joint Working Group, which was coordinated by CMMA and METI. As mentioned previously, the objective of LDPP is to develop gas distribution infrastructure for power plants in Eastern Indonesia. The target locations of LDPP Project are divided into 2 segments. In addition, several locations which have serious navigational difficulties, such as Langgur, Timika, and Merauke, are also noted down and will be taken into consideration in conducting the assessment. 【Segment A】Sites with firm and large anchor demand 【Segment B】Sites with remote and small demand
Figure 2.1 Candidate Locations of LDPP Project and Segmentation Source: Consultant Team has made above based on the information provided by PMT
2-1
3. NEEDS, REGULATORY AND DEMAND ANALYSIS The improvement of the electricity provision and Electrification Ratio in Eastern Indonesia is very much needed. The LDPP Project is also well positioned in RPJMN, RUKN, RUPTL and potentially in PSN, although, further clarification might be needed to confirm some required permits. Moreover, preliminary demand analysis concluded that most of the demand will come from conversion of existing diesel- based power plants to gas.
3.1 Needs Analysis 3.1.1 Assessment on East Indonesia’s Electrification Ratio In 2015, the United Nations (UN) set a collection of global goals called Sustainable Development Goals (SDGs). These SDGs serve as a blueprint for its member countries to achieve a better and more sustainable future for all. One of the SDGs is to have a universal access to electricity by 2030, which is stipulated under SDG #7, Affordable and Clean Energy. As a member of the UN, Indonesia is also aiming to have a 99.9% of Electrification Ratio (ER) by 2019. Based on the 2019 Electricity Statistics developed by the Ministry of Energy and Mineral Resources (MEMR), the 2018 ER in Indonesia is at the level of 98.3%. Although the average ER in Indonesia as a country is relatively high, there is still quite a gap among ER in each province/region. In general, the ER of Eastern Indonesia is lower than the western part (e.g. Sumatera, Java-Bali). As shown in the figure below, some regions in eastern part (e.g. South Kalimantan, South Sulawesi, Maluku and Papua) are still below the country’s average ER and the target set by SDG #7, Affordable and Clean Energy.
Figure 3.1 2018 Electrification Ratio in Eastern Indonesia Source: 2019 Electricity Statistics by MEMR
In addition, the calculation method of ER also needs to be clarified. The households might be considered as electrified or connected to the electricity, however, it is not clear whether the electricity is available for 24 hours/7days
3-1 or not. Having said that, the actual access to electricity in Eastern Indonesia might be even lower than the ER figures.
3.1.2 Confirmation of Consistency with National and Regional Development Plan (1) Project is well positioned in Central Government (RPJMN) Based on the draft (as per June 2019) of Central/National Government Medium Term Plan (RPJMN) 2020-2024, in terms of energy and electricity development, the central government aims to: Provide energy and electricity in a sustainable manner, including by increasing the share of renewable energy in the energy mix (23% by 2025). Provide energy and electricity which is accessible, affordable and equally distributed, especially in the Eastern Indonesia Strengthening national energy security
Several issues on energy management and utilization have been acknowledged by the central government which hinder the objective mentioned above to be achieved such as (a) Energy buffer stock and energy security. The issue of energy reserve and security remains as one of the big concerns in RPJMN 2020-2024, considering that Indonesia does not have sufficient energy buffer stock and still highly dependent on fuel imports. (Chapter 2 Strengthening Economic Resilience for Sustainable Growth: Environment and Strategic Issues, page 39) (b) Energy distribution infrastructure. The issue of utilization of energy is also being pointed out in RPJMN, emphasizing the needs of energy infrastructure due to production location and utilization location are far apart. For example, although Indonesia has high reserve of natural gas, the utilization of natural gas is still lacking and tends to be use in Java while in fact most of natural gas reserve is located in Eastern Indonesia. (Chapter 6 Strengthening Infrastructure to Support Economic Development and Basic Services/Needs: Objective, Targets and Indicators, page 153)
Several solution directions to tackle these issues have also been mentioned in RPJMN 2020-2024 such as: Reducing the utilization of fuel oil in power plant, which can potentially reduce the fuel import from other countries thus strengthening the national energy security. Furthermore, by reducing the utilization of fuel oil, the government is expecting to be able to reduce the electricity production cost (Cost of Electricity/COE) (Energy and Electricity Access, page 152) Developing energy distribution infrastructure, especially related to natural gas distribution by identifying projects which can be implemented by central government, regional government budget, state owned enterprises, private sector and community (if applicable) (Funding for Implementation, page 258) In conclusion, the LDPP project objective and potential scope, are aligned with the country's policy direction and if implemented can directly and indirectly solve some of the aforementioned issues.
3-2
(2) Project is well positioned in ESDM Plan RUKN or National Electricity Master Plan is developed by the Ministry of Energy and Mineral (MEMR) as the basis of Electricity Supply Business Plan (RUPTL) formulated by PT PLN. The RUKN 2019-2038 mentioned the aim of Indonesian Government to increase electrification ratio from 98.30% in 2018 to 100% in 2020 by overcoming the obstacle of electricity infrastructure development (Chapter 2, page. 67-68). The government has set out, amongst others, several policy guidelines to fulfil the above target which are as follow: (a) Electricity supply to focus more on fulfilling the demand in remote area and to be provided across region in reasonable price. In order to get a reasonable price, the government aims to suppress local BPP level through efficiency of primary energy cost as the largest component. This leads to government plan of diversifying oil-fuel-based power plant and optimize gas power plant. The primary energy mix from 2025 to 2038 has shown increased of renewable energy and gas whilst decreased of oil fuel and coal. In 2025, the projection for energy mix are renewable 23%, gas 22%, oil fuel 0.4%, and coal 55%. Later in 2038, the projection shifted to renewable 28%, gas 25%, oil fuel 0.1%, and coal 47%. This is to be realized whilst taking into consideration the balance between supply and demand of electricity (Chapter 1, page 10-15, page 34-35). (b) Investment for electricity to be supported by funding from SOE (State-Owned Enterprise) and Private Entity. Considering the limited capacity of government and PLN, private participation is widely available especially if the investment requires big funding and has high energy supply risk or does not have adequate gas supply capacity or infrastructure. The government has endorsed, as an example, the gas milk-run method to serve small power plant in remote are in order to reduce infrastructure cost (Chapter 1, page 26 and Chapter 2, page 74). (c) Electricity provision to be pursued in environmentally friendly. Align with Indonesia’s commitment to reduce greenhouse gas emission (GHG) of 29% by the year 2030, the government promotes, amongst others, fuel switching from oil to gas in PLTG, PLTGU, and PLTMG. This aims to reduce the utilization of oil fuel power plant which has higher emission compare to gas (Chapter 2, page 55-56). Based on the above explanation, the LDPP Project is aligned with MEMR’s policy direction, especially in relation to providing electricity supply to remote area and the utilization of gas in pursue of more reasonable price and environmentally friendly power plant compared to diesel-based power plant commonly used in Easter Indonesia.
(3) Project is well positioned in PT PLN plan (RUPTL) Based on PMT’s proposed location/power plant on December 2019, most of the targeted sites for LDPP Project are well positioned under RUPTL. From a total of 30 sites, around 28 were identified in RUPTL, whilst 2 other sites are not yet stipulated in the RUPTL. These 2 sites are Buli Bay and Weda Bay which are planned to be developed in North Maluku Province. Further detail can be seen in the table below:
3-3
Table 3.1 List of LDPP Project Targeted Sites and Status in RUPTL Proposed location/Power Capacit Status in No Province Grid Type Plant by PMT y (MW) RUPTL (Dec 2019) South PLTG/MG/ 1 Barito Kalsel 200 Kalimantan GU/MG South PLTG/MG/GU 2 Sulbagsel Makassar 200 Sulawesi /MG 3 Sulbagsel Sulbagsel PLTU 200 4 South East Sulbagsel Sulbagsel 2 PLTU 200 5 Sulawesi Sulbagsel MPP Sulselbar PLTG/MG 120 6 Kendari MPP Sultra PLTMG 50 7 Dobo Dobo PLTMG 10 8 Seram Seram PLTMG 20 9 Namea Namlea PLTMG 10 10 Saumlaki Saumlaki PLTMG 10 Maluku 11 Tual Langgur PLTMG 20 12 Bula Bula PLTMG 10 13 Ambon Ambon Peaker PLTMG 30 14 Ambon Ambon 2 PLTG/MG/GU 50 Ternate- 15 Ternate 2 PLTG/MG 10 Tidore Ternate- 16 MPP Ternate PLTMG 30 Tidore 17 Bacan Bacan PLTMG 10 North 18 Sanana Sanana PLTMG 10 Maluku 19 Morotai Morotai PLTMG 10 20 Halmahera Tobelo PLTG/MG 10 21 Halmahera Tobelo 2 PLTMG 20 22 Halmahera Buli Bay - - Not included 23 Halmahera MFPP Weda Bay - - Not included 24 Fak Fak MPP Fak Fak PLTMG 10 West Papua 25 Kaimana Kaimana PLTMG 10 26 Timika MPP Timika PLTG/MG 10 27 Timika Timika 2 PLTG/MG 30 28 Papua Serui Serui 1 PLTMG 10 29 Merauke Merauke PLTMG 20 30 Merauke Merauke 2 PLTG/MG 20 Note: The power plant name, type, and capacity has been adjusted to mirror provision under RUPTL. Source: RUPTL 2019-2028 and List of LDPP sites based on PMT (December 2019)
However, based on the meeting with MEMR (November 28th) and PLN (December 19th), PLN is currently developing a new RUPTL targeted to be issued on 2020. Therefore, further confirmation on sites suitability with the new RUPTL 2020 is recommended. Minutes of Meeting can be seen in the Appendix II- IV.
(4) Project is potentially to be positioned in National Strategic Projects and Priority Projects The Government of Indonesia strives to accelerate projects that are considered strategic and has high urgency with the aim of increasing the national economic growth through infrastructure development. The Government through the Coordinating Ministry for Economic Affairs (CMEA) has selected 245 National Strategic Projects (PSN) and 2 Programs that has strategic criteria and spread nationally. These PSN
3-4 and Programs are stipulated under the Presidential Regulation and revised yearly. The latest PSN list is stipulated under the Presidential Regulation No. 56/2018.
In addition to PSN, there are 37 out of 245 National Strategic Projects that have high economic impact, which have been selected as the Priority Projects by CMEA under the CMEA Ministry Regulation No. 5/2017. Both PSN and Priority Projects have been monitored and supported by the Committee for Acceleration of Priority Infrastructure Delivery (KPPIP).
Figure 3.1 Overview of PSN and Priority Projects
Source: KPPIP
According to Presidential Regulation No.56/2018 and CMEA Ministry Regulation No. 5/2017, the list of power plants included as target locations in LDPP Project (excluding Buli Bay and Weda Bay) is confirmed as National Strategic Projects and Priority Projects under the sector of electricity, which are described in the points below.
3-5
(a) Presidential Regulation No. 56/2018: Section X (Electricity Infrastructure Development Program) of Presidential Regulation No. 56/2018, mentioned “The Project Lists which are referring to Project Lists of Power Plants, Transmissions, Substations, and Distributions regulated in the Presidential Regulation on the Acceleration of Electricity Infrastructure Development” as one of the National Strategic Program. The Presidential Regulation on the Acceleration of Electricity Infrastructure Development mentioned above refers to Presidential Regulation No. 4/ 2016 as amended by Presidential Regulation No.14/2017 which also known as the 35 GW program. (b) CMEA Ministry Regulation No. 5/2017: In CMEA Ministry Regulation No.5/2017 on Acceleration of Priority Projects, it is stipulated on the Appendix section under Number 22, titled “Gas based Power Plants in 18 Provinces (i.e. Riau, Bangka Belitung Island, Banten, West Java, Central Java, East Java, Central Kalimantan, East Kalimantan, North Kalimantan, Central Sulawesi, South Sulawesi, Southeast Sulawesi, West Nusa Tenggara (NTB), East Nusa Tenggara (NTT), Maluku, North Maluku, Papua, and West Papua.” According to KPPIP, some of the power plants included as target locations in LDPP Project is positioned to be Priority Projects based on this CMEA Regulation. However, the regulation does not mention specific name of power plants in each of these provinces. Thus, further clarification is required.
In conclusion, even though from the perspective of power plants LDPP project is aligned with the PSN and Priority Projects, however, further clarification and confirmation are still necessary to understand the position of LNG Distribution (“Midstream”) infrastructure part in the context of PSN and Priority Projects.
3.2 Regulatory Analysis 3.2.1 Regulatory Analysis on Natural Gas Pricing Several regulations on natural gas pricing for power generation, such as MEMR Regulation No. 11/2017, MEMR Regulation No.45/2017 (as amended by MEMR Regulation No 58/2017 and No.14/2019), have been issued in the past few years by MEMR. The objective of the issuance of these regulations are: 1) to enhance the utilization of domestic natural gas, 2) to try to incentivize the development of wellhead power plants and 3) to reduce the overall cost of electricity. Under this regulatory framework, the government sets the maximum/ceiling price of natural gas at Freight on Board (FOB) to be at 11.5% of Indonesia Crude Price (ICP) and at power plant gate to be at 14.5% of ICP. As can be seen in the figure below, the price at FOB includes the production and transportation cost up to the LNG carrier/tanker whereas the cost at plant gate includes all cost related to the midstream infrastructure. In retrospect to the objective of the issuance of the regulations mentioned above, the current framework may hinder the country’s policy direction “To provide energy and electricity which is accessible, affordable and equally distributed, especially in the Eastern Indonesia.” As the figure below shows, the midstream infrastructure can be developed in various patterns depending on the site characteristic. Especially in Eastern
3-6
Indonesia, the sites condition can be challenging and have different difficulty level in comparison with Western Indonesia. The cost to develop the midstream infrastructure in Eastern Indonesia can potentially be higher than in Western Indonesia. Furthermore, location of the gas source and electricity demand condition will also dictate the cost to develop the midstream infrastructure. In conclusion, capping the price at 14.5% of ICP will hinder the implementation of natural gas fueled power plants in Eastern Indonesia. Based on the recent discussion with the relevant stakeholders, many views of these regulations might not be suitable for the Eastern Indonesia. Currently, MEMR is considering issuing a new regulation on gas pricing for Eastern Indonesia.
Figure 3.3 The Gas Price based on MEMR Regulation No.11/2017 and MEMR Regulation No.45/2017 amended by No.58/2017 and No.14/2019 Source: Consultant Team
3.2.2 Regulatory Analysis on Multiple Business Scheme The business scheme of a project can be selected by considering several aspects. The first aspect to be considered is the economic benefit (Economic IRR or EIRR). If the EIRR is low, the project should not be implemented since it has low or no benefits to the public and environmental/social acceptance. If the EIRR is high, then, the second aspect to be considered is the financial return (FIRR). If the project can expect high FIRR without any government fiscal contribution (e.g. VGF, PSO, subsidy, non-end user service fee/non-marketable service without transparent tariff framework, etc.) and/or government guarantee, the project can be implemented using B-to-B Scheme. If the project has high EIRR and medium to low FIRR, the project may be implemented using PPP scheme, as long as it has Value For Money (VFM) in comparison to the project being implemented under public finance scheme. Under the PPP scheme, the project can be implemented using User Pay or Availability Payment. For more detailed illustration on determining the Business Scheme, please see the figure below.
3-7
Figure 3.4 Business Scheme Determination Framework Source: Consultant Team
(1) Regulatory Analysis on B-to-B Business Scheme The related regulations for the investment with B-to-B business scheme, are as follows: (a) Distribution and Storage & Regasification MEMR Regulation No.4/2018 regarding Gas Business Activities stipulates that the implementation can be conducted by either Business Entity or State Own Enterprise (SOE). This regulation also includes the provision for gas business activity through pipelines, gas storage, or other means of distribution. (b) Energy Conversion MEMR Regulation No. 10/2017 stipulates that for provision of electricity purchase, PLN can cooperate with Business Entity in the form of Power Purchase Agreement. MEMR 38/2016 on Acceleration of electrification in rural undeveloped, remote, border, and small populated islands allows for private participation (investment and operation) from Power Generation to distribution.
As mentioned previously, once the project is determined to be implemented through B-to-B scheme then the project cannot receive any government support including government guarantee (MOF Regulation No.135/2019, stipulates the need for tender prior to guarantee application). However, certain government guarantee can be applied if the project is implemented through direct assignment and regulated by the government.
3-8
In conclusion, from the regulatory perspective, B-to-B business scheme can be applied for the implementation midstream infrastructure, as well as the energy conversion sector.
(2) Regulatory Analysis on PPP AP Business Scheme In regard to the related regulations for the investment with PPP AP business scheme, are explained in the following points: (a) Distribution and Storage & Regasification Presidential Regulation No. 38/2015 on PPP stipulates infrastructure on transportation, oil, natural gas and renewable energy can be implemented under PPP scheme. The Distribution and Storage & Regasification facilities can be considered as a combination of infrastructure on transportation and natural gas. (b) Energy Conversion President Regulation No.38/2015 stipulates electricity generation infrastructure as one of the infrastructures that can be implemented through PPP. Therefore, the investment and operation of power plant through Independent Power Producer (IPP) is possible under PPP scheme. One of the precedent cases of IPP under PPP scheme is Central Java Power Plant, an ultra- critical coal-red power plant with 2 x 1,000 MW capacity in Batang Regency, Central Java. It is currently under construction and targeted to start the operation in 2020.
Regarding the government guarantee, the energy conversion/Power Plant PPP Project can be obtained based on MOF Regulation No. 135/2019 and MOF Regulation No. 101/2018. In conclusion, PPP AP business scheme can be applied for the implementation of midstream infrastructure, as well as the energy conversion. However, until this report is completed, there is still no precedent case of PPP AP in distribution and storage & regasification investment on any LNG distribution projects. In addition, further clarification is required to understand who will be the Government Contracting Agency (GCA) for the midstream infrastructure, shall the project be implemented through PPP scheme. The detail on the PPP Regulation framework in Indonesia, can be seen in the Appendix.
3.2.3 Regulatory Analysis on the Required Permits for LDPP Project There are at least four permits required for the LDPP Project, which are as follow: 1) Location Permit, 2) Environmental Permit, 3) Construction Permit, and 4) Business/Operation Permit. These permits can only be processed and issued, when the project is listed in Rencana Tata Ruang Laut/RTRL (Marine Spatial Planning), for offshore infrastructure, and Rencana Tata Ruang Wilayah/RTRW (Land Spatial Planning), for onshore infrastructure. However, this list of required permits for LDPP Project is subject to Omnibus Law enactment by Indonesian Government. For the purpose of this report, more focus is given on spatial planning, location permit, and environmental permit as a result of preliminary interview with related stakeholder (i.e. Kementerian Kelautan dan Perikanan/KKP (Ministry of Marine Affairs and Fisheries)). Further breakdown and detail of required permits
3-9 will be subject to discussion with sectoral ministry such as MEMR, MOT (Ministry of Transportation), Kementerian Lingkungan Hidup dan Kehutanan/KLHK (Ministry of Environment and Forestry), and certain SOEs which have experience in similar project (i.e. Pertamina, Pertagas). Overview of the required permits and focus of the study for LDPP project can be seen in the Figure below.
Figure 3.5 Overview of Required Permits Source: Consultant Team
Considering various patterns and locations of midstream infrastructure that might be implemented for the LDPP Project (i.e. offshore and onshore), the regulatory analysis will be also divided for the Onshore and Offshore Infrastructures. Current hypothesis of the potential required permits for LDPP Project and the underlying regulatory framework can be seen in the Figure below.
Figure 3.6 Overview of Regulatory Framework of the LDPP Project’s Related Permits Source: Consultant Team
3-10
As provided on the above figure, as the first step, the project must first be listed in Marine and Land Spatial Planning or relevant Presidential Regulation (Perpres) prior to process the location permit, environmental permit, construction permit, and business/operation permit on oil and gas activity. The explanation on spatial planning, location permit, and environmental permit as well as brief discussion on construction and business/operation permit will be further described in section below.
(1) Spatial Planning (a) Rencana Tata Ruang Laut/RTRL (Marine Spatial Planning) In pursuance of PP 32/2009 on RTRL and Permen KP 23/2016 on Coastal and Small Islands Management Plan, in order for a project to obtain Izin Lokasi Perairan/Marine Location Permit, the project must be listed in either RTRL on national level or Rencana Zonasi Wilayah Pesisir dan Pulau-pulau Kecil/RZWP3K (Coastal and Small Islands Zoning Plan) in provincial level. However, this might apply differently shall the project is considered as PSN. Based on the current observation, shall the LDPP Project referred to midstream business (i.e. LNG distribution) then the project is not yet stipulated in existing RTRL under PP 32/2019 and Provincial RZWP3K which is issued in the form of Regional Government Regulation or Peraturan Daerah/Perda1. However, if the LDPP Project is defined as Power Plant development and the midstream business is treated as an integrated part of it, then the project is potentially considered as PSN under Perpres 56/2018 on Acceleration of PSN Implementation and thereby is listed under existing RTRL (appendix 9 of PP 32/2019)2 (see discussion on PSN in section 3.1.2.5). This section will further explain the hierarchy of Marine Spatial Planning in Indonesia, utilization of Marine Spatial Planning in relation to Marine Location Permit, and potential scenario for LDPP Project.
1 LDPP Project targeted sites is spread around 7 different provinces which are as follow: 1) South Kalimantan; 2) South Sulawesi; 3) Southeast Sulawesi; 4) North Maluku; 5) Maluku; 6) West Papua; and 7) Papua. Depending on the project location and status, LDPP Project might need to refer to all (7) Provincial RZWP3K to obtain Marine Location Permit from respected Governors. Based on Ministry of Marine Affairs and Fisheris (KKP), up to December 18th 2019, a total of 23 Provinces have issued their Perda RZWP3K. In relation to LDPP Project, only West Papua and Papua provinces have not issued their Perda. Source: http://bit.ly/PerdaRZWP3K accessed in December 23rd 2019 2LDPP targeted power plant sites is align with the PSN and Priority Projects. However, this is seen from the perspective of power plants development. Therefore, further clarification and confirmation are still necessary to understand the position of LNG Distribution (“Midstream”) infrastructure part in the context of PSN and Priority Projects.
3-11
Figure 3.7 Hierarchy of Marine Spatial Plan in Indonesia Source: Consultant Team through analysis on UU 27/2007 as amended by UU 1/2014 on Management of Coastal Zone and Small Islands; PP 32/2019 on Marine Spatial Plan; Permen KP 23/2016 on Coastal and Small Islands Zoning Plan
As provided on the above figure, RTRL is set as the guideline for the development of RZKL and RZWP3K. However, the applicable Marine Spatial Planning might differ on case-to-case basis depending on its location and status of the project. Certain project might only need to refer to RZWP3K to obtain Marine Location Permit or neither RTRL nor RZWP3K if the project is categorized as PSN. Further explanation on the utilization of Marine Spatial Planning can be seen in the figure below.
3-12
Figure 3.8 Utilization of Marine Spatial Planning and its Relation to Marine Location Permit Source: Consultant Team through analysis on UU 23/2015 on Regional Government; PP 32/2019 on Marine Spatial Plan; Permen KP 23/2016 on Coastal and Small Islands Zoning Plan
Based on UU 23/2015 article 27, area of 0-12 nautical miles from onshore is under the authority and responsibility of Regional Government, and thereby translate to area beyond 12 miles from onshore being the responsibility of the Minister. As seen on the above figure, there are two (2) possible scenarios for LDPP Project depending on its location. As a baseline scenario, this report will assume that LDPP Project is categorized as PSN based on Perpres 56/2018. First scenario shall the LDPP Project is located within 0-12 mil from onshore, the project must obtain seven (7) separate Marine Location Permit from respected Governors based on the recommendation of Minister of KKP. Second scenario shall the project is treated as one integrated project accumulating to more than 12 mil, the Marine Location Permit will be issued by Minister of KKP. In both scenario, Marine Location Permit issuance only referred to project positioned as PSN under Perpres 56/2018 without referring to RTRL. Ideally, the project should also be listed in RTRL based on PP 32/2019 article 122. However, under the current assumption, that the project is considered as PSN under Perpres, the government is allowed to exercise its discretion power and request for permit issuance in absence of law.3 The project then should be listed in the next RTRL revision which will be done once every five (5) years.
To conclude, LDPP Project of LNG distribution is not yet listed in existing RTRL and Provincial RZWP3K. However, if the project is defined as Power Plant
3 According to Article 22 of UU 30/2014 on Government Administration, the government has discretion power in which on the absence of law or regulation, the government is allowed to take action to reinforce good government administration.
3-13 development with LNG distribution considered as inseparable part, the project might potentially refer to Perpres 56/2018 as PSN or RTRL under PP 32/2009 appendix 9 to obtain Marine Location Permit. This require further confirmation with Coordinating Ministry of Economic Affairs (CMEA) or Coordinating Ministry of Maritime Affairs (CMMA). In addition, project location must also be determined as this will affect the permit issuer.
(b) Rencana Tata Ruang Wilayah/RTRW (Land Spatial Planning) In pursuance of Law 26/2007 and PP 15/2010 on Spatial Planning, the project must be listed in the National Spatial Plan (National RTRW), Provincial RTRW, Regency RTRW/City RTRW. As the first step, if it is on shore, the project should be listed in the National RTRW which has macro characteristics. The National RTRW is stipulated in more detail manner inside the Islands Spatial Plan (Island RTR) and the National Strategic Area4 RTR. Further details of the spatial plan is then stipulated under the Provincial RTRW. Lastly, Regency/City Government stipulate micro level of spatial plan under their RTRW. This Regency/City RTRW consists of Detail Spatial Plan (RDTR), Regency/City Strategic Area RTR, Agriculture Area RTR (for Regency), and City Area RTR. Please see Figure below for more detail on the Spatial Planning Hierarchy.
Figure 3.9 Hierarchy of Spatial Planning in Indonesia Source: Law 26/2017
4 National Strategic Area is an area where its space management is prioritized because it has strong influence in terms of state sovereignty, national defense and security, economic, social, cultural, and / or the environment, including areas designated as world heritage. (Government Regulation No. 15/2010)
3-14
Considering the needs of lands of a project to be listed in the relevant RTRWs in order to obtain land land Determination (Penetapan Lokasi) and location permit (izin lokasi), therefore LDPP Project should also be acknowledged in the National RTRW, Province RTRW, Regency RTRW, and/or City RTRW. However, since LDPP’s targeted sites scattered in seven provinces, thus the process of registering in each spatial plans will be challenging, unless there is a regulation that can facilitate to accelerate the process.
(2) Location Permit (a) Location Permit for Offshore Facilities (Marine Location Permit) Based on PMKP 24/2019 on Marine Location Permit in Coastal and Small Islands, project which utilizes part of the marine area for more than 30 days, must be equipped with Izin Lokasi Perairan/Marine Location Permit. The Marine Location Permit will be given based on the Zoning Plan. This provides the need for the project to be listed in the Marine Spatial. Apart from alignment with Marine Spatial Planning, to obtain location permit, the project must not cross with Core Zone located within the Conservative Zone. This Core Zone is typically: a) home to endangered species, b) area required to maintain ecosystem, c) served for research and educational area, etc. The Marine Location Permit could take approximately 20 working days.. Thereafter, the Marine Location Permit will become the basis to obtain Marine Management Permit. The management permit will depend on the activity involved and thereby will be under the authority of sectoral ministry (i.e. MEMR, MOT). This will also apply to vessel channel coordination which falls under the authority of MOT. Additional permit might be required aside from Marine Location Permit and Marine Management Permit, shall the project require reclamation or cut across the military territory and training area. In regard to this, KKP suggested to check with Ministry of Defense Indonesia on the location suitability. In conclusion, for LDPP Project, floating infrastructure like Hub, FPP, and FSRU as well as fixed structure like jetty which presumably settle for more than 30 days will require Marine Location Permit. In regard to Marine Management Permit, further discussion will need to be made with MEMR considering LDPP Project activity revolve mainly around the transportation of gas energy. Additional permit might also be required under certain circumstances (e.g. reclamation, crossing military zone) subject to further development of the study.
(b) Location Permit for Onshore Facilities (Land Location Permit) Considering that this project is public infrastructure, hence the land acquisition for the Public Infrastructure Project can be conducted by the government institution (which refers Law No.2/2012 on Land Procurement for Public Infrastructure) and by the Business Entity (which refer to ATR-BPN Regulation 17/2019 on Location Permit) The basis for government institution5 in implementing the Land Acquisition is the Penetapan Lokasi (Location Determination), which can be referred to Law
5 The government institution based on Law 2/2012 refers to state institutions, ministries and non-ministerial government agencies, provincial governments, municipal governments, and State-Owned Legal Entities that have State-specific assignments.
3-15
No.2/2012. In the issuance of Location Determination, there are several aspects considered, i.e. Spatial Planning (RTRW), social-economy, environment, acquisition, ownership, and land utilization. This Location Determination letter will be issued by the Head of Regional Government (i.e. Regent, mayor, or Governor). In terms of funding, the Land Acquisition for the Public Infrastructure can be sourced from the State Budget (APBN) and/or Regional Budget (APBD). The procedure of Izin Lokasi (Land Location Permits) as explained in this report is according to the recent ATR-BPN (Ministry of Agrarian Affairs and Spatial Planning/National Land) Regulation No.17/2019 on Location Permit. This regulation is intended as a guideline for granting Location Permits for the Business Entity6 who will carry out land acquisition activities for the purpose of investment and business activities (not necessarily for public infrastructure investment purpose). The Location Permit is valid up to 3 years after being declared effective and can be extended according to the applicable requirements. In order to obtain the Location Permits, Business Entity should apply through the OSS Website. The Location Permits issued by OSS, are divided into two types, i.e. “Location Permits without Commitment” and “Location Permits with Commitment”. However, the OSS system is newly be implemented for the Location Permit issuance, thus this system still required to be clarified with relevant institution (i.e. ATR-BPN). In the case of the land has been acquired by the Business Entity and fulfilled the criteria7 as stipulated in ATR-BPN Regulation No.17/2019, then the OSS will issue the “Location Permit without Commitment”. On the other hand, the OSS will use the “Location Permit with Commitment” if the land has not been acquired by the Business Entity. Each type has slightly different process in obtaining the Location Permit, which are described in the points below and shown in the Figure below.
【Location Permit without Commitment】 Following to the issuance of “Location Permit without Commitment” by OSS, the land office will evaluate the Land Technical Consideration within 10 days. After the evaluation, the Location Permit will be applied effectively, and the Business Entity has right to use the land.
【Location Permit with Commitment】 Following to the issuance of “Location Permit with Commitment” by OSS, the Business Entity shall submit the statement of fulfillment for Location Permit’s Commitment. Afterwards, the OSS will issue the “Location Permit with Commitment”. Next, the Business Entity shall submit the Land Technical Consideration Requirements8 within 10 days as stipulated in the ATR-BPN Regulation No. 17/2019, otherwise the location permit will be rejected. After submitting the Land
6 Business Entity as stipulated in ATR-BPN Regulation No.17/2019, refers to Perseroan Terbatas (PT), Perusahaan umum (General Company), Perusahaan Umum Daerah (Regional General Company), Badan hukum lainnya yang dimiliki oleh negara (State-owned Legal Entity), Badan Layanan Umum (Public Service Agency), etc. 7 The land should fulfil 7 criteria, i.e. should align with 1) Detail Spatial Plan (RDRT); 2) Special Economic Zone; 3) existing Location Permit; 4) Certain Development Area; 5) Business Expansion; 6) business area limits; 7) National Strategic Project. 8 1) Map covers the location’s coordinates; 2) Business Activity Plan; 3) Statement letter on the land’s location and area; 4) Business Master Number/ Nomor Induk Berusaha (NIB). 3-16
Technical Consideration Requirements, Land Office will evaluate the Technical Consideration in 10 days. This evaluation result will be the basis for the Local Government to approve the Location Permit’s Commitment. If the Land Office and/or the Local Government have not issued the Land Technical Consideration and/or the Approval within the intended days, the Location Permit is deemed to be effectively applied, and the Business Entities has right to use the land. However, if the Land Office and/or the Local Government state rejection to the Technical Consideration and Commitment Approval, then the Location Permit will be rejected.
Figure 3.10 Procedure of obtaining Location Permits by Business Entity for the Purpose Investment and Business Activities Source: ATR-BPN Regulation No. 17/2019
In conclusion, LDPP Project will most likely require Location Determination/Land Location Permits for the General Terminal, Special Terminal, and the onshore Power Plants. The process obtaining these permits can be challenging and requires lengthy process since LDPP targeted sites scattered in the seven Provinces. However, it might require less time if LDPP Project is confirmed to be National Strategic Project. Thus, further clarification with MEMR and/or CMEA is required.
(3) Environmental Permit In order to obtain Environmental Permit, a project must be equipped with either Analisa Mengenai Dampak Lingkungan/AMDAL (Environmental Impact Assessment),
3-17
Upaya Pengelolaan Lingkungan Hidup dan Upaya Pemantauan Lingkungan Hidup/UKL-UPL (Environmental Management Efforts and Environmental Monitoring Efforts), or Surat Pernyataan Pengelolaan Lingkungan/SPPL (Statement letter to manage the environment) depending on the degree of impact to the environment. Explanation on the application of AMDAL, UKL/UPL, and SPPL is described in the figure below.
Figure 3.11 Types of Required Document Application to Obtain Environmental Permit Source: Consultant Team through analysis of UU 32/2009 on Environmental Protection and Management and PP 27/2012 on Environmental Permit
Based on Permen LHK 5/2012 on the Type of Business Activities that require AMDAL, development of LDPP Project will most likely need to be equipped with AMDAL based on its nature and/or the capacity of the infrastructure. Considering its nature, LDPP Project can be identified as a complex project which has wide coverage area (i.e. involved seven different provinces) with several main and supporting activities. Meanwhile, depending on the capacity of infrastructure involved in LDPP Project, the regulation provided that the construction of jetty (≥ 6,000 m2), floating facility (≥ 50,000 DWT), construction of gas pipeline (≥ 100 km), and LNG regasification terminal (LNG ≥ 550 MMSCFD) are required to have AMDAL. In order to obtain AMDAL, the project must first be listed in the Marine Spatial Planning (i.e. RTRL or RZWP3K) for offshore infrastructure and Land Spatial Planning (i.e. RTRW) for onshore infrastructure. However, shall the project is included as part of PSN, the relevant minister (i.e. for offshore: Minister of KKP; for onshore: Minister of MEMR or MOT (Ministry of Transportation) or ATR-BPN can give recommendation to the Minister of KLHK or respected governors to process the AMDAL and issue the environmental permit. Decision on what institution (e.g. KLHK, Provincial Environmental Agency) is best responsible for the AMDAL and Environmental Permit of LDPP Project should be further discussed
3-18 with KLHK. (see also discussion on Marine and Land Spatial Planning in section 3.2.3.1, and potential inclusion of LDPP Project as PSN in section 3.1.2.5.). The process and period to obtain AMDAL is explained in the figure below. In brief, the time required for AMDAL process could take a minimum of 155 working days or equal to 7.6 months. Since the regulation does not stipulate the required time for each step, the timeline length will most likely depend on the project document preparation and degree of complexity.
Figure 3.12 Process and Period of AMDAL and Environmental Permit Issuance Note: SAEC: Secretariat of AMDAL Evaluation Committee (environmental agency, etc.) AEC: AMDAL Evaluation Committee (environmental agency, technical institution, public representative, relevant expert, etc.) TT: Technical Team (independent expert) *) might involve discussion/consultation with KLHK **) the initiator can re-submit the revised TOR to SAEC within 3 years Source: Consultant Team through analysis of UU 32/2009 on Environmental Protection and Management; PP 27/2012 on Environmental Permit
In preparing for AMDAL, it is important to take into consideration key environmental impact that can be affected by the project. Several potential impact that might need to be assessed include, amongst others, whether a) LDPP Project coverage area will cross any Conservative Zone, b) LDPP Project activities will consist of hazardous waste/hazardous material handling (if any), c) the impact of floating or fixed infrastructure (i.e. FPP, FSRU, jetty) to local fishing area, and d) possible emission from gas milk-run transportation. In regard to hazardous material handling, shall the project involve disposal of wastewater to the ocean or storage of hazardous waste/material, additional permit might be required. The projected impact and offered solution will determine the approval of AMDAL from the public as well as the AMDAL Committee. Based on the above explanation, LDPP Project will most likely require AMDAL to obtain Environmental Permit. The amount of AMDAL required might varied considering LDPP wide coverage area (e.g. seven (7) AMDAL for each province). However, there
3-19 might be a possibility that LDPP Project will only need to apply for one integrated AMDAL similar like PLTGU Java-1 (one AMDAL for development of PLTGU, transmission line, FSRU, jetty, and pipeline). Further discussion with KLHK is required to confirm this possibility along with information on key environmental criteria that needs to be considered and the responsible authority to process and issue the permit.
(4) Construction Permit and Business/Operation Permit (a) Construction related Permit The construction and business/operation permit are different between offshore and onshore based on the activity and infrastructure involved. For offshore, this report assumed infrastructure such as Hub, FSRU, FPP, and gas pipeline. Meanwhile, for onshore, the infrastructure assumed includes jetty and power plant. For offshore, based on PMP 129/2016 on Marine Vessel-Channel and Marine Buildings and/or Installation, the required construction permit could refer to Build or Move Installation Permit for marine installation and/or Underwater Work Permit for pipeline. However, this regulation has not provide explicit provision for floating installation such as floating power plant or FSRU. Since 2016, the government has been discussing to issue new Government Regulation (Peraturan Pemerintah/PP) on Marine Building and Installation. This regulation provides construction, placement, dismantling, and functional shift of marine building and installation. Different from PMP 129/2016, the draft regulation, which can be accessed through KKP website, identify mobile power plant, pipeline, and other offshore infrastructure as marine installations under oil and gas as well as electricity activity. In order to develop these facilities, the regulation obliges the need to consider alignment with spatial planning, conservation zone, history of natural disasters (e.g.an earthquake had happened in the location), existence of indigenous people, military zone, etc. In regard to permit required, the draft regulation mentioned the need to obtain environmental permit and business permit from relevant sectoral ministry. However, this Government Regulation is not yet issued and thereby should be positioned as mere preliminary information with further clarification needed. In addition, requirement for onshore power plant construction include Location Permit, Environmental Permit, and Izin Mendirikan Bangunan/IMB or Building Permit based on Perpres 4/2016 and MEMR 35/2014.
(b) Business/Operation Permit For the operation of midstream business involving Hub, FSRU, FPP, and gas pipeline, there are several potential permits that can be considered. First, under MEMR regime, there are four (4) business license for downstream oil and gas activity. Based on UU 22/2001 and MEMR 29/2017 as amended by MEMR 52/2018, these permits are as follow: 1) Izin Pengolahan or Processing License; 2) Izin Penyimpanan or Storage License; 3) Izin Pengangkutan or Transporting License; and 4) Izin Niaga or Trade License. Permits related to storage and transporting could be required for LDPP Project. Other applicable MEMR regime is related to the operation of
3-20
floating power plant. Since the nature of activity between onshore and offshore power plant is presumably the same, this report assumes that Izin Usaha Penyediaan Listrik/IUPTL (Electric Power Supply Business) would be required. Second, under MOT regime, ships that serve and operate for domestic purpose will most likely be required to register an Indonesian flag. Foreign ship might be utilized under certain circumstances as stipulated under PMP 92/2018 as amended by PMP 46/2019. Based on this regulation, foreign ship can be utilized for floating power plant, salvage and underwater work, construction ship for jetty, etc. The approval or permit is given based on the request from National Transportation Company and only after procurement prioritizing Indonesian vessel has been conducted once.
For onshore infrastructure, such as jetty, permit for Special Terminal under PMP 20/2017 could be required. The Special Terminal is built for the purpose of docking and supporting the mobilization of equipment and material around the project. The Special Terminal is located outside existing port and has its own interest to be served. The interest includes, amongst others, mining and energy business activity. The Special Terminal is submitted to the Minister of MOT through Director General of Sea Transportation with minimum 19 working days. The overall assumptions on construction and business/operation permit described above will need to be further discussed with sectoral ministry (e.g. MEMR, MOT) and experienced SOE (e.g. Pertamina, Pertagas).
3-21
3.3 Demand Analysis Initial hypothesis of demand category was developed to better understand the demand in the Eastern Indonesia. For each target site/power plant, the demand is divided into 5 categories, a, b, c, d, and e, with detail definition of each category as shown in the figure below.
Figure 3.13 Initial Hypothesis of Demand Category Source: Consultant Team
(1) Demand Calculation: In calculating the demand, PLN will look into their electricity sale record in every regional unit (equivalent to demand category a). They will also forecast their demand using various variables including population and economy growth (equivalent to demand category b+c+d) and Government’s programs as well as business industry development (equivalent to demand category e). The national demand forecast in the RUPTL 2020 will be lower than the one stipulated in 2019. It will affect the number of planned installed capacities and capacity factors as well. For the purpose of this study, PLN suggested to use RUPTL 2020 than RUPTL 2019. RUPTL 2020 will most likely be issued in March 2020.
(2) Gas demand projection: The gas demand projection data is available in the RUPTL 2019 for each planned gas power plant. This gas demand projection data is shown in the table below. It can be seen that the gas demand projection in the RUPTL is different from PMT’s projection as shown in the previous table. Further investigation is required. Detail interview results are provided in the Appendix.
3-22
Table 3.2 Gas Demand Projection for Each Gas-Sourced Power Plant based on RUPTL 2019 RUPTL PMT No Power Plant 2019 - 2023 2023 - 2028 BBTUD 1 PLTMG Ambon Peaker 1.71 - 2.28 1.71 4.2 2 PLTMG Langgur 1.08 - 1.89 1.27 - 1.44 0.33 3 PLTMG Bula 0 - 0.45 0.48 - 0.64 0.5 4 PLTMG Namlea 0.47 - 1.01 0.46 - 1 0.9 5 PLTMG Saumlaki 0.4 - 0.69 0.49 - 0.9 0.8 6 PLTMG Dobo 0.46 - 0.84 0.52 - 0.89 0.9 7 PLTMG Seram 0.82 - 1.2 0.6 - 0.83 1.2 8 PLTMG Seram 2 0 - 0.95 0.38 - 0.57 N/A 9 PLTG/MG Ambon 2 0 - 3.66 2.37 6.6 10 MPP Ternate 2.75 - 3.68 2.24 - 3.55 3.3 11 PLTG/MG Ternate 2 0.47 - 1.71 1.71 2.2 12 PLTG/MG Tobelo 0.38 - 0.47 0.38 - 0.47 0.38 13 PLTMG Bacan 0.27 - 0.96 0.35 - 0.71 0.4 14 PLTMG Sanana 0.47 - 0.62 0.65 - 0.83 0.7 15 PLTMG Morotai 0.43 - 0.73 0.83 - 1.31 0.9 16 PLTMG Tobelo 2 0.1 - 1.63 0.23 - 2.91 0.2 17 MPP Timika 0.95 0.95 0.9 18 PLTMG Merauke 1.39 - 1.88 1.25 - 1.96 1.5 19 PLTMG Serui 1 0.78 - 1.01 0.77 - 0.94 0.8 20 PLTG/MG Timika 2 2.87 - 4.09 3.32 - 4.35 3.3 21 PLTMG Serui 2 0 0.28 - 0.47 N/A 22 PLTMG Timika 3 0 0.95 - 1.9 N/A 23 PLTMG Merauke 3 0 0.76 - 1.52 N/A 24 PLTG/MG Merauke 2 0.76 - 1.52 1.52 1.5 25 MPP Fak-fak 0 - 0.74 0.55 - 0.73 0.7 26 PLTMG Fak-fak 0 - 0.38 0.38 - 0.57 N/A 27 PLTMG Kaimana 0 - 0.67 0.73 - 1 0.8 MPP Sultra 3.28 1.64 - 3.28 1.7 28 (Kendari) 29 MPP Sulselbar 0 - 5.9 3.93 - 5.9 3.7 30 PLTG/MG/GU Makassar 0 - 7.42 7.13 - 7.29 7.8 31 PLTGU Kalsel 1 0 0 - 4.92 7.8 Not included in PMT list
3-23
4. SOCIAL/ECONOMIC ANALYSIS The study conducted social/economic analysis. The project is expected to save electricity generation costs (including improved oil trade deficit), reduce greenhouse gas emission. Social cost benefit analysis model shows positive economic NPV and economic IRR of 16.8%, indicating the project is socially viable and bring net benefits to the economy.
4.1 Outline of Social/Economic Analysis Economic analysis considers the costs and benefits of the project for the society as a whole and evaluates whether the society at large gains from this investment. Based on standard social cost and benefit analysis (SCBA) methodology, this study measures the difference between the flow of costs and benefits “with the project” and “without the project”, and calculates the economic internal rate of return (EIRR)and Economic NPV as an indicator to judge social/economic viability. When EIRR is greater than the social discount rate of 10% and Economic NPV is positive, investment is considered justifiable
4.2 Assumptions of Social/Economic Analysis (1) Economic Costs The study analyzes 23 years (construction 3 years, operation 20 years), based on the costs and target sites proposed by PMT9. Financial costs are converted to economic costs. Economic costs are composed of tangible costs (accountable goods such as Hub, Carrier) and non-tangible costs (externalities such as social cost of carbon). Transfer payment (e.g. tax, subsidies) are excluded from economic price, as they transfer resources from one party to another without reducing or increasing the amount of resources available for the economy as a whole. Cost of capital (time value of money) is also excluded, as is represented by discount rate. In economic analysis, costs (and benefits) are measured in constant prices of a base year and, therefore, the effect of inflation is eliminated. Standard Conversion Factor is applied to non-traded goods. At this stage of study, consulting team applies SCF 0.910 to O&M costs, since local portion and foreign portion of CAPEX are unclear at this stage. (2) Economic Benefits Quantified economic benefits for this project are classified into 1) Avoided costs of electricity generation and 2) Reduction of Greenhouse gas emission. 1) Avoided costs of electricity generation The project, when implemented, is expected to bring down the cost of electricity by switching source of energy from diesel to LNG. Cost saving can be counted as economic benefit. Based on ADB report11, the study assumed that avoided costs for diesel as alternative is 22.73 cents/kwh.
9 Provided on December 27th (Original Site) 20 Sites, 476 MW, 22,063 BBTU/y 10 https://www.oecd.org/derec/adb/47145358.pdf pp50 11 ADB 2015 “Unlocking Indonesia’s Geothermal Potential” PP26-27
4-1
Table 4.1 Avoided Costs of Electricity Generation Fuel type Avoided cost Yearly avoided costs without LDPP MWh/year (cents/kwh) (USD mil.) project Diesel-fired 2,515,342 22.73 572 Source: Consultant Team
2) Reduction of Greenhouse gas emission The project will have positive environmental impact by reducing greenhouse gas emission. Compared to coal and diesel fuel, LNG will emit lower carbon, therefore the avoided emission should be accounted as social/economic benefits. ICPP (2018)12 estimates the emission of gas (combined cycle) is 490 gCO2eq/kwh (median), which is 110 gCO2eq/kWh lower than Diesel fired electricity generation. Applying generally accepted social cost of carbon 30 USD/tCO213, annually 8.3 million USD worth of CO2 will be reduced. Table 4.2 Avoided Social Cost of Carbon Yearly avoided Fuel type Emission Avoided Avoided social cost of without LDPP (gCO2eq/kWh emission emission carbon (USD project ) (gCO2eq/kWh) (tCO2) mil.) Diesel-fired14 600 110 276,688 8.3 Source: Consultant Team
4.3 Result of Social/Economic Analysis 4.3.1 Result of Social Cost Benefit Analysis Table below shows the result of SCBA. With social discount rate 10%, net present value of benefit is USD 3,710 million, while net present value of cost is USD 2,979 million. This will make NPV of the project to be positive 731 million USD. Economic IRR is 16.8%, which is greater than socially required rate of return (i.e. social discount rate 10%). The result indicates the project is socially viable and will bring positive net benefit to the economy.
Table 4.3 Result of Social Cost Benefit Analysis (Base Case) Economic NPV Economic IRR USD 731 million 16.8% Source: Consultant Team
4.3.2 Sensitivity Analysis Tables below show the impact of costs and benefits fluctuation upon Economic NPV and Economic IRR. Costs could increase due to prolonged construction or cost overrun, and benefits could decrease due to lower electricity demand hence generated electricity volume. The result indicates 20% of fluctuation in either costs or benefits would still make the project socially viable. It needs to be
12 https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_annex-iii.pdf 13 World Bank (2015) “Guidelines for Economic Analysis of Power Sector Projects” P40 14 Referred to latest data available: Intergovernmental Panel ICPP 2012
4-2 noted that the project scope (target sites) is not final. Cost structure and result of calculation would be different once the scope is determined.
Table 4.4 Sensitivity Analysis (Economic NPV)
Source: Consultant Team Table 4.5 Sensitivity Analysis (Economic IRR) Economic IRR Benefit Increase /Decrease 17% 20% 10% 0% -10% -20% -20% 31.5% 28.0% 24.5% 20.8% 16.8% -10% 26.9% 23.7% 20.3% 16.8% 13.1% 0% 23.0% 20.0% 16.8% 13.5% 9.9% 10% 19.7% 16.8% 13.8% 10.6% 7.0%
Cost Cost Increase/Dec rease 20% 16.8% 14.1% 11.1% 7.9% 4.3% Source: Consultant Team
4.4 Qualitative Social /Economic Benefits 4.4.1 Improved Trade Deficit Part of the economic benefits (within avoided electricity generation cost) includes the improved trade balance derived from reduction of oil import. Indonesia had become oil net importer since 2004 due to oil refinery capacity shortage. The oil net import has been a growing drain on the country's US Dollar reserves, which has devaluating effect on Indonesian rupiah. Assuming that unit price of fuel is 20.4 USD/MMBTU15, approximately USD 450 million/year16 worth of diesel import reduction can be expected.
4.4.2 Cold Heat Utilization Replacing diesel with LNG brings potential opportunity to contribute fishery development. Cold heat which is generated through regasification can be used for ice making and cold storage for fishery (image below).
15 2018 LDPP METI FS Report 16 20.4 USD * 22,063 BBTU/y
4-3
Figure 4.1 Cold Heat Utilization Source: Consultant Team
Cold heat utilization has potential benefit of not only the direct revenue but ripple effect of maintaining the fishery production fresh and better quality, which would contribute to higher sales price. Also, fishers could avoid revenue loss from their catch going bad due to insufficient cold storage.
4.4.3 Potential Contribution to Nearby Tourism Industry Utilization of LNG could help reducing the cost of electricity and cooking gas in Segment B site area. As to cooking gas, LP Gas has been widely used in the country, however the cost is relatively high (23 USD/MMBTU) 17. If LNG VGL(19 - 20USD/MMBTU)18 could replace, estimated 5-6USD/MMBTU would be saved. LNG VGL has already been used in hotel kitchen in Bali and Bandung, and has potential to expand to remote tourism industry.
17 Based on meeting with MHI 18 ditto
4-4
Figure 4.2 VGL Utilization Source: Consultant Team
This study, when further cost and demand data are available, will estimate the potential benefit to tourism in case study basis.
4.4.4. Increased Energy Independence (National/Energy Security) Using domestic gas will decrease the country’s reliance on imported oil and gas hence increase national energy security. In 2017, USD 2.71 billion worth of Petroleum Gas (used for LPG) was imported, 75% of which comes from Middle Eastern Counties.19 For this the country is exposed to geopolitical shock accompanied by price fluctuation and market volatility. Table 4.6 Supplier Country, Petroleum Gas (2017) Petroleum Gas Ratio UAE 32% Saudi Arabia 18% United States 13% Qatar 12% Iran 8.2% Kuwait 4.7% Others 12.1% Source: OEC
Likewise, Indonesia has imported USD 14.2 billion20 worth of refined petroleum and USD 7.44 billion of crude petroleum.21
19 https://oec.world/en/visualize/tree_map/hs92/import/idn/show/2711/2017/ 20 https://oec.world/en/visualize/tree_map/hs92/import/idn/show/2710/2017/ 21 https://oec.world/en/visualize/tree_map/hs92/import/idn/show/2709/2017/
4-5
Table 4.7 Supplier Country, Oil Import (2017) Refined Petroleum Ratio Crude Petroleum Ratio Singapore 59% Saudi Arabia 23% Malaysia 18% Nigeria 18% South Korea 6.6% Australia 14% UAE 3.9% Malaysia 10% Qatar 2.7% Azerbaijan 6.2% Others 9.8% Others 28.8% Source: OEC
Though the origin seems geopolitically scattered, the same insecurity (political instability and natural disaster) applies, putting the economic activity in Indonesia at risk. A Japanese study has estimated the cost of energy security by regarding oil storage base construction and operation costs as alternative, which made JPY 0.29/kWh22, however this quantification method of energy security risk has not been universally accepted.
Based on the quantitative and qualitative social analysis, the project is considered to be socially viable and will bring various benefits to the economy.
22 https://www.rite.or.jp/system/global-warming-ouyou/nipponbunseki/latestanalysiselectriccost/
4-6
5. FINANCIAL FEASIBILITY ANALYSIS Cashflow analysis was conducted based on the demand forecast according to RUPTL. Delivery to Segment B is planned using ISO tank delivery system. Further sensitivity analysis revealed the importance of demand risk management to retain the financial viability as well as reducing COE. Furthermore, government support would be expected in case the PLN does not agree on the price of delivered LNG. The power plants where LNG will be delivered by LDPP are assumed based on the information provided by ESDM. Outline of the facility types, generation capacity and capacity factor of whole proposed sites are summarized in the table below. Proposed power plants are categorized into Segment-A (10 power plants) and Segment-B (16 power plants) considering its scale and geological condition. For the cash flow analysis, the LNG is delivered to the HUB of the project, and delivered to Segment A by Milk-run system. Then, ISO tank is filled at several storage facilities at Segment A area to be sent to power plants in Segment B.
Table 5.1 Conditions of each Power Plant B. C. D. E. F. Rated Capacity Loca Seg A. Sto Site Regas. Connect. Connect. PP Power COD Factor tion ment Jetty Rage unit to Land To PP Type (MW) (%) type Distribution Gas 1 Ambon Ambon Peaker A 30 2019 68 Jetty Distribution line Engine MFPP MFPP(as PLTG/ Ambon line Distribution 2 Ambon A MFPP 50 2022 68 GU/MG ambon2) line Gas 3 Temate MPP Temate A Gas Pipeline 30 - 53 Jetty 6K sRU Engine Gas Pipeline Temate on Jetty Gas 4 Temate PLTMG Temate2 A Gas Pipeline 20 2022 53 Engine Jetty Distribution 5 Makassar Makkasar MFPP A MFPP Gas Pipeline MFPP 50 80 Makassar line MFPP Jetty Distribution Distribution 6 Kalsel A MFPP MFPP 50 80 (50MW,CF=80%) Kalsel line line Buli bay Jetty 6K sRU Gas 2023 7 Halmahera A Gas Pipeline Gas Pipeline 35 60 (for PT.Antem) Halmahera on Jetty Engine -2025 Jetty Distribution Distribution 8 Halmahera Weda bay A MFPP MFPP 50 60 Halmahera line line Gas 9 Timika Timika A Gas Pipeline 10 2019 45.8 Jetty MFPP Gas Pipeline Engine 10 Timika Timika 2 MFPP A Gas Pipeline MFPP 50 2019 49.3 11 Tobelo Tobelo B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 4.5 2019 65.2 12 Merauke Merauke B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 20 2019 72.6 13 Fak-Fak MPP Fak-Fak B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 4.5 2020 70 14 Bula Bula B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 3 2021 83 15 Bacan Bacan B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 2.3 2019 92 16 Sanana Sanana B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 4.5 2019 70 17 Morotai Morotai B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 5.3 2019 85.2 18 Kaimana Kaimana B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 6 2020 63.6 19 Langgur Langgur B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 10.5 2019 62.9 20 Namlea Namlea B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 10 2019 41.2 21 Saumlaki Saumlaki B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 4.5 2019 84.2 22 Dobo Dobo B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 6 2019 71.7 23 Seram Seram B ISO LNG Container Platform Gas Pipeline Gas Pipeline GSR 20 2019 28.5 Source: Consultant Team based on the data provided by PMT
Outline of services and money flow of LDPP are shown in the following figure. As shown in the figure below, LDPP project comprises three services, “(1) LNG distribution service by milk-run”, “(2) O&M of satellite facilities”, and “(3) power generation”. In addition to those 3, the services of (2) and (3) are separated into Segment A and Segment B, 5 cash flows are made for the analysis.
5-1
The fees of those services are called as “toll fee”, “satellite fee” and “power generation fee” paid by buyers. The original LNG cost is directly shouldered by PLN, the final buyer of the electricity.
Money flow (out) Service flow Satellite (A) Power Generation (A) Distribution SPC Segment A Segment A LNG milk-run LNG Storage & Electricity Satellite regasification Energy Hub LNG Dist. Satelliteterminal SatelliteEnergyConv. Satellite Function Function terminal EnergyConv. Toll fee Terminal Toll + LCE (Use or Pay) Satellite fee Conv. (Take or Pay) (Take or Pay) PLN Toll + Satellite fee LNG (ISO Tank) (as LNG (Use or Pay) buyer) Segment B LNG Storage & Segment B regasification Electricity LNG Supplier Satellite Energy Satelliteterminal SatelliteEnergyConv. Satellite Toll + terminal Satellite fee EnergyConv. LCE Terminal (Take or Pay) (Take or Pay) Conv.
Satellite (B) Power Generation (B) Figure 5.1 Service and Cash Flow of the Project Source: Consultant Team
5.1 Assumptions (1) Basic assumptions Main assumptions used for the cash flow analysis are summarized in the following table.
Table 5.2 Assumptions of the cash flow analysis Items Assumptions Project Period 23 years (construction 3 years + O&M 20 years) Price Price level in 2019 2.3% / year (IMF forecast in USD) Inflation Rate Annual inflation rate is added on sales price and project cost Depreciation 20 years Period Source: Consultant Team
(2) LNG price LNG price usually fluctuates influenced by crude oil price. In the calculation, the LNG price is assumed based on the current contract terms when the ICP (Indonesian Crude Price) is 62.98 USD/brr. The price is assumed to be stable during the project period.
(3) Demand Forecast Annual LNG demand and generate power of each power plant are calculated by assumed generation capacity (MW) and capacity factor (%).
5-2
25000000 Annual LNG Consumption (mmbtu/y)
20000000
15000000
10000000
5000000
0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Figure 5.2 Assumed LNG demand by the Project Source: Consultant Team
(4) Financial Condition Financial cost is assumed by consultants as shown in the following table based on the interviews and past experiences in Indonesia.
Table 5.3 Assumptions of the cash flow analysis Items Assumptions Equity : Debt Ratio 30% : 70% Interest Rate of 6.0% (in USD） Debt Up Front Fee 1.2% Commitment Fee 1.2% Repayment Period of 18 years (including 3 years of grace period) Debt Repayment Method Principal and Interest Equal Payment Annual profit was disbursed as dividend without Dividend Policy retaining in the company Value Added TAX VAT (10%) is imposed on the CAPEX. VAT is exempted from (VAT) OPEX as it is basically imposed on the final consumer. Corporate TAX 25% Source: Consultant Team
5.2 Result of Cashflow Analysis As a result of the analysis of the cashflow, it was indicated that utilizing LNG can achieve cheaper power generation cost compared to the generation cost by diesel.
5-3
6. BUSINESS SCHEME OPTIONS Serving “Segment B” (Eastern and Underdeveloped Area of Indonesia) requires upfront fixed cost investment in Midstream Infrastructure. We recommend a combination of Hub, S-LNG (small vessel distribution) and ISO Tank distribution system. With this system, benefits to the country are notable including higher electrification ratio, Diesel-to-Gas conversion, cold-heat provision to fisheries industry and LNG VGL for commercial tourism area. However, upfront fixed cost investment will inevitably require gas volume demand for viable financial returns. The key question to be answered is “Who should take gas volume demand risk?” From this view, we propose three options; 1) B-to-B between PLN and Pertamina, 2) PPP AP for distribution hub, 3) PPP AP for all midstream infra. Going forward, the merits and demerits of the options should be discussed by the inter-governmental Working Group, to reach decision on optimal business scheme for implementation.
6.1 Midstream Infrastructure to serve “Segment B” Serving “Segment B” (Eastern and Underdeveloped Area of Indonesia) is the main goal of this project. Based on technical inputs, these locations are not easily accessible using SLNGC distribution only. This is primarily because it will require significant investment in Jetty infrastructure. Rather, based on further technical information and discussions, we recommend introducing ISO tank distribution system. Figure below illustrates the concept using Ambon and Timika as representative example.
Figure 6.1 Midstream Infrastructure Source: Consultant Team based on interview and discussion
6-1
In essence, the midstream infrastructure consists of three components; 1) Hub, 2) SLNGC distribution system and 3) ISO Tank distribution system. Hub and SLNGC milk-run allows key locations of segment A to be used as the “filling station (FS)” to serve segment B. ISO tank will be filled from FS and distributed to segment B locations by container truck or barge or container vessel. Selection of transport mode depends on the site characteristics. Further details of this system and its benefits will be explained using Ambon as an example.
Benefit1: Diesel to Gas, Coal to Gas conversion In Ambon, PLTMG is under construction which is planned to be operated using diesel from PLTD FPP. LDPP recommends to build floating structure with storage, regasification and FPP function. Under this scenario, existing PLTD FPP can be stopped and new PLTMG can be supplied with gas. In addition, PLTU plan, which is not moving, can be converted to gas. As a result, we can enhance the country’s key policy for “Diesel to Gas” conversion. Also, the current pressure to reduce coal-fired power plant can be mitigated by “Coal to Gas” conversion in this example. Figure 6.2 below explains the concept. Example of LDPP Targeted Site in Ambon
Ambon Peaker Supply gas PLTMG 30MW (Const.) PLTU Waai 80 MW (Stop?)
Supply Diesel Onshore Coal to Gas Conversion Offshore FPP By replacing PLTU Waai and Kaladeniz It is planned to be FPP Kaladenis, the floating PLTD stopped due to structure can be equipped 60 MW high rental costs with storage, regasification, FPP and Filling Station Diesel to Gas function. Conversion
Figure 6.2 Benefit of Diesel to gas, Coal to gas conversion Source: Consultant Team based on interview and discussion
Benefit2: Segment A serves as filling station for Segment B, enhancing transport efficiency Based on above structure built in Ambon (Segment A), the structure can have filling station facility to serve Segment B locations such as Morotai (10MW), Bacan (10MW), Seram (20MW), Fak-Fak (10MW), Kaimana (10MW), Namlea (10MW) and Sanana (10MW).
6-2
In this case, the mode of transportation will be either barge or open container ship. Truck transport could be conceived on Ambon island. However, specific sites have not been discussed with PLN yet. Figure 6.3 below describes the system flow image.
Figure 6.3 Segment A LNG terminal as filling station for Segment B Source: Consultant Team based on interview and discussion
Benefit3: Cold-heat from regasification unit could be used for fishery industry development For each site in Segment B, ISO Tank will be connected to Regasification Unit. Thereafter, the gas is delivered to PLTMG for electricity generation. This Regasification Unit generates cold-heat that can be used to produce ice for fishing boats before going out for fishing or to provide cold storage for fish after fishing. Such facility may support the development of fishing industry in this region.
6-3
Figure 6.4 Regasification Unit Generating Cold Heat for Ice Production and Cold Storage Source: Consultant Team based on interview and discussion
Benefit4: Modular PLTMG unit will help to reduce electricity generation demand risk in Segment B Power plant asset investment is not part of midstream infrastructure. In case of segment B, it will most likely be PLN’s investment and asset. An inland ISO Tank and regasification system can be combined with “Modular PLTMG” unit which could be smaller than 1MW per unit. This modular structure will help to ease the demand risk since the asset can be added according to actual demand growth.
6-4
Figure 6.5 Modular PLTMG for demand risk mitigation Source: Consultant Team based on interview and discussion
Benefit5: Piloting LNG VGL to replace LPG and promote nearby tourism area ISO tank can be used to fill LNG VGL, which has the same function as LPG tank. It can be transported to nearby commercial areas for heat generation. The aim is to provide cheaper source of heat to hotels and restaurants. While this technology is still new, it is already tested in large cities such as Bandung. In parallel with Diesel-to-Gas conversion policy, Indonesia is also promoting LPG-to-Gas conversion. This is because LPG, which is the main energy source for cooking, is heavily dependent on imports from Middle East. From a national security point of view, diversification of energy source is a priority. In urban areas, city gas infrastructure is planned to achieve such purpose. However, for rural areas such as segment B, LNG VGL could be one of the solutions worth piloting.
6-5
Figure 6.6 LNG VGL to replace LPG Source: Consultant Team based on interview and discussion
6.2 Hypothetical Business Scheme Options While all the benefits explained above are real and possible, implementation of Midstream infrastructure development is not easy. This is primarily because the nature of Midstream requires an upfront “fixed cost” investment. If it is largely variable cost, then, you can start small and gradually grow the size. That is not the case for Midstream infrastructure business. It is largely fixed cost. Therefore, the key question is “Who will take the gas volume demand risk?” A “use or pay” “take or pay” structure means the buyer takes demand risk. A “use and pay” “take and pay” structure means the supplier takes demand risk. In this section, we would like to explain three possible business scheme options with this in mind.
6.2.1 Option 1: B-to-B Business-to-business (B-to-B) is the most natural option to start considering. If midstream infrastructure can be built on a B-to-B basis, it means the government does not need to provide any form of fiscal contribution or guarantee. That is the first preferred option for the government. In LDPP case, the implementing organization of midstream infrastructure development will most likely be Pertamina or its subsidiary (PGN, Pertagas). For the purpose of explaining the business scheme, we will just call it “supplier”. Similarly, the buyer of gas (who will generate electricity) will most likely be PLN (or IPP in case of large demand sites). For the purpose of business scheme, we will call it “power producer”. In this B-to-B scheme, supplier will provide gas to power producer and receive toll fee and satellite terminal fee. The power producer will generate electricity and sell to PLN at COE (cents/kwh). Therefore, PLN as the purchaser of electricity
6-6 will be paying 1) fuel cost (at FOB gas price which is pass thru), 2) toll fee, 3) satellite terminal fee and 4) power generation fee. Figure 6.7 provides details of the B-to-B scheme.
“Use/Take and Pay” money flow “Use/Take or Pay” /AP money flow Service flow Midstream Infrastructure
Gas provided SLNGC Satellite Terminal Satellite Power Plant Distribution milk-run to plant gate Electricity Segment A Segment A
Generation Satellite Energy (Take or Pay) Satellite Satelliteterminal EnergyConv. Jetty, Satellite terminal Conv. Satellite Storage, Re- Satellite Power Plant Terminal Terminal gasification (Use or Pay) (Use or Pay)
Toll fee Toll fee Filling Station Toll fee PLN (Use or Pay) Small (Use or Pay) (Use or Pay) (as LNG ISO Tank purchaser Hub LNG Gas provided Satellite Terminal Satellite Power Plant of Function Carrier to plant gate Electricity (SLNGC) Segment B Segment B electricity)
Generation Satellite Energy (Take or Pay) Satellite Satelliteterminal EnergyConv. Jetty, Satellite terminal Conv. Satellite Storage, Re- Satellite Power Plant Terminal Terminal gasification (Use or Pay) (Use or Pay) Incl. ISO Tank transport system LNG tanker Fuel Cost (LNG Tariff pass LNG Supplier through based on LNG SPA)
Figure 6.7 B-to-B Business Scheme Source: Consultant Team based on interview and discussion
In essence, under this scheme, PLN as the purchaser of electricity is taking full gas volume demand risk. If the electricity demand is lower than expected and does not consume minimum amount of gas volume required, PLN will still need to pay for the midstream (as well as power plant) infrastructure facility related fixed cost (capacity payment) under “use or pay” or “take or pay” contract structure. In above figure the green color arrow indicates such contract structure. One may consider this to be natural because PLN is the party that plans and controls electricity amount. However, for Eastern part of Indonesia, the real electricity demand has relatively high delay/growth risks that are uncontrollable by PLN.
6.2.2 Option 2: PPP AP for Distribution If B-to-B is not viable from a risk taking perspective, then, the next option for consideration is to use PPP scheme. The main objective of PPP scheme,in this context, is to take out some of the gas volume demand risk from business entity. Therefore, we suggest to consider the usage of Availability Payment (AP). AP is a fixed annual payment provided to the investor of facility, provided that the facility is available for use.
6-7
AP coverage
AP payment GCA “Use/Take and Pay” money flow “Use/Take or Pay” /AP money flow Midstream Infrastructure Service flow Toll fee (Use and Pay) Gas provided SLNGC Satellite Terminal Satellite Power Plant Distribution milk-run to plant gate Electricity Segment A Segment A
Generation Satellite Energy (Take or Pay) Satellite Satelliteterminal EnergyConv. Jetty, Satellite terminal Conv. Satellite Storage, Re- Satellite Power Plant Terminal Terminal gasification (Use or Pay) (Use or Pay)
Filling Station Toll fee Toll fee PLN (Use and Pay) (Use and Pay) Small (as LNG ISO Tank purchaser Hub LNG Gas provided Satellite Terminal Satellite Power Plant of Function Carrier to plant gate Electricity (SLNGC) Segment B Segment B electricity)
Generation Satellite Energy (Take or Pay) Satellite Satelliteterminal EnergyConv. Jetty, Satellite terminal Conv. Satellite Storage, Re- Satellite Power Plant Terminal Terminal gasification (Use or Pay) (Use or Pay) Incl. ISO Tank transport system LNG tanker Fuel Cost (LNG Tariff pass LNG Supplier through based on LNG SPA)
Figure 6.8 PPP AP for Distribution Source: Consultant Team based on interview and discussion
6.2.3 Option 3: PPP AP for Distribution and Satellite In Option3, the coverage of AP is expanded to include Satellite Terminal infrastructure. In other words, all midstream infrastructure is covered by AP. In this scheme, demand risk for PLN is minimized to the power generation cost portion (fuel cost demand risk depends on content of LNG SPA). Conversely, the midstream fixed cost demand risk is largely allocated to GCA. Figure 6.9 indicates that the Distribution and Segment A Satellite Terminal could be covered by one type of investor (colored in yellow) and Segment B Satellite Terminal could be covered by another type of investor (colored in orange). This is because the skill set required to serve segment B using the ISO tank would be different from the rest.
6-8
AP coverage SPC 1 AP coverage SPC 2 AP payment GCA “Use/Take and Pay” money flow Toll fee + Satellite Terminal “Use/Take or Pay” /AP money flow Midstream Infrastructure (Use and Pay) Service flow AP payment Gas provided SLNGC Satellite Terminal Satellite Power Plant Distribution milk-run to plant gate Electricity Segment A Segment A
Generation Satellite Energy (Take or Pay) Satellite Satelliteterminal EnergyConv. Jetty,terminal SatelliteConv. Storage, Re- Power Plant Satellite gasification Terminal (Use and Pay)
Filling Station Toll fee PLN Small (Use and Pay) (as AP payment LNG ISO tank purchaser Hub LNG Gas providedSatellite Terminal (Use and Pay) Satellite Terminal Satellite Power Plant of Function Carrier to plant gate Electricity (SLNGC) Segment B Segment B electricity)
Generation Satellite Energy (Take or Pay) Satellite Satelliteterminal EnergyConv. Jetty,terminal SatelliteConv. Storage, Re- Power Plant Satellite gasification Terminal (Use and Pay) Incl. ISO Tank transport system LNG tanker Fuel Cost (LNG Tariff pass LNG Supplier through based on LNG SPA)
Figure 6.9 PPP AP for Distribution and Satellite Source: Consultant Team based on interview and discussion
6.3 Assessment on the Possible Contracting Agency under PPP AP Under option2 and 3, GCA will play a key role. In our view, the GCA could be the same as the implementing organization of midstream infrastructure; namely Pertamina. Under PPP regulation, 100% State Owned Enterprise (SOE) can become GCA. Therefore, it is possible from a regulatory perspective. However, it is important to note that Pertamina is a profit making business entity. Therefore, our suggestion would be for Pertamina to play the GCA role as service to the government. All the budgeting for “AP minus the toll fee (and satellite fee revenue in case of option3)”, the demand risk portion, will need to be budgeted (or compensated) by the state.
Difference of Pertamina role under Option1 B-to-B, and Option2/3 PPP AP Going forward, it would be important to assess Pertamina and PLN’s views on business scheme options. It is important to note that under option1, if Pertamina and PLN could reach a business agreement, then, Pertamina’s role as implementing organization would be to select an EPC contractor best suited to develop the midstream infrastructure. Under option2/3, Pertamina’s role would be to play the GCA role and select an investment consortium that can best provide midstream facility in terms of financing, design, construction, and O&M to provide availability services.
6-9
7. NEXT STEP SUGGESTION This report is aimed at providing an independent assessment of the LDPP project feasibility and to provide business scheme options for discussion. After a business scheme has been determined, a pre-FS should be implemented to develop a detailed implementation plan.
7-1
8. HUB CONSTRUCTION PLAN Considering the redundancy of the operation of the entire small-lot LNG distribution and the improvement of the utilization rate of small-scale LNG carriers, there is an advantage in setting up a HUB base. If there is no HUB base, transportation from the LNG supply port to each site will be performed individually, it’s resulting in poor transportation efficiency and lack of flexibility. Study of HUB construction plan is as follows.
8.1 Study for the HUB location The HUB location shall be decided based on the location and number of delivery points, the amount of LNG demand and distribution route. The Distribution efficiency could be enhanced by placing the HUB at large-demand location, receiving large-lot LNG by large-scale LNG vessels at the HUB location, and distributing break-bulk LNG to other delivery points following each limitation of the receivable amount. Depending on the demand and the limitation of the receivable amount on each delivery point, break-bulk LNG is to be distributed by small-scale LNG vessels, ISO containers and LNG tank lorries transport. The engineering concept of the HUB facility is as follows:
Floating Storage Unit (FSU)※ capable to storage LNG about 138,000 ㎥; (※To utilize and modify an existing LNG carrier) To construct a jetty mooring FSU; To install regasification units on the jetty according to gas demand for inland power plant; To construct trestle bridges between the jetty and the land and to place pipe rack and cable rack on the trestle bridges; and To place Floating Power Plant (FPP) along with trestle bridges in future.
Based on the above engineering concept, below three points are evaluated for the selection of HUB location: The HUB location has relatively large-demand of LNG and so it can storage most of cargos transported by large-scale LNG vessels; Easy access to sea route from the HUB location to each delivery points; and Various types of LNG vessels can approach sea areas at the HUB location.
8-1
8.2 Facility Design 8.2.1 HUB facility design HUB facility is consist of following equipment. ・FSU as LNG storage unit ・Mooring facility（Jetty/Dolphin berth/fender/mooring rope/quick release hook）
Jetty/Dolphin berth/fender/mooring rope are utilized for FSU, a large-scale LNG carrier which supply LNG to FSU and a small-scale LNG carrier which receive LNG from FSU and distribute small-lot LNG to each site. Quick release hook is installed for emergent leaving in stormy weather or fire. “Ship to Ship operation” is not considered. Large-scale LNG carriers transporting cargo and small-scale LNG carriers distributing breakbulk cargo will discharge/load LNG to/from FSU over a jetty. A Small-scale LNG carrier use the same jetty when a large-scale LNG carrier does not use it. Attachment 8.1 shows block flow diagram and figure 8-8 shows mooring plan.
(1) The trestle connects the FSU jetty for the HUB and onshore. If the FSU for the HUB can be moored at sea not far from the coast, a trestle connecting the FSU to land shall be installed. The trestle connects land and FSU mooring jetty platform/support platform on which auxiliary facilities are installed. The trestle has regasified natural gas supply piping, electric power cables for electric power supply to FSU, and has a passage for transporting materials and personnel to FSU. If the HUB FSU has to be moored at a long distance from the shore because of shallow water, the trestle to the shore will be long and costly. In this case, no trestle will be installed, and island type mooring jetty and a support platform equipped with the necessary facilities will be installed. Natural gas will be supplied to the shore by submarine pipeline and power from shore will be supplied also by submarine power cables. Service boats are used to transport necessary materials and personnel to the FSU.
(2) Facility design on jetty a) Loading/ Unloading Arm • For safety reason, discharging/loading operation shall not be in ship to ship method. Loading and unloading arm will be installed on a jetty and operation
8-2
will be conducted via a jetty. • In order to reduce cost, it is desirable to flexibly use loading/discharging arm for both the loading operation from large-scale LNG carrier and FSU and the discharging operation from FSU to small-scale LNG carrier. However, the position of manifold of large-scale LNG carrier and that of small-scale LNG carrier could be differed so the arms should fit for specification of both LNG carrier. b) Unloading / receiving / loading operation equipment Equipment required for unloading / receiving / unloading operations is installed on the jetty platform. c) Other security equipment, etc. The jetty platform has security facilities specified by laws and regulations.
(3) The support platform for LNG regasification unit / BOG (Boil Off Gas) booster compressors / electric power supply system and other utility facilities. This support platform will be equipped with the following equipment.
a) LNG regasification unit to supply fuel gas from FSU to the onshore shore power plant. b) BOG booster gas compressor that sends BOG to onshore power plant. c) Power generation facilities (supply power to FSU and facilities on jetty / support platforms) d) Cooling water system e) Instrumentation air / service air system f) Water desalination system for potable water generation unit and other use g) Security facilities
8.2.2 Setting for large-scale LNG vessels to be utilized as FSU A Floating Storage Unit (FSU), which is modified from an existing large-scale LNG vessel, is planned to be placed at the HUB station so that it can reduce the investment amount and the risk on land acquisition. Although it is considered that a propulsion system equipped with an existing large-scale LNG vessel becomes deteriorated, FSU does not need to sail but to storage LNG with moored to a jetty by utilizing the existing LNG tank. For the purpose to ease modification work from an existing large-scale LNG vessel into FSU, a regasification unit will be
8-3 installed on a jetty, which re-gasifies LNG on the jetty, and the re-gasified gas will be delivered to the power plant on land. The following projects are based on similar concepts.
Table 8.1 Existing FSU projects Project Name Vessel Name New-Built/ Delivery Tank Modified Year Capacity Delimara LNG in Malta Armada LNG Mediterrana Modified 1985 127,209m3 Melaka LNG in Malaysia Tenaga Empat Modified 1981 130,000m3 Melaka LNG in Malaysia Tenaga Satu Modified 1982 130,000m3 Bahrain LNG in Bahrain Bahrain Spirit New-Built 2018 173,400m3
As of the end of 2018, the number of large-scale LNG vessels after completion of delivery was 525 (110 vessels were on order), which increased together with LNG demand. Most of LNG vessels are engaged into existing projects based on long-term charter contracts but it is relatively easy to procure vessels from the market since more and more charter contracts for large-scale vessels delivered on 1990s have been/will be expired. For the above reason, moss-typed LNG vessel with 138,000 ㎥ tank capacity is used as an “model vessel” for FSU. Attachment 8-2 shows the general situation over large-scale LNG vessels.
Figure 8.1 Large-scale LNG vessel to be utilized for FSU (model)
8-4
Figure 8.2 Large-scale LNG vessel to be utilized for FSU (model)
Table 8.2 Specifications on model vessel Capacity 137,419.9 m3 LOA 297.50 m Breadth 45.75 m Depth 25.50 m Draft 11.215 m Gross Tonnage 111,128 T Deadweight 72,430 T Boil-Off Rate 0.15 % / day Main Engine Steam Turbine
8.2.3 Study for FSU operation In this study, a 138,000 ㎥-sized and moss-type existing LNG carrier built in the late 1990s was used for the assumption of FSU. Operation of FSU is also defined as follows. For the purpose to reduce maintenance cost and enhance energy efficiency, equipment such as a boiler and steam turbine installed on existing LNG carrier is not used in this study. Using existing equipment is not practical since it has drawbacks of deterioration and energy inefficiency, which increases cost for required modification and operation & maintenance. However, it is necessary to confirm to a port authority about the operational requirements to clarify whether existing equipment should be remained stand-by condition or not due to the safety reason. Following operational conditions are assumed in this study:
• a 138,000 ㎥-sized and moss-type existing LNG carrier will be used as FSU for 20years;(For FSU, modification and life-extension work is required.)
8-5
• FSU will be moored with a jetty or dolphin berth; • Existing boiler, propulsion, or steam turbine generator equipped with FSU will not be used and FSU will be towed by tugboat in emergency; • Heat source for heater used in gas-free operation and LNG vaporizer in gas-up operation are required since an existing boiler will not be used; • Large-scale LNG carriers transporting cargo and small-scale LNG carriers distributing breakbulk cargo will discharge/load LNG to/from FSU over a jetty (Ship to Ship(STS) operation using a flexible hose and fenders were not considered but the operation over a jetty was selected due to safety reason taking frequency of cargo operation of FSU into consideration.); • Large-scale LNG carriers and small-scale LNG carriers will not discharge/load LNG to/from FSU simultaneously; • Same Emergency Shut Down System/Ship shore link will be installed to all system among FSU, power plant, small-scale LNG carrier and Large-scale LNG carrier; • FSU will be able to supply LNG continuously for 24 hours to a regasification unit installed on a jetty, • FSU will not hold reliquification unit onboard and Boil-Off Gas will be sent to land; • A gas-engine power generator will be installed on a jetty which regularly provides electricity to equipment of FSU and on a jetty; • Water for domestic use will be supplied to FSU from land (Depending on the cost for laying pipeline, it is considerable to produce water by electricity onboard.); • FSU will not have a turret or fenders for STS since FSU will be moored with jetty and STS operation is not assumed; • FSU will have fenders to receive goods from supply boat; and • Dock exemption will be obtained, and docking will not be needed for 20 years.
8.2.4 Study for BOG handling method Boil-Off Rate for existing 138,000m3 of LNG carrier delivered in late 1990 is 0.15%/day. Natural BOG will happen by the external effect of natural heat and the amount of BOG is about 90mt/day (LNG weight base). If cargo tanks hold LNG, BOG is generated at any times so BOG should be disposed in order not to exceed limitation of setting cargo tank pressure. There are only three ways of BOG treatments: ①to utilize it as an energy, ②to incinerate it, or ③to re-liquify
8-6 it into LNG. Besides Natural BOG, BOG will be generated during the LNG loading operation from large-scale LNG carrier to FSU and the LNG discharging operation from FSU to small-scale LNG carrier. This study considers the operation to make effective use of BOG as a fuel for power generation.
Examples of BOG/flammable needed to be handled A) BOG (Natural BOG) generated by the external effect of natural heat B) BOG generated during the LNG loading operation from large-scale LNG carrier to FSU C) BOG generated during the LNG discharging operation from FSU to small-scale LNG carrier D) Flammable gas in gas-free and gas-up operation of FSU E) Flammable gas in gas-free and gas-up operation of small-scale LNG carrier
Summary of cases where BOG is generated and the way to handle BOG A) BOG (Natural BOG) generated by the external effect of natural heat • To install booster gas compressor on a jetty, pressurize the Natural BOG, send high-pressured BOG to natural gas pipeline, and utilize it as a fuel for power generation. • To incinerate surplus BOG in case that a power generation on land cannot consume all Natural BOG or its consumption amount of gas varies. Since existing boiler equipped with FSU cannot be used, a Gas Combustion Unit (GCU) will be newly placed for incineration. • BOG will be burned by GCU in emergency. • Basically, BOG will be consumed for power generation on land as far as demand for gas exists. In order to minimize the investment amount, re-liquification unit will not be installed.
B) BOG generated during the LNG loading operation from large-scale LNG carrier to FSU • Normally, a lot of BOG is generated upon the commencement of the LNG loading operation.it is possible to reduce the volume of BOG by slowing down the loading rate but it increases the time for loading operation, which should be avoided. Generally, loading rate from land terminal to large-scale LNG carrier is usually at 10,000m3/, and pressure inside LNG cargo tanks of large-scale LNG carrier is maintained by returning BOG on large-scale LNG
8-7
carrier to land terminal. • In this study, FSU will send BOG to land. Booster gas compressor will be placed on a jetty, which pressurizes BOG and sends it to a power plant on land through natural gas pipeline. That BOG will be utilized as a fuel for power generation. • In addition, FSU will hold BOG as much as possible by increasing the limitation of setting cargo tank pressure, which reduces the BOG amount. • Surplus BOG which cannot be disposed by the above operation will be burned by GCU. • BOG cannot be sent to land in ship to ship operation between large-scale LNG carriers. So, the amount of BOG will be minimized by decreasing loading/discharging rate or temporary interrupting operation and surplus BOG will be burned by boilers or GCUs on both LNG carriers. That is why actual loading/discharging rate is low around 3,000～4,000m3/h and longer time is required in ship to ship operation. Specification of the FSU should be set as capable to load/discharge LNG at 10,000m3/h since the FSU is expected to operate frequently.
C) BOG generated during the LNG discharging operation from FSU to small-scale LNG carrier • BOG is generated during the LNG discharging operation from FSU to small-scale LNG carrier. • Basically, pressurized tank of small-scale LNG carrier receives the BOG but BOG can be sent back to FSU from small-scale LNG carrier.
D) Flammable gas generated in gas-free and gas-up operation of FSU • Gas-free is one operation to replace flammable gas cargo inside tank into air. Firstly, flammable gas is replaced to Inert gas, and then inert gas will be done to air. On the contrary, Gas-up is an operation to replace air inside tank into flammable gas. Those operations are required in regular inspection such as periodical dry-dock etc. • In the process of gas-free/gas-up operation by using Inert Gas Generator (IGG) equipped on FSU, flammable gas mixed up with inert gas happens. • Power generator such as GTCC cannot used such mixed and low-calorie gas as a fuel so that gas is not sent to power plant in land but is burnt by GCU.
8-8
E) Flammable gas generated in gas-free and gas-up operation of small-scale LNG carrier • Generally, gas-free and gas-up operation can be conducted by using facilities of small-scale LNG carrier. • However, capacity of GCU and IGG on small-scale LNG carrier is inferior to those of FSU so time for gas-free and gas-up can be shorten by using those of FSU. • Integrated operation of FSU and small-scale LNG carrier and optimization of each facility is necessary to be considered. • As well as D), flammable gas generated through gas-free and gas-up operation and mixed with inert gas cannot be consumed in power plant in land, so it is burned by GCU of small-scale LNG carrier or FSU.
8.2.5 Power supply equipment of HUB “Model vessel” is equipped with three steam turbine generators (TG) and one diesel generator (DG) (Power generation capacity is 2,000kW per each generator). Since the maintenance of steam plant takes huge time and efforts, this chapter decides optimum equipment composition which uses a minimum facility taking operation and redundancy into consideration. As a result of study, considering with operational redundancy and simplification and cost reduction of maintenance, the best option is that existing boiler, propulsion system and steam turbine generator are deactivated, and tag boat tows FSU in emergent leaving. Without relying on land electricity system, electricity for FSU and equipment on a jetty will be supplied from newly installed gas engine generator on a jetty. Gas engine generator will supply electric power not only for FSU, but also for pumps to LNG vaporizing and supplying system, booster gas compressor to pressurize and send BOG to shore power plant. It will supply electric power to emergency fire pumps, re-gasification unit, compressor and other gas related equipment on the jetty.
8.2.6 Other HUB facilities On the premise that the utilizing the existing equipment of the model vessel assumed as the FSU, the equipment required as a HUB was studied.
8-9
(1) Loading/ Unloading Arm • For safety reason, discharging/loading operation shall not be in ship to ship method. Loading and unloading arm will be installed on a jetty and operation will be conducted via a jetty. • In order to reduce cost, it is desirable to flexibly use loading/discharging arm for both the loading operation from large-scale LNG carrier and FSU and the discharging operation from FSU to small-scale LNG carrier. However, the position of manifold of large-scale LNG carrier and that of small-scale LNG carrier could be differed so the arms should fit for specification of both LNG carriers.
(2) LNG buffer tank • LNG buffer tank will be placed as a minimum facility to control an operation of regasification unit on a jetty. • LNG supply from FSU to regasification unit could be stopped because of leaving, blackout, ESD test of FSU. Even in those cases, gas should be continuously supplied to land power plant. Depending on the requirements of land power plan, it is necessary to consider increasing buffer tank size.
(3) Mooring system of FSU and LNGC • Mooring system at HUB location shall be planed capable to moor FSU, large-scale LNG carrier, small-scale LNG carrier. • Mooring facility will be placed on the location which can secure 15m depth since FSU itself requires as deep draught as large-LNG carrier requires.
Mooring facility has following equipment and moored by hawser. To be ready for emergent leaving in stormy weather or fire, a quick release hook shall be installed.
A Mooring Jetty for FSU/large-scale, small-scale LNG carrier Breasting Dolphin Mooring Dolphin Catwalk between Dolphins Mooring Fender
8-10
Figure 8.3 Mooring Plan of FSU/LNG carrier
Figure 8.4 shows mooring plan of FSU/LNG carrier. Additionally, Figure 8.4 shows an example of mooring with FSU and LNG carries. Figure 8.5 shows loading arms on a jetty. Fig 8.6 shows an example of quick release hook on a jetty.
Figure 8.4 Example of mooring with FSU and LNG carries Source：Petronas web site
8-11
Figure 8.5 Loading arms on a jetty Source：Flotech Performance Systems Limited web site
Figure 8.6 Example of quick release hook on a jetty Source：Trelleborg web site
(4) Jetty / Trestle The mooring facilities at the HUB are as described in (3). For the operation of the FSU, the following facilities will be installed on a support platform. ・ Regasification unit for supplying natural gas to onshore power plants
8-12
・ Booster gas compressor for BOG to onshore ・ Power generation unit for power supply to FSU ・ Frequency converter in case that power can be received from shore power grid,
Because the electric system of LNG carrier modified to FSU was designed and equipped with 60Hz system, but Indonesia power supply network frequency is 50Hz. In case the HUB FSU can be moored at a short distance from the shore, the FSU jetty platform can be connected to the land by a trestle. The trestle will connect the mooring jetty, the support platform and the land. The trestle has natural gas supply pipes, power receiving lines, and has a passage for transporting necessary materials and personnel to the FSU. If the HUB FSU has to be moored at a long distance from the shore because of shallow water, the trestle to the shore will be long and costly. In this case, no trestle will be installed, and mooring equipment and a platform equipped with the following equipment will be installed on the sea, natural gas will be supplied to the shore by submarine pipelines, and power from shore will be supplied also by submarine power cables. Service boats are used to transport necessary materials and personnel to the FSU. ・ Regasification Unit for supplying natural gas to onshore power plants ・ Booster gas compressor for BOG to onshore ・ Power generation unit for power supply to FSU ・ Frequency converter when power can be received from shore power grid
(5) Receiving and loading facility In case FSU receives LNG from large-scale LNG carrier, facility components will be similar that in operation between large-scale LNG terminal and large-scale LNG carrier. In this sense, existing facility on FSU will be utilized. Study for BOG handling method is shown on 8.2.4 B). In case loading LNG from the FSU to a small LNG carrier, it is necessary to pay attention to whether or not it is necessary to replace the existing LNG delivery pumps on the FSU side with the amount that can be accepted by the small LNG carrier. The processing method of the BOG in this case is described in 8.2.4 C).
(6) Facility of LNG regasification and gas supply facilities The LNG regasification and gas supply facilities installed on a supporting platform are comprised of the followings:
8-13
• Suction drum for high-pressured LNG pump • High-pressured LNG pump • Open-rack vaporizer （heat source for vaporizer is sea water） • Sea water pump（under platform） • Pipeline to send out re-gasified LNG
* Capacity of high-pressured LNG pump, discharge pressure, capacity of vaporizer will be decided based on the specifications of the onshore power generation plant.
(7) Security and Fire-fighting facilities • Security of FSU will be done by facilities of existing large-scale LNG carrier. • On the mooring facility side, supply goods from land side will be used if FSU is connected to trestle. a) Security equipment (equipment for early detection) ・ Monitoring camera ・ Combustible gas detector ・ Low temperature detector ・ Automatic fire alarm ・ Emergency power generation equipment ・ Escape equipment in case of emergency b) Firefighting equipment [Water fire extinguishing equipment] ・ Water curtain equipment ・ Sprinkling equipment ・ Water hydrant [Foam fire extinguishing equipment] ・ High foaming equipment ・ Low foam fire extinguishing equipment ・ Foam hydrant ・ Foam monitor ・ Powder fire extinguishing equipment (fixed type / monitor type) ・ Fire extinguisher (large powder, large foam, small) [Inert gas firefighting equipment]
8-14
·nitrogen ·carbon dioxide [Other firefighting equipment] ・ Seawater fire pump ・ Fire pump for fire extinguishing equipment ・ Disaster prevention monitoring panel ・ Seismometer
(8) Utility system FSU has diesel engine generator and emergency generator and they are kept usable. But the boiler, which supplies the steam for the main power generator turbine, is aging, costly to revamp, and require personnel for operation and maintenance. Instead of utilizing the existing boiler/steam turbine driven power generator, newly installing gas engine driven power generators on the support platform which supplies necessary electric power to FSU is preferred. The power generators on the platform supply power not only to the FSU, but also pumps of LNG regasification unit, BOG booster gas compressors, jetty and support platform equipment such as seawater fire pumps, etc. In case HUB FSU jetty platform is connected to the shore via a trestle, it is considerable of the possibility of receiving power from the onshore power grid, laying a power cable on the trestle, and supplying power to the FSU after frequency conversion for easier operation. If the HUB FSU has to be moored at a long distance from the shore because of shallow water, as the trestle becomes too long, and instead of trestle construction, submarine transmission lines for receiving power from the onshore power grid is preferable.
(9) Cooling Water System • Existing facility will be used in FSU. • On a jetty and a supporting platform, cooling water system by fresh water will be installed for equipment that does not allow seawater cooling.
(10) Facility of air supply • Existing facility will be used in FSU. • On a jetty and a supporting platform, air supply system will be installed on a support platform.
8-15
(11) Living Water • If FSU is connected to trestle, living water could be supplied from onshore. In case trestle is not installed, fresh water making apparatus will be installed on a support platform.
(12) Onshore facilities If gas is sent from the HUB FSU to the onshore power plant via pipeline and power is supplied from onshore, the following facilities will be installed onshore. A marine warehouse and workshop to support the operation / maintenance of the HUB FSU and jetty/support platform will be attached to the Marine House. ・ Gas pipeline connection / metering station ・ Substation facilities
8.3 HUB Operation & Maintenance Policy and Organization Study 8.3.1 HUB Operation & Maintenance FSU is considered a vessel under Indonesian law and has a minimum crew of 19 persons. Considering that gas is being sent to an onshore power plant for 24 hours continuously, it is assumed that normal operation & maintenance will be performed by 21 persons, including two operation personnel. It is assumed that fire-fighting on the FSU will be carried out by the crew of the FSU, but it is also possible that the crew of the FSU work with the fire-fighting team of onshore power plant. It is necessary to carry out a risk assessment with taking into account the overall operation, and finally decide with the permission of the port authorities. A marine house will be set up on the land side, and personnel of a marine house will be assigned to supervise cargo handling at the FSU and maintenance work of the re-gasification facility and gas engine power plant on the jetty. In addition, in accordance with the manufacturer's recommended maintenance policy for each facility, technicians will also be dispatched from time to time to perform maintenance.
8.3.2 Organization The breakdown of FSU crew and Marine House personnel is shown in the table 8.3. FSU operation is assumed to be three shifts, and FSU maintenance and cooks are assumed to be working during daytime only. In this case, a total of about 21 persons are required for the operation of the FSU. It’s assumed that all members of the marine house will work during only
8-16 daytime, a total of 8 persons are required as shown in Table 8.4.
Table 8.3 FSU crew Operation crew Shift ① FSU maintenance crew
Officer 2 persons Officer 2 persons Cargo handling Rating 2 persons Rating 3 persons Cargo handling Rating 1 person Stand-by on jetty
Operation crew Shift ② Cook
Officer 2 persons Rating 1 person Cargo handling Rating 2 persons Cargo handling Rating 1 person Stand-by on jetty
Operation crew Shift ③
Officer 2 persons Cargo handling Rating 2 persons Cargo handling Rating 1 person Stand-by on jetty
Table 8.4 Marine house members Operation supervisor
Manager 1 person
Jetty maintenance personnel Chores
Staff 2 persons Staff 2 persons
Office personnel Cook
Staff 2 persons Staff 1 person
8-17
9. STUDY ON NEW DEMAND CREATION 9.1 Study on Demand Firmness In this chapter, possibility of natural gas utilization (new demand creation), other than thermal power generation fuel used for commercial power network of the state-owned enterprise (PLN), is considered and certainty of the demand is validated. In addition, possibility of contribution to regional development through natural gas use is considered.
9.1.1 Selection of Candidate Sites As a model case for validation, natural gas spread project model in North Sulawesi was examined. The reason why North Sulawesi is chosen as a target site is that the area has potential demands of commercial use of natural gas in hospitals, shopping malls and hotels, and also industrial use in canning plants. Moreover, as resort development and industrial park development are planned in the district, allowance and possibility of increased natural gas use is expected in the future.
9.1.2 Study on Natural Gas Demand 9.1.2.1 Natural Gas Demand in Japan Before considering natural gas spread project model in North Sulawesi, we will show the history of natural gas introduction and spread in Japan. Fifty years ago, in November, 1969, Japan imported liquefied natural gas (LNG) for the first time, under cooperation of Tokyo Gas Co., Ltd. and Tokyo Electric Power Co., Ltd. There are three reasons why Japan decided to import LNG. First, energy demand increased under high economic growth. Second, air pollution became severe, and clean fuel without sulfur oxides discharge was required. Third, natural gas has an advantage of worldwide existence, unlike oil concentrating in Middle East. After introduction of natural gas in Japan, as shown in Fig.9.1, natural gas use as power plant fuel increased, and its use as feedstock for city gas was spread extensively. Focusing on its use as feedstock for city gas in Japan, industrial use such as furnaces and boilers substituting for other energy like oil was rapidly spread after 1980s. Further, from a view point of energy saving and environmental affinity, the use of natural gas was expanded to areas of kitchen appliances for business use, air conditioning, combined heat and power (CHP), fuel cell and natural gas vehicle (NGV).
9-1
Fig.9.1 Change of LNG sales in Japan for different purpose By Research Organization for Information Science and Technology (RIST)
Fig.9.2 Representative products and facilities in Japan using natural gas
9-2
9.1.2.2 Natural Gas Demand in North Sulawesi As mentioned above, natural gas related products and facilities, such as industrial furnaces, boilers, commercial kitchen, air conditioning, CHP, fuel cell and NGV, are widely spread in Japan. On the other hand, higher average air temperature and less needs of heat source (hot water supply) in Indonesia imply less demand of household use of natural gas. However, considering the advantage of natural gas such as environmental friendliness, high efficiency and energy security achieved by introduction of CHP*, natural gas is expected to spread more for commercial and industrial use in Indonesia. For North Sulawesi, possibility of commercial and industrial use of natural gas assuming introduction of CHP will be considered in this section, and potential demand will be estimated.
Fig.9.3 Configuration of consumer CHP using internal combustion (gas engine) By ACE JAPAN
＊ ‘Combined heat and power’ is a generic name of systems which produce and supply electric power and heat from heat source. Connected to commercial power network, generated power is supplied. Vapor and hot water generated from waste heat are used in manufacturing processes, absorption chiller for air conditioning, or hot water supply. Thus the system has advantage of energy saving, CO2 reduction and economic efficiency. Combination of CHP and commercial power network leads to redundancy and stabilization of power supply.
9-3
Fig.9.4 Image of total energy efficiency improvement with CHP By ACE JAPAN
9.1.2.3 Expected area in North Sulawesi for natural gas demand Three areas are in northern part of North Sulawesi, being not so distant each other. Manado is the capital and the central city of North Sulawesi. Bitung has an international hub port, is designated as Special Economic Zone (SEZ), and includes an industrial park project site. Future resort development is expected in Likupang where president Joko Widodo visited to inspect in 2019. Focusing on the three areas, possibility of commercial and industrial use of natural gas assuming introduction of CHP will be considered in the section, and potential demand will be calculated. Details are as follows.
Fig.9.5 Map of the northern part of North Sulawesi
9-4
［Possibility of commercial demand］ Commercial use of natural gas is expected in Manado, the capital, and Likupang, a resort area. Many general hospitals, shopping malls and hotels are in Manado. Some hotels are in Likupang as a resort area. The field investigation in 2018 clarified that most of the general hospitals, shopping malls and hotels are equipped with electric central air conditioning systems. If combination of CHP and waste heat gas absorption chiller is introduced, merits as ‘low carbon’, ‘energy saving’ and ‘energy security enhancement’ can be appealed. Assuming a case mentioned above, potential natural gas demand of Manado and Likupang are estimated as Table 9.1 and Table 9.2.
Table 9.1 Potential natural gas demand of general hospitals, shopping malls and hotels in Manado Facility Gas utilized equipment Annual gas demand General hospital CHP＋waste heat gas absorption chiller 175 BBTU Shopping mall CHP＋waste heat gas absorption chiller 729 BBTU Hotel CHP＋waste heat gas absorption chiller 180 BBTU Total 1,085 BBTU ＊ Shopping malls with more than 100,000m2 of total floor area and 5-star rating hotels were extracted. ＊ Considering the high air temperature throughout the year in Indonesia, necessary scale of the gas equipment was estimated according to power demand and air-conditioning capacity based on the product of average load amount from July to September in Japan and number, total floor area and business hours of each facility obtained from the research. Natural gas demand was calculated from the gas equipment scale.
Table 9.2 Potential natural gas demand of hotels in Likupang Facility Gas utilized equipment Annual gas demand Hotels CHP＋waste heat gas absorption chiller 85 BBTU ＊ 4-star rating hotels were extracted. ＊ Demand estimation method is similar to that of Manado.
9-5
Fig.9.6 Details of potential demand in Manado
Fig.9.7 Details of potential demand in Likupang
9-6
［Possibility of industrial demand］ For industrial use, Bitung is a possible site for natural gas demand because marine products industry is developed and new industrial park is planned. Port Bitung is an international hub port, and is one of the largest seven port for deep-sea fishing in Indonesia called PPS（Pelabuhan Perikanan Samudera）. Many of 1)refrigerators, cold storages and ice making plants, 2)canning plants, and 3)bonito shaving factories, are located along the coast. In a canning plant, as illustrated in Fig.9.8, canning process includes ‘steam cooking’ and ‘high-pressure heat sterilization, cooling’ that require heat demand. If coal and/or diesel fired power generator and combustion equipment (boiler, dryer) are replaced by combination of CHP and high efficiency gas boiler, ‘low carbon’, ‘energy saving’ and ‘energy security enhancement’ will be achieved in industrial use of natural gas in Bitung.
Fig.9.8 Canning process By Japan Canners Association “Canning Handbook”
According to data published by North Sulawesi government, five canning plants are located in Bitung. Natural gas demand was estimated from scale of gas equipment required. The scale of the equipment is calculated with annual production and operating time of the five plants, and annual gas use of the canning plants (invested by Japanese corporation) in other area of Indonesia. Results are in Table 9.3.
9-7
Table 9.3 Potential natural gas demand of the canning plants in Bitung Facility Gas utilized equipment Annual gas demand Canning plant CHP＋high efficiency gas boiler 884 BBTU
Table 9.4 Details of potential demand in Bitung
③ ② ③ ④ ⑤ Annual production＊1 【t/y】 34,400 15,000 12,000 7,500 6,000 Assumed annual demand 【MMBTU】 High efficiency gas boiler（A） 135,334 59,012 47,210 29,506 23,605 CHP＊2（B） 189,638 189,638 189,638 60,127 60,127 CHP waste heat recovery（C） 26,575 26,575 26,575 10,118 10,118 TOTAL（A＋B－C） 298,397 222,075 210,273 79,515 73,613 ＊1 Data published by North Sulawesi government ＊2 Calculated with; performance of CHP（gas engine type）5,750kw for ①-③, 1,500kW for ④-⑤, and annual operating time 4,112 hours
Fig.9.9 Details of potential demand in Bitung（distribution）
9-8
Table 9.5 Natural gas potential demand of the three areas in North Sulawesi (Summary) Area Assumed gas use Annual gas demand Commercial use （ general hospital, shopping Manado mall, hotel）, introduction of CHP＋waste heat 1,085 BBTU gas absorption chiller Industrial use（canning plant）, introduction Bitung 884 BBTU of CHP＋high efficiency gas boiler Commercial use（hotel）, introduction of CHP Likupang 85 BBTU ＋waste heat gas absorption chiller Total 2,054 BBTU
9.1.2.4 Risk analysis on upward/downward fluctuation of demand Natural gas potential demand of the three areas in northern North Sulawesi is shown in Fig.9.5. In this section, risk analysis on upward/downward fluctuation of demand is described.
［Possibility of upward fluctuation］ Possibility of upward fluctuation of demand is shown in Table 9.6.
Table 9.6 Possibility of upward fluctuation of natural gas demand (Summary) Area Case of upward fluctuation of natural gas demand Natural gas use due to fuel change of existing diesel power generators Common scattered in North Sulawesi Natural gas introduction to commercial kitchen etc. (replace LPG), other than air conditioning Manado Natural gas use in small sized commercial facilities including shopping malls with less than 100,000m2 of total floor area and 4- or less rated hotels Natural gas introduction to industries other than canning plant (replace diesel) Bitung Natural gas introduction for power supply to the new industrial park or companies in it (replace diesel) Natural gas introduction to commercial kitchen etc. (replace LPG), other than air conditioning Likupang Natural gas introduction to new hotels constructed in the future as resort development
9-9
［Possibility and risk of downward fluctuation, and measures］ For downward fluctuation, common in each area, the estimation is somewhat different from actual condition, because the estimation is not based on detailed field research, and results of the research (total floor area of each facility, business hours, or plant product) was analyzed together with Japanese examples. (There is also possibility of upward fluctuation.) As natural gas demand of the three area in northern part of North Sulawesi is estimated to be relatively small, 2,054 BBTU (41,000t for LNG) shown in Table 9.5, LNG transportation by ISO container is assumed in the natural gas use spreading model, as described in Section 9.2 in detail. Transportation by ISO container is assumed from a viewpoint of feasibility under small demand condition, but, as the natural gas demand is just potential demand, there is a risk of unprofitability in case of extreme downward fluctuation. In such a case, it may be effective to enhance introduction of CHP to improve potential demand into confirmed demand, supported by North Sulawesi government with subsidy. Moreover, for confirmation of demand, incorporation with electric power demand may be effective. Then, as mentioned above section for upward fluctuation possibility, stable and certain amount of natural gas demand will be secured if natural gas is introduced by fuel change of existing diesel power generators scattered in North Sulawesi.
9.2 Study on LNG transportation method Natural gas demand at three areas in northern part of North Sulawesi (Manado, Bitung and Likupang) was estimated in section 9.1. In the present section, the way of gas transportation to each area is considered.
9.2.1 Example of Japan Here describe example of Japan. Imported LNG, occupying 97% of natural gas used in Japan, is received in the primary receiving terminal, vaporized, calorific value adjusted and odorized for city gas use, then transported to areas of demand. For an area of small demand, low-cost transportation system, like as tank lorry, is applied from the viewpoint of feasibility. In some cases, LNG is transported by coasting liner or railway car, and vaporized and supplied at on-site station (satellite station).
9-10
Fig,9.10 General flow of LNG production and supply in Japan By Shimizu LNG Co., Ltd 9.2.2 Study on North Sulawesi As for North Sulawesi, use of domestic Indonesian natural gas is assumed in the study of natural gas spread project model. If offshore natural gas power plants (Floating Power Plant: FPP）or FSRU are constructed in the eastern Indonesia district, LNG can be transported from one of the plants. However, in the current consideration, natural gas is supposed to be supplied from Bontng-Badak LNG plant which has existing LNG loading facilities. As shown in Table 9.5, potential natural gas demand is not so large, and use of traditional LNG vessels and construction of LNG receiving terminal in North Sulawesi may not be profitable. Then, we focus on ISO container which can transport even small amount of LNG and can also be used as storage. * Details of LNG transportation scheme are shown in Fig.9.11 and Fig.9.12. LNG is transported from Bontng-Badak LNG plant to North Sulawesi by using ISO containers, and the ISO containers are delivered from satellite station to the areas of demand. As to landing, two cases are considered; (1) landing at Manado and Bitung, and (2) landing at only Bitung.
＊ LNG transportation by ISO container has further advantages as below. Use of ISO container is suitable for transportation to small demand areas because of its simplicity and cost-saving merits. Particularly, ISO container can deliver natural gas to users even in areas with no existing gas pipelines, like LPG, and it may highly contribute to the city gas spread in Indonesia.
［Other advantages in LNG transportation by ISO container］ Other than transportation by a dedicated vessel, mixed loading on regular container ships is an effective way to save the cost and can transport LNG to areas
9-11
of very small demand. (In the case of mixed loading, Japanese law about high-pressure gas treatment regulates the placement of an ISO container to be apart from other containers at a certain interval. Regulation in Indonesia needs to be checked.) BOG treatment is basically not necessary for ISO container due to its small capacity (18t for 40ft size), and can be easily operated during transportation. (Vapor-liquid equilibrium is maintained because of cold heat of LNG itself.) After landing, ISO container has no need of refilling and can be transferred to a truck for land transportation.
9-12
（１）Landing at Manado and Bitung
（２）Landing at Bitung only
Fig.9.11 LNG transportation scheme (image)
9-13
Fig.9.12 Introduction of CHP (image)
9.2.2.1 LNG transportation cost to the three areas in North Sulawesi On the assumption of natural gas demand shown in Table 9.5 and transportation scheme mentioned above, LNG transportation cost for the three areas in North Sulawesi is estimated. Costs are calculated in four cases listed in Table 9.7, considering also the capacity of a vessel.
9-14
Table 9.7 Assumption of the cases Case １ Case２ Case３ Case４ LNG demand ・Manado 1,085 BBTU/year ・Bitung 884 BBTU/year ・Likupang 85 BBTU/year Total：2,054 BBTU/year Number of ISO ・Manado 1,241 container/year container ・Bitung 1,011 container/year required ・Likupang 98 container/year Total：2,350 container/year Delivery route 1. Bontang LNG plant – Bontang 1. Bontang LNG plant – Bontang container yard container yard （land transportation） （land transportation） 2. Bontang container yard – 2. 2. Bontang container yard – Bitung container yard Port Manado （marine transportation） （marine transportation） 3. Bitung container yard – 3. Port Manado – Manado demand Manado/Bitung/Likupang area demand area （land transportation） （land transportation） 4. Port Manado – Bitung container yard （marine transportation） 5. Bitung container yard – Bitung/Likupang demand area （land transportation） Ships used Domestic Domestic Domestic Domestic container ship container ship container ship container ship (newly built) (newly built) (newly built) (newly built) 80×40ft ISO 150×40ft ISO 80×40ft ISO 150×40ft ISO container container container container ＊ Adopted ISO container spec is of 40ft-sized. Assuming MMBTU/ton=51, ton/ISO tank=18.
The cost estimation includes also the cases assuming doubled demand in each area of North Sulawesi in future. Results are shown in Table 9.8. Case 1 is most competitive under the current demand condition of Table 9.7, although Case 2 is most competitive if demand doubles.
9-15
Table 9.8 LNG transportation cost to the three areas in North Sulawesi in each case Case 1 Case 2 Case 3 Case 4 Manado ①Ordinary demand 4.79 USD/MMBTU 6.37 USD/MMBTU 4.94 USD/MMBTU 6.45 USD/MMBTU ②Doubled demand 4.67 USD/MMBTU 4.12 USD/MMBTU 4.82 USD/MMBTU 4.20 USD/MMBTU Bitung ①Ordinary demand 4.75 USD/MMBTU 6.33 USD/MMBTU 4.90 USD/MMBTU 6.41 USD/MMBTU ②Doubled demand 4.63 USD/MMBTU 4.08 USD/MMBTU 4.78 USD/MMBTU 4.16 USD/MMBTU Likupang ①Ordinary demand 4.94 USD/MMBTU 6.53 USD/MMBTU 5.09 USD/MMBTU 6.61 USD/MMBTU ②Doubled demand 4.82 USD/MMBTU 4.26 USD/MMBTU 4.97 USD/MMBTU 4.34 USD/MMBTU
［supplementary explanations］ ＊ Bontang container yard is under construction, and will be completed in 2020. ＊ The results show only transport cost. Costs for LNG procurement and filling are not included. ＊ Assumed that ISO containers are transferred to trucks immediately after landing and storage costs are not charged. ＊ ISO container is supplied on lease. Lease fee of each container is 60 USD/day. ＊ It costs USD 10,000 per time to call at a port. ＊ Number of leased container is shown in Table 9.9, assuming an operation that LNG- filled ISO containers are loaded/unloaded and empty containers are collected at every port.
Table 9.9 Number of leased container for each case Case 1 Case 2 Case 3 Case 4 ① Ordinary demand 160 300 160 300 ② Doubled demand 320 300 320 300 ＊ When demand doubles (number of ISO container also doubles), Case 1- and 3-type ship (80×40ft) cannot transport all containers in a year and two container ships are required, then the number of container doubles.
9.2.2.2 Analysis on the result of LNG transportation cost estimation It can be said again that LNG transportation cost to the three areas in North Sulawesi is as Table 9.8, and, Case 1 is most competitive under the current demand condition of Table 9.7, although Case 2 is most competitive if demand doubles.
9-16
Cases 3 and 4 (landing at Manado and Bitung) shows high cost compared to Cases 1 and 2 (landing at only Bitung), because of increased fuel cost due to longer navigation distance for two-port-landing and additional cost for stop at Port Manado. Land transportation cost is similar to that of only-Bitung landing case. In general, transportation cost decreases according to decrease of distance. However, as most transportation companies in North Sulawesi are concentrated to Bitung, transportation cost even in Manado may be similar to that of Bitung-Manado transportation. Therefore, in consideration of natural gas spread project model, landing at only-Bitung is assumed, and, ship type of 80×40ft is suitable under the current demand condition, but 150×40ft is suitable in the case that doubled demand is supposed. If ISO container lease fee decreases, transportation cost can be saved still more. Then, in order to implement the natural gas spread project model, suggestion of scheme to the state government, and cooperation with it, are worth considering. An example of scheme is; the state government possesses all ISO containers required and companies can lease them at low cost than the usual.
9.3 Site Visits 9.3.1 Interview with the state governor of North Sulawesi On December 4th, 2019, in corporation with an Indonesian private company, we had an interview with the state governor of North Sulawesi. We presented natural gas demand (Section 9.1) , LNG transportation scheme (9.2) and natural gas spread project model including concept of advanced energy utilization (discussed below in Section 9.4), and asked a support of the government to investigate feasibility of the model more concretely. The state governor expressed supportive response to our suggestion which presents concrete natural gas users at downstream supply-chain and their demand estimation. He also requested us to submit a list of organizations/facilities/potential users that we want to visit for detailed investigation on model feasibility, and to submit a formal letter on our research execution to the state government.
9-17
Fig.9.13 Interview with the state governor of North Sulawesi
9.3.2 Other investigations Visits to organizations/facilities/potential users for detailed investigation on model feasibility are to be held after a formal support from the state government, as mentioned above. Field investigations during the present study are shown in Table 9.10.
Table 9.10 Schedule of field investigation in North Sulawesi Date Investigations New industrial park project site in Bitung December 4th, 2019 Port Bitung Port Manado December 5th, 2019 A resort hotel in Likupan
9.3.3 New industrial park project site in Bitung We once visited the new industrial park project site in Bitung in 2018. Since then a year has passed, but development of the site cannot be confirmed this time. After getting support of the state government of North Sulawesi, we will ask progress status to the developer of the industrial park. Besides, the high-way connecting Manado and Bitung, which was under construction in 2018, has been completed, but not in service yet.
Fig.9.14 New industrial park project site ＊ A gate and an office exist, but no indication of land forming
9-18
9.3.4 Port Bitung As described in 9.2.2, use of ISO container is assumed in LNG transportation scheme of natural gas spread project model in North Sulawesi, then container yard of Port Bitung was investigated. Gantry cranes and a large container yard were in the port (Fig.9.15).
Fig.9.15 Port Bitung
9.3.5 Port Manado Although only-Bitung landing case can save transportation cost compared to two-port landing at Manado-Bitung (9.2 LNG transportation scheme), yet Port Manado was also visited and checked for its function supposing a use just in case. Function of Port Manado seems to be just a passenger terminal and fishing port, and no function as a cargo terminal. However we, in the investigation in 2018, heard a plan to move the function of Bitung container yard to Manado in the future. Though there is no existing container yard as mentioned above, large spaces are rest in the port (Fig.9.16) and they can be used for ISO container storage.
Fig9.16 Port Manado
9-19
9.3.6 Resort hotel in Likupan As mentioned above, Likupang is a promising area for future resort development, where President Joko Widodo had visited. We visited Paradise Hotel & Resort which is a potential user for natural gas spread project model. The president once visited the hotel. Road improvement in Likupang is remarkable compared to that in 2018, which implies an effect of president’s visit. In addition, a solar generation system that was not in 2018 is constructed adjacent to PLN’s substation in Likupang. We had an interview with the hotel manager of Paradise Hotel & Resort. Results are as follows. - As well as neighbor hotels, electric power of Paradise Hotel & Resort is supplied by PLN power system, and LPG is used for cooking. - As Likupang is distant from the central part of North Sulawesi, unstable supply of LPG for cooking is an issue of the area. - In the future resort developments, new hotels including 5-star hotels will be constructed. - If construction of new energy supply system is suggested to Paradise Hotel & Resort in the future, the manager will explain it to the hotel owner.
Fig.9.17 PLN substation and adjacent solar generation system
9.4 Further Advanced Energy Utilization with reference to Japanese examples As mentioned in 9.3.1, in the present section we consider natural gas spread project model to include the concept of further advanced energy utilization (LNG cold heat utilization to cold storage and ice making) with reference to Japanese examples, in addition to natural gas demand (Section 9.1) and LNG transportation scheme (9.2). Details are described in the following.
9-20
9.4.1 Example of Advanced Energy Utilization in Japan Japanese examples are presented first. Strictly speaking, utilization of CHP assumed in the natural gas demand estimation (9.1) is also advanced energy utilization, but it is not discussed here.
［Energy management system: EMS］ At first, energy management system (EMS) is described. EMS is a system that makes energy (electricity, gas and heat) visible and enables optimized operation of facilities. Energy use condition is grasped and managed properly by using Information and Communication Technology (ICT), and efficient energy use like as energy saving and load equalization can be achieved without troubling hands of a user. A social system of efficient energy use with EMS is called ‘smart community (smart city/town)’. As an example, a Japanese energy-utility company develop smart towns in which houses and apartments are integrated and cloud-type EMS are applied using T-grid system*.
＊ In a T-grid system, a fuel cell is set in each dwelling unit of an apartment, and excessive power is delivered flexibly to other units in short supply. T-grid system enables further energy saving and CO2 reduction, and can considerably reduce purchase volume of external power.
Fig.9.18 Concept of power interchange system in an apartment ‘T-grid system’ By Shizuoka Gas Co., Ltd.
9-21
Fig.9.19 Concept of ‘power interchange’ By Shizuoka Gas Co., Ltd.
［Virtual power plant: VPP］ Virtual power plant (VPP) is described next. Although reduction of greenhouse effect gas is advocated globally, Japanese greenhouse gas emission rate continues increasing after 2011 the Great East Japan Earthquake, and reached the highest rate in 2013. To address the problem, introduction of renewable energy generation represented by solar power and wind power generation is considered intensively. Most of renewable energy generation is, however, affected by natural condition such as weather or temperature and power generation fluctuate considerably, even though electricity requires the balance of supply and demand. VPP is a way to solve the problem. VPP, as its name ‘virtual power plant’, is an integrated and remote-controlled system connecting distributed power facilities, power storage equipment and user’s EMS, under advanced energy management technologies to achieve the best balance of supply and demand, as if one power plant. That is, VPP can summarize distributed controllable power facilities and adjust supply/demand condition, along with renewable energy generation. For such a reason, in Japan, VPP is focused on to play a part in optimizing supply/demand balance efficiently and economically.
9-22
Fig.9.20 VPP (image) By Agency for Natural Resources and Energy ‘Study status of “Energy innovation strategy”’
［LNG cold heat utilization］ Finally cold heat utilization of LNG is described. LNG with -162 ℃ is usually regasified at LNG receiving terminal and supplied to users. In this process, most of cold energy of LNG is released to warm liquid such as sea water and air. Released energy in a regasification process reaches to 48MJ (20,000 kcal) per 1 ton of LNG, then effective utilization of such un-used energy is a current issue. In Japan cold heat utilization of LNG is carried out at the six LNG terminal of major energy -utility companies. Production of industrial gases of liquefied nitrogen/oxygen, use in cold storage and cold heat power generation are performed at several terminals, in addition to use in ethylene plant and plastic crushing. As mentioned, cold heat utilization is classified into several kinds of use. Most popular is utilization to industrial gas, followed by cold heat power generation, use in cold storage, dry ice, and others. Other than cold heat power generation, each utilization is not necessary for LNG terminal or power plant, and is planned according to other industries located in the area of LNG terminal or power plant.
9-23
Fig.9.21 Example of LNG cold heat utilization
9.4.2 Possibility of Advanced Energy Utilization in Indonesia Also in Indonesia, application of EMS and VPP is expected in the future according to the development of ICT. Among the advanced energy utilization described in 9.4.1, LNG cold heat utilization, especially use in cold storage and ice making, is most likely to contribute to solving current issue of Indonesia. Indonesian government shows, in ‘Medium-Term National Development Plan (2015‐2019)’ (RPJMN) established in 2014, that one of the role of the government is contribution to keeping balance of nation. Reduction of regional development disparity and improvement of rural living standard are high priority goals.
9-24
Particularly, improvement of public facility and job creation through promotion of marine products industry in least developed marginal remote islands are positioned as a strategic developing sector which contributes domestic stability. Ministry of Maritime Affairs and Fisheries (KKP), which has jurisdiction over fishery administration of Indonesia, advances a project to build Marine Fishery Center (SKPT) at fifteen remote islands near the border as a high-priority issue during 2015-2019. In addition to improvement of fishery facilities, the project includes advancement of added value of aquatic products and improvement of aquatic product distribution to off-island for economic activation of remote islands. Indonesian government requested Japanese government to improve SKPT and the markets at six islands (Sabang, Natuna, Morotai, Saumlaki, Moa, Biak) which have rich fishing grounds and high potential of fishing ground development and highly rely on marine products industry among the fifteen islands. Today Japan International Cooperation Agency (JICA) promotes a support project for development of fishery sector in remote islands of Indonesia. In such a context, when LNG is supplied to remote islands in eastern Indonesia and LNG cold heat is utilized to cold storage and ice making, it will become possible to distribute frozen marine products which easily go stale without effective preservation method now. Introduction of LNG may significantly contribute to development of marine products industry in the district. Among North Sulawesi, Bitung is a large port designated as PPS. Though there are existing cold storages at Port Bitung, utilization of un-used LNG cold heat, and consequent saving running cost, may lead to further expansion of cold storage and ice making facility.
9.5 Contribution to development of Indonesia through the natural gas spread The effect of the natural gas spread on the area mentioned above is, primarily, reduction of LPG import and saving subsidy for import with the domestic gas spreading. In addition, in a microscopic view, development of marine product industry is expected, and ‘low carbon’, ‘energy saving’ and ‘energy security enhancement’ can be achieved through natural gas introduction, especially through utilization of CHP. In a global trend, greenhouse gas reduction will be recognized as a more important theme for each country. Indonesia also show attitude to address the issue early, and natural gas spread might be helpful for greenhouse gas reduction. In the current situation of Indonesia, number of skilled personnel for development, design, engineering, production, operation and maintenance of CHP are limited. Japanese companies precede the world in the field of gas engine energy optimizing technology,
9-25 then, Japanese companies will be able to differentiate themselves when the technology is introduced to Indonesia. Along with the spread of cogeneration system, design and high-level maintenance technology will be transferred to Indonesia, which may also contribute to local job creation of operators and maintenance staffs for CHP. Natural gas spread project model described here can be applied to other districts than North Sulawesi, according to local conditions. For the development of Indonesia, we wish the concept described in the chapter to be realized in many areas.
9-26
10. STUDY TO IMPROVE FINANCIAL FEASIBILITY OF SMALL SITES Among PLN new power station development plan, the sites with power generation capacity of less than 20MW has been defined as “Small Scale Sites”. The study of the chapter focus on the plan for improving financial feasibility The table below shows - Name of the small scale sites - Planned power generation capacity - Current expected Operation factor and generating power
Table 10.1 –Small Scale Sites- PLN new power station development plan Planned power Expected Expected PLN new power station generation Operation Generating capacity factor Power （Name of small scale sites） (MW) （％） （MW） 1 Tobelo 1 10 18% 1.8 2 Tobelo 2 20 6% 1.2 3 Fak-Fak 10 32% 3.2 4 Bula 10 25% 2.5 5 Bacan 10 21% 2.1 6 Sanana 10 33% 3.3 7 Morotai 10 45% 4.5 8 Kaimana 10 38% 3.8 9 Namlea 10 41% 4.1 10 Saumlaki 10 38% 3.8 11 Dobo 10 43% 4.3 12 Seram 20 29% 5.8 13 Serui 10 37% 3.7 14 Merauke 2 20 37% 7.4 15 Merauke 20 36% 7.2 16 Langgur 20 33% 6.6
LNG will be transported to the LNG Distribution HUB by large LNGC (LNG Carrier) from the domestic LNG liquefaction plant in Indonesia. At the HUB, LNG will be stored in the moored FSU (Floating Storage Unit). The LNG distribution plan to each power generation site is to transport LNG by small LNGC. However, this program requires the berth with enough depth for the small LNGC and the LNG storage facility. For the Small Scale Sites, LNG demand is smaller than that for medium and large scale sites in comparison with the construction cost of berth facility and storage facility. This results the higher ratio of depreciation cost of the facility, which leads higher COE (Cost of Electricity) For improving this disadvantage, the cost reduction study for construction cost of LNG receiving/storage facility has been conducted for Small Scale Sites.
10-1
① Change LNG transportation/storage system to ISO Container. By utilizing small size container vessel or self-propelled barge, LNG loading/unloading can be performed at shallower berth facility, which might be less expensive. ② Instead of building LNG storage tank, ISO Container can be utilized as LNG storage, which can reduce the construction cost of the facility.
To increase the demand of LNG power, high efficiency cogeneration system implementation has been examined. The cogeneration units shall be installed for following facilities and LNG ISO Containers shall be delivered, stored, gasified for power generation, which might improve energy efficiency and expand the LNG users besides power generation. Hotels Hospitals, Shopping malls, Industrial zones, etc.
To improve economic feasibility by such expansion of the LNG utilization, following application might be put on the table.
- Deliver LNG ISO Container to fish can factory, store LNG and gasify for self-power generation and/or boiler fuel. - At the LNG based power station, utilizing cold heat of LNG gasification to cool down the refrigerant, which to be supplied to cold storage facility and /or ice manufacturing factory - For the fuel supply to households as the substitutes of LPG, install gas distribution piping to supply city gas. - As the fuel for medium/small scale shops, facilities and households, distribute LNG small bottle(VGL) - Around the coastal area, where fresh water cannot be obtained for the use of fishery, install small sea water desalination unit to produce fresh water, for which LNG based electric power will be supplied for desalination unit.
Considering above application of LNG energy, the study has been conducted for Morotai site (Morotai island) as one of the example of small scale site. Morotai has the potential of fishery industry development back-upped with rich natural resource of fisheries. The area is one of the 6 islands of the country (i.e. Sabang,Natuna,Morotai,Saumlaki,Moa,
10-2 and Biak). Currently, Japan International Cooperation Agency (JICA) is performing the support projects for the development of fisheries and marine products sector in the remote island of the country.
10.1 Financial Feasibility of Small Scale Power Plant 1) Current status of Morotai Key industry of the region is fisheries industry. Fishing ports are scattered along the coast line. Dense population is only at the city area of Duruba. There are small villages with few hundred houses around the fishing ports. Among these fishing villages, there are two power stations with hybrid power generation, which consists of PV (Photovoltaic) power units and diesel fuel power units with the capacity of few hundred KW. (Wawana & Juanga village) The new gas fuel based power station of PLN is planned to be located south of the island, at the east coast of the peninsular. As the tourism facility, there are few hotels, among which the resort type hotels are at Juanga village west coast of south island and at BuhoBuho village east coast of middle island. At the south-east island,KKP(Kementerian Kelautan dan Perikanan :Ministry of Marine Affairs and Fisheries) planned the SKPT(Sentra Kelautan dan Perikanan Terpadu :Marine & Fisheries industrial) zone, which is under development (SKPT Morotai)
Figure 10.1 Map of Morotai, Location of SKPT
10-3
2) Study of Power Station location, capacity The studied configuration of the plan is; Distribute LNG ISO Containers by small container carrier and/or self-propelled barge. Store containers as LNG storage in the power station site. Re-gasify LNG and supply gas to packaged type GEG (Gas Engine Generator) with approx.1.5MW capacity of each unit. To meet the currently expected power demand of 4.5MW, provide 4 units of 1.5MW packaged type GEG, which can cover the demand with 70% operation factor. ISO container as LNG storage shall be 18 units, among which half of them shall be replaced every 8 days cycle. On top of that, Extra space shall be considered for future increase of these GEG and/or ISO Containers. The site of the power station is selected near SKPT Fishery Industry zone, considering easiness of Container loading/unloading comparing the planned PLN site (Juanga area on the east coast of south peninsular of the island).
Figure 10.2 Development plan of SKPT and power station location (marked on Google Earth)
Planned details of zoning and facility layout of SKPT Morotai is shown below figure. The pier and jetty, which is now under construction, seems suitable for berthing and mooring of small container carrier and/or self-propelled barge and loading/unloading /transportation of ISO containers. In the zone, there exist the cold storage with capacity of 250 tons, and new 2 cold storages with 200 tons each and new ice manufacturing factory with capacity of 10 tons/day are panned.
10-4
Figure 10.3 SKPT Morotai Zone Layout/Facility plan/Current status as of 2018 （Reference）： Buka Rencana/Review dan Penyempurnaan Masterplan dan Bisnisplan PSKPT di Kabupaten Plau Morotai/ BAB06 （SKPT=Sentra Kelautan dan Perikanan Terpadu） （English） Planning Book / Review & improvement Master plan and Business plan for development of SKPT in District of Morotai Island.
10-5
3) Followings are the summary of planned facilities. The plan is based on various assumption and conditions, which need to be surveyed and verified further in details for plan realization. - LNG shall be transported by small container carrier and/or self-propelled barge. Container loading/unloading operation shall be at SKPT jetty every 8 days interval. Containers will be transported by trailer and stored inside the power station as LNG storage.18 containers shall be stored and LNG will be consumed as per demand (expected 9 containers are replaced every 8 days) - LNG re-gasifier will be air heater type. Power generation unit will be 1.5MW x 4 units. - Generated power will be connected / delivered to island grid system through power transmission system. - Refrigerant cooling unit shall be provided utilizing LNG vaporization cold heat. Refrigerant is supplied to the Cold Storage(s) and Ice Manufacturing factory.
Overview of the facility with unit configuration, block flow and conceptual foot print of the power station are shown below.
Overview of Small Scale LNG Distribution Network at Morotai Morotai island Duruba province (population approx. 48,000 ) Power supply and Cold chain application
Power Distribution for 48,000 population 4 Power Units Gas Engine Generator E. Power 1.5 MW unit
Small Scale LNG distribution Terminal 9 Containers to be replaced every 8 days
LNG ISO Container GAS 40' class LNG Vaporazer (Air heater type) LNG ISO Container 40' class 18 Conatiners LNG Storage LNG LNG ISO Container 40' class LNG Heat Exchanger LNG for Cold Chain LNG ISO Container 40' class
(Future Space)
Cold Chain application Option
Refrigerated Storage Refrigerant Supply
Refrigerant Return
Cold Chain application Option
Ice Maker for fishery use Refrigerant Supply
Refrigerant Return
Figure 10.4 Power Station block Flow Diagram
10-6
Morotai Foot Print of LNG Container based Power station (4 GEG Units) Approx. 100m x 100m
Power to Grid
Power Delivery Container access road Yard
Gas Engine Generator
Mainte Access LNG ISO Container Storage road Gas Engine Generator Control House
Office
Gas Engine Generator
Gas Engine Generator
Vaporizer
Container access Refregerant Unit road
to/from Cold Storage and/or Ice Maker
Figure 10.5 Power Station Foot Print concept
4) LNG ISO Containers will be filled at LNG HUB base which might be at one of the middle/Large scale sites.
According to geographical evaluation, Kendari site is assumed to be the LNG HUB. Assumed voyage route of container carrier will be ; Kendari HUB – Morotai – Tobelo – Bacan – Sanana – Kendari HUB Following figure illustrate the assumed voyage route and distance
10-7
Kendari HUB – Morotai – 550 nm(Nautical mile) Morotai – Tobelo – 40 Tobelo – Bacan – 300 Bacan – Sanana – 130 Sanana – Kendari HUB - 230 Figure 10.6 The Voyage route from Kendari LNG HUB (Marked on Google Earth)
To figure out the unit cost of electricity, the total voyage cost will be distributed to each site in proportion to the container number delivered.
5) In accordance with the facility configuration, CAPEX/OPEX have been estimated. COE is improved lower than that of previously evaluated. The element of COE is as follows: (CAPEX) (1)Construction cost of power station - Power Generator(GEG) 1.5MW,4 units - LNG re-gasification unit - ISO Container 18 Units - Power Transmission system - Fire protection, Security system others - Construction cost of power station includes civil,piping, electrical, instrument, etc.
10-8
(2) Cost for jetty is excluded ,since SKPT jetty can be utilized. (3) Cost for cold heat utilization system is excluded.
（OPEX） (1)Transportation cost of LNG ISO Container - Filling cost at LNG HUB - Voyage cost of Container transporter - Container handling cost at SKPT jetty - Transportation cost of trailer between jetty and power station. (2)Operation & maintenance cost of Power station
10.2 Optimal Facility Installation and Operation for Investment Amount This chapter focus on the overall business feasibility, including COE of small scale sites and COE of middle/Large scale sites.
10.2.1 Examination on Possible Amount of Investment Reviewing overall program of PLN power generation development plan, CAPEX/OPEX are estimated for each small scale/middle scale/large scale site. COEs have been compared. Also, overall evaluation has been conducted with assumed site combination. For all 22 site, conceptual facility planning has been conducted for power generation, LNG storage & re-gasification, LNG receiving system, and port facility to figure out total CAPEX/OPEX. For the estimation, voyage cost are calculated and distributed as per LNG demand/consumption of each site in accordance with the assumed LNG logistics plan as follows. For a unique site Timika, which is categorized as middle scale site, the access of small LNG carrier seemed difficult, however further investigation has resulted that small LNGC might approach to the river mouth area. This improves the plan to be included in the milk run route as follows. At Timika, LNG ISO Containers will be filled and delivered to small scale sites.
10-9
(1)■Kendari HUB - Makassar - Kalsel –Kendari HUB (2)■Kendari HUB – Halmahera Weda/Buli bay – Ternate (3)■Ternate – Ambon – Timika – Kendari HUB Oveall voyage path will be approx..4,500 nm, 1 cycle of voyage will be 18 days. Between voyage route(1) and (2),LNG will be additionally loaded at LNG HUB Figure 10.7 LNG Distribution Route (Middle/Large scale Site Route, Small LNG Carrier)
■Kendari HUB – Morotai – Tobelo – Bacan – Sanana – Kendari HUB Oveall voyage path will be approx..1,250 nm, 1 cycle of voyage will be 8 days. Figure 10.8 LNG Distribution Route (Small Scale Site route (1) Container Carrier or Self-propelled barge)
10-10
■Kendari HUB – Serui – Fak Fak – Bula – Seram –Kendari HUB Oveall voyage path will be approx..2,400 nm, 1 cycle of voyage will be 12 days. Figure 10.9 LNG Distribution Route (Small Scale Site route (2) Container Carrier or Self-propelled barge)
■Timika – Merauke – Saumlaki – Langgur – Dobo – Kaimana - Timika Oveall voyage path will be approx..1,900 nm, 1 cycle of voyage will be 11 days. Figure 10.10 LNG Distribution Route (Small Scale Site route (3) Container Carrier or Self-propelled barge)
10-11
The power demand of middle and large scale site are comparably much bigger than that of small scale site, thus it dominates overall COE. It has been evaluated and confirmed that the business shall be well feasible
10.2.2 Small Power Plant Facility Installation This chapter focus on the application of LNG based power generation and other systems to the small scale site (Morotai as an example) ,for creating/expanding LNG demand and improving economic feasibility
1) Power Generation facility For the new power stations, implement packaged GEG, which can be installed and can commence operation in a short time. If there exists power generation unit (Diesel fuel base),modify and/or replace with gas fueled generators. In any of these cases, LNG ISO Containers shall be stored at power station and supply gas to generator(s). For the future increase of the power demand, it can be covered by additional power generation package(s) and increase of ISO LNG Container supply. (Case at Morotai) SKPT zone New Power Station 6 MW Wawama Village Existing Power Station(Fuel change) 300 KW Juanga Village Existing Power Station(Fuel change) 600 KW
2) Application of cold heat At the new power station, refrigerant cooler shall be installed upstream of LNG re-gasifier and refrigerant will be supplied to the cold storage(s) for fishery industry and /or ice manufacturing factory, which are planned to be installed nearby. If the existing power station changes the fuel to LNG based, similar cooler can be applied and refrigerant will be supplied to mini-scale ice manufacturing factory for fishery use. (Case at Morotai) SKPT zone New Cold Storage 400ton SKPT zone New Ice Manufacturing Factory 6 t/day
3) Co-Generation Apply co-generation system for relatively large facility, such as existing resort hotels and/or newly developed potential resort , then supply gas based on LNG ISO Container to in-house power generation. Co-generation system realize higher
10-12
energy efficiency for HVAC or hot water supply system. (Case at Morotai) Juanga area Existing resort hotel BuhoBuho area Existing resort hotel
4) City gas As a pilot project, install gas piping network in the small village/town for city gas supply, to where part of re-gasified gas for small scale power generation and/or co-generation system can be delivered . This program can accelerate the LNG use as a substitution of LPG gas for the house hold fuel. (Case at Morotai) Wawama Village (small scale power generatioin 300KW) approx.350 Houses(assumed population 2,000) Juanga Village (small scale power generatioin 600KW) approx.250 Houses(assumed population 1,500) Buhobuho area village near existing resort hotel (in-house power generatioin, co-generation) approx.300 Houses(assumed population 1,800)
5) Distribution business of small LNG bottle(VGL) Fill LNG from LNG ISO Container to small LNG bottle(VGL) and distribute to the consumers of LPG bottle. This program can accelerate the LNG use as a substitution of LPG gas for the middle and small scale facilities fuel. Build LNG filling station to VGL and distribute to each consumer. (Case at Morotai) SKPT zone Install filling station in the new power station
6) The economic effect by the application of LNG based power generation facility and other system In the region currently low demand with potential of higher power demand, the program discussed herein shall have the advantage that the project realization is very fast ,since the required initial investment is comparably small with minimum necessary base installation. Furthermore, the facility can be expanded easily as per demand increment. Besides power generation, other application might contribute to the local industries’ initiative and growth, which provide good economic effect.
10-13
10.2.3 Operation of Small Power Plant The study has been conducted for the work demarcation of Power Generation, LNG Container Distribution, other applicable LNG application. This program contains various element and depends on the local specifics, thus individual evaluation must be required for each site.
Table 10.2 List of major Business items and assets
No Business of small scale site Business contents Asset LNG Storage･LNG Regas･ 1 Power Generation Power Generation･Power Supply･ Power Station･ISO Container Power transmission LNG Container Loading/Unloading (Port)･ 2 Container Carrier Transportation（Ocean） Ocean transportation LNG Container Loading/Unloading (Site)･ 3 Truck Transportation（In-land） In-land Transportation LNG receiving･LNG Storage･ FSU･HUB Facility･Marine House･ 4 LNG HUB LNG Delivery･Gas Supply subsea P/L･subsea Cable 5 LNG Container Filling LNG Filling Filling Station Cooling Refrigerant･ Refrigerant cooler･ 6 LNG regas cold heat supply Refrigerant Supply Refrigerant piping 7 Cold Storage Freezing Storage Cold Storage･Refrigerator
8 Ice Manufacturing Factory Ice manufacturing･Ice delivery Ice manufacturing machine
9 Fish Can factory Fish can production･LNG Regs Boiler･ISO Container Power Generation/Co-generation･ 10 Co-generation Unit Unit･ISO Container LNG Regas 11 City gas supply Gas supply Gas Supply piping
12 VGL Distribution VGL filling･VGL delivery VGL
As an example, the table below shows typical work split as a reference
10-14
Table 10.3 Typical work split by business body
No Business of small scale site Business contents Business Body (Example) LNG Storage･LNG Regas･ 1 Power Generation Power Generation･Power Supply･ Power Company(i.e.PLN) Power transmission LNG Container Loading/Unloading (Port)･ 2 LNG Distribution Company Transportation（Ocean） Ocean transportation LNG Container Loading/Unloading (Site)･ 3 LNG Distribution Company Transportation（In-land） In-land Transportation LNG receiving･LNG Storage･ 4 LNG HUB LNG Distribution Company LNG Delivery･Gas Supply 5 LNG Container Filling LNG Filling LNG Distribution Company Cooling Refrigerant･ 6 LNG regas cold heat supply Power Company(i.e.PLN) Refrigerant Supply 7 Cold Storage Freezing Storage Cold storage company 8 Ice Manufacturing Factory Ice manufacturing･Ice delivery Ice Manufacturer 9 Fish Can factory Fish can production･LNG Regs Fish can company Power Generation/Co-generation･ 10 Co-generation Unit Business body such as Hotel LNG Regas 11 City gas supply Gas supply Gas company 12 VGL Distribution VGL filling･VGL delivery Gas company
Among above table, LNG distribution company might be the key for the business, that shall take the lead of the business and promote the expansion of LNG demand and manage as a key player. Moreover, to realize the program, it is inevitable that local governments understands and cooperate to this, for which the establishment of rule and regulation is required.
10-15
11. REPORTING SESSION FOR RELEVANT INDONESIAN STAKEHOLDERS
Mitsubishi Heavy Industries, Ltd., Shizuoka Gas Co., Ltd. and Marubeni Corporation, as members of the Program Mission Team (PMT), which is a cooperative framework between Japan and Indonesia reported the results of feasibility study to the Japan-Indonesia Joint Working Group.
11-1
12. SOCIAL AND ENVIRONMENTAL EFFECTS INCL. CO2 REDUCTION In September 2016, the NDC(Nationally Determined Contribution) was submitted for the first time in the country to address climate change. According to the plan, the target is to reduce emissions by 29% (Unconditional, CM1) and 41% (conditional, CM2) of BAU by 2030. Based on the "National Energy Policy (Cabinet Order No. 79/2014)" enacted in 2014, the following energy mix (primary energy base) has been set up for reduction measures in the energy sector. ・New and renewable energy: at least 23% in 2025 and at least 31% in 2050 ・Oil: Less than 25% in 2025, less than 20% in 2050 ・Coal: 30% minimum in 2025, 25% minimum in 2050 ・Gas: 22% minimum in 2025, 24% minimum in 2050 In addition, BAU and each countermeasure scenario (Conditional, Unconditional) are assumed in the NDC Annex. Although there is no mention of gas-fired power generation as a possible measure, measures related to the gas supply chain are indicated. The development of gas supply networks and CNG stations is a measure to replace the use of oil and petroleum products currently in use(Gasoline and diesel fuel), and is considered to be positioned as a concrete measure to control oil consumption on a primary energy basis in the above-mentioned long-term target. For the gas supply chain development, which is not implemented as BAU, 100% is achieved under both conditional(CM1) and unconditional(CM2) mitigation scenarios. This project will contribute significantly to the construction of a gas supply chain and will contribute to long-term climate change countermeasures. Offshore natural gas power plants will be installed mainly on the islands of the country. The main power supply in the islands is by diesel power generation, and the CO2 emission reduction effect by replacing it with natural gas power generation was estimated. CO2 emissions were reduced by approximately 2.14 million tons/year in 2025. This is equivalent to about 5.6% of the government's target of reducing CO2 emissions in the energy and transportation sectors by 38 million tons. In addition, regarding air pollutants such as SO2, NOx, and soot and dust, the country has established national environmental standards based on the "Cabinet Order on the Prevention of Air Pollution(1999)". Air pollutants emitted from thermal power plants are specified in "Environmental Minister's Regulations Concerning Emission Standards from Fixed Sources in the Activities of Thermal Power Plants (2008)". The introduction of offshore natural gas power plants will replace diesel power generation on islands with gas-fired power plants, contributing to the reduction of SO2, NOx, and soot and dust in the country.
12-1
13. STUDY ON ADVANTAGE OF JAPANESE COMPANIES, BENEFITS TO JAPAN While Japanese companies have a comprehensive range of technical know-how, particularly in LNG infrastructure, there are no such companies overseas. Therefore, this project is a field in which the comprehensive technological capabilities of Japanese companies can be fully utilized, and it is highly expected that this project will be developed laterally based on this feasibility study. The implementation of this project is expected to result in the export of gas supply infrastructure and floating power generation facilities, as well as related facilities such as cold chains, industrial power sources, and cogeneration systems for civil use in the Indonesian islands. In our country, the stabilization of energy prices is also expected through the enhancement of energy security in the country.
13-1
14. CONCLUSION In this FS, the feasibility study was carried out on the installation of a small LNG carrier and a virtual pipeline using FSRU for LNG marine transportation in the eastern islands of the country, and the installation of a floating type gas thermal power generation facility at sea to avoid the problem of land expropriation (LDPP: LNG Distribution & Power Plant). As a result of the survey, the LDPP project has a good affinity with the Mid-term Development Plan (RPJMN), the Power Master Plan (RUKN), and the PLN Plan (RUPTL). It may also be included in the National Strategic Infrastructure Projects (PSN) list. Although not yet included in the Marine Spatial Planning (RTRL) and Coastal and Islands Zoning Planning (RZWP3K), the licensing process can be accelerated if it is considered a PSN project. As the Indonesian Government indicated, the main objective of this project is to benefit eastern Indonesia, especially areas with low electrification rates. In this study, this area is classified as segment B, and in contrast, sites with relatively large power demand are classified as segment A. A 3-in-1 HUB, a small LNG carrier and an ISO tank delivery system are recommended to deliver gas to Segment B. The infrastructure bridges the gap between upstream gas supply and downstream power generation. It is therefore referred to as a mid-stream infrastructure. The midstream infrastructure provides significant benefits to the country. To reduce power generation cost(COE) by promoting gas conversion from diesel and to improve trade deficit caused by excess import of diesel. A stable supply of electricity contributes to promoting economic growth. The supply of LNG VGL will also contribute to the development of the tourism sector by supporting the fisheries sector by making effective use of the cold heat generated during regasification. Economic benefits are adequate (Economic internal rate of return using a provisional business scope of 16%) and deserve priority for public works.
14-1
Appendix 3-1 Related PPP Regulations Framework in Indonesia
Appendix 1: Related PPP Regulations Framework in Indonesia
Appendix 8-1 Typical facility BLOCK FLOW DIAGRAM of HUB
Typical facility BLOCK FLOW DIAGRAM of HUB Block Flow Diagram HUB
(LNG-Carrier) (Small LNGC)
Mooring Jetty LNG Carrier/Small LNGC side FSU Support Platform Trestle
LNG transfer piping Re-Gas Module (LNGC to FSU)/ (FSU to Small LNGC) BOG Booster Compressor LNG transfer piping
(FSU to Re-gas Module) BOG from FSU Gas Engine Power Generator Power to FSU Frequency Converter Power from Onshore Power Station Mooring Jetty FSU side
FSU
135,000M3 Power Station(by PLN) Gas supply piping to shore Gas supply piping to Power Station Gas supply to FPP
Power transmmission cable to shore
FPP-GTCC Mooring Jetty(s) Future
Power transmmission system
FPP-GTCC(s) Power connection to grid
Power Grid
Appendix 8-2 Current overview of large-scale LNG carrier
Appendix 1
Appendix 1.1 Current overview of large-scale LNG carrier The number of large-scale LNG carriers (over 40,000m3) as of the end of 2018 is 525 (110 on order), which increased along with the increase of LNG demand. Large-scale LNG carriers are used for large-volume transportation from LNG export terminal such as Tangguh LNG terminal. Large-scale LNG carriers has been achieved remarkable technical development in terms of tank type and propulsion system, which creates diversity of those systems. That is why LNG carrier constructed in old-days is inferior to LNG carrier constructed recently in fuel efficiency, so it is becoming popular that those aged carrier are re-used by modification into FSU.
Appendix 1.2 Tank types of large-scale LNG carrier Tank type of large-scale LNG carrier is refrigerated tank, which is mainly divided into Membrane type and Moss type. Membrane type is adopted by 68% of total LNG carriers. Inside of Membrane tank is covered by thin stainless. Because of sloshing (shakes of cargo inside tanks), there is a loading limitation for Membrane type. Moss type is self-stand and spherical tank made of aluminum alloy, which has no loading limitation since it is not affected by sloshing. Therefore, moss-typed LNG carrier is preferable for FSU. Despite heat treatment on both Membrane type and Moss type, boil off gas is generated due to natural heat input. The Boil-Off Rate of old LNG carriers is about 0.15% / day, but the heat insulation performance has improved in recent years, and the Boil-Off Rate of new LNG carriers is about 0.08% / day.
1
Picture 11. Composition ratio by tank type
Source IGU 2019 World LNG Report
Appendix 1.3 Propulsion system of large-scale LNG carrier Fuel efficiency of LNG carrier propulsion systems has been greatly improved by technological innovation. Until the 1990s, steam turbines (Steam Turbine) were the mainstream propulsion system for LNG carriers, but from the 2000s, dual-fuel diesel engine electric propulsion (DFDE) began to spread, and recently low-speed diesel dual-fuel engines (High pressure ME-GI and low pressure X-DF) are becoming mainstream.
Table 10. Propulsion system of large-scale LNG carrier Propulsion system Description Steam Turbine The steam turbine is moved by the co-firing boiler, and the propeller shaft is driven by the reduction gear. DFDE Electric power is supplied to the electric motor from a diesel generator which can burn diesel oil and gas, and the propeller shaft is driven by the reduction gear. TFDF Electric power is supplied to the electric motor from a diesel generator which can burn heavy fuel oil, diesel oil and gas, and the propeller shaft is driven by the reduction gear. Diesel engine with Large low-speed diesel engine. Since the boil-off gas is re-liquefaction equipment re-liquefied by the re-liquefaction unit, the gas is not (SSD) used as fuel.
2
Reheated steam turbine Improves fuel efficiency of conventional steam turbine (RST) engines STaGE System combining UST and DFDE Low speed diesel dual fuel A large low-speed diesel engine capable of burning heavy engine (high pressure) fuel oil and gas, and directly drives the propeller shaft. (ME-GI) Inject gas combustion at high pressure. Low speed diesel dual fuel A large low-speed diesel engine capable of burning heavy engine (low pressure) fuel oil and gas, and directly drives the propeller shaft. (X-DF) Inject gas combustion at low pressure.
Table 12. Composition ratio by propulsion system
Source IGU 2019 World LNG Report
Table 11. comparison sheet of fuel efficiency by propulsion type
Source IGU 2019 World LNG Report
3
Table 12. Pictures of large-scale LNG carriers
Vessel Name Arctic Voyager Tangguh Jaya Patris Tank 142,930 m3 154,810 m3 173,400 m3 Capacity Tank Type Moss Type Moss Type Membrane
Propulsion ST DFDE ME-GI
System Shipyard Kawasaki Heavy Samsung Heavy Industries Daewoo Shipbuilding & Industries, Ltd Marine Engineering Co., Ltd LOA 289.50 m 285.101 m 294.90 m beam 48.40 m 43.40 m 46.40 m Gross Ton 120,236 t 101,158 t 114,758 t Source Kawasaki Kisen Kaisha
4