Gas Development Master PlanOverview of the GDMP Model

Capacity Building Workshop Bali, 1-2 July 2013

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Presentation Outline• Introducing components of the GDMP Model:

– Demand and Supply Scenarios (DASS)– Transport Infrastructure Model (TIM)

• Demand and Supply Scenarios (DASS) overview:– Objective and key questions– Key outputs

• Transport Infrastructure Model (TIM) overview:– Objective and key questions– Key outputs

• Key Results from the GDMP Model

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Typical phases of a gas producing country• Medium and long term planning perspective• Economic cost of gas is (at least) current production cost +

component (depletion premium) to reflect long run cost of substitute fuel (backstop fuel)

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Changing perspectives …

• “Looks good”

• “OK so far”

• “Oh dear”

• “I hope we made good use of that gas”

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The GDMP modelling framework

• 2 key task areaso … optimizing the expansion of gas supply and transmission

infrastructure in the medium to long termo … policy framework for supporting long-term gas sector

development

• 2 timeframeso 20 years (2040) | 50 years (2070)

• 2 methodologieso Scenarios | Least cost optimisation

• 2 modelso DASS | TIM

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Components of the GDMP Model

DASS TIM

Demand scenarios

Supply scenarios

Export scenarios

Price scenarios

Optimisation for infrastructure

Unmet demand

Excess supply

Infrastructure costs

Adjusted export

Revenue calculation

Results

New infrastructure to meet domestic

demand

Cost of new infrastructure

Government revenues

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Demand and Supply Scenarios (DASS) – OverviewINPUT DATA

Supply input sheet

Demand input sheet

Global parameter sheet

CALCULATION

CONTROL PANEL

Demand calculation sheet

Supply calculation sheet

OUTPUTS

Demand by region and by sector

Annual production by region

TIMSupply-demand graph (initial)

SCENARIOS

Input from TIM

PSC terms input sheet

Adjustments sheet

Revenue calculation sheet

Supply-demand graph (adjusted)

Government revenue

Price input sheet

Price calculation sheet

Export input sheet

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Objective of DASS and key questionsKey issues: selecting parameters to simulate different demand scenarios, different policy options, and different price scenarios.

Objective of DASS: 1. Estimate domestic demand, export, and supply projections up to 2070 based

on selected scenario parameters2. Calculate estimated government revenue based on selected scenario and

cost of selected infrastructure (from TIM)

Key questions:• What are the factors and how will they effect demand and export?• How will price of gas (domestic and export) change over time?• What are the policies that will effect demand?• How are these policies effect demand?• How will government revenue be effected by the different demand scenarios?• How will the cost of infrastructure (from TIM) effect government revenue?

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Key outputs of DASSInitial output projections• Domestic demand projections for major industries, electricity generation, domestic distribution (households and small commercial), and transport by region• Export projections based on existing contracted volumes• Supply projections based on production volumes of each region

Adjusted outputs based on results from TIM• Estimated government revenue based on selected demand and supply scenario and cost of new infrastructure from TIM• New demand and supply balance

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DASS initial outputs: demand and supply projections

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Transport Infrastructure Model Overview

DASS inputs

INPUT DATA

Demand data

Transport costs used in minimisation

CONTROL PANEL

RESULTS

Infrastructure cost and timing requirements by region

SCENARIOS

Supply data

Export data

Connection Concepts

Run minimisation

Interregional LNG and pipeline flows

S/D balances, exports, and unmet demand by region

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Key issue for Gas Infrastructure Policy: supply centres removed from major demand centres

Objective of TIM: identify set of least cost infrastructure options to balance supply and demand across regions until 2040

Key questions • What is the last cost infrastructure portfolio to balance regional supply and

demand?• What are optimized interregional LNG and pipeline flows?• What are the liquefaction, regasification and interregional pipeline capacity

requirements in each region? • What is the volume of unmet demand/imports in each region?• What is volume of excess supply, i.e. gas not consumed domestically or

exported? • What is the cost of delivered gas in each region?

Objective of TIM and key questions

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Key outputs of TIMInfrastructure planning• Liquefaction, regasification and pipeline capacity needed to supply gas into each region• Optimized pipeline and LNG flows across regions• Earliest year gas transport infrastructure in each region is needed

Export and production policy• Level of unmet demand, i.e. domestic demand that cannot be covered by domestic production• Volume of excess production, i.e. scheduled production that is neither exported nor domestically consumed

Investment requirements• Total cost of infrastructure requirements to balance supply and demand

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Output: Regional S/D balances, unmet demand, exports and interregional flows

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Output: Interregional flows by connection concept

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Output: Costs, capacity requirements and throughputs

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Key results of the GDMP Model

Infrastructure planning• List of infrastructure needed to meet domestic demand, earliest year needed and cost of infrastructure• Adjusted demand-supply balance

Government revenue• Estimated government revenue based on selected demand and supply scenario and cost of new infrastructure from TIM

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GDMP Model Key Results – list of infrastructure plan

Infrastructure plan

Infrastructure/location Type Existing capacityAdditional capacity

needed Total Cost Unit costBcf/y Bcf/y million US$ $/mcf

C. Java - W. Java PL Pipeline - 900 457 0.1 Eastern Kalimantan- C. Java PL Pipeline - 600 3,735 1.0 Riau islands Liquefaction Liquefaction Plant - 300 11,124 7.7 East Kalimantan Liquefaction Liquefaction Plant 1,000 - 14 0.0 Papua Liquefaction Liquefaction Plant 375 300 10,539 1.9 West Java Regasification Regasification Terminal 150 700 3,927 1.0 East Java and Bali Regasification Regasification Terminal - 900 4,882 1.7 E. Java- C. Java PL Pipeline - 80 264 3.1 Southern Moluccas Liquefaction Liquefaction Plant - 500 20,682 13.2 Riau-E. Kalimantan PL Pipeline - 400 2,654 3.3 Central Sulawesi Liquefaction Liquefaction Plant 100 10 412 1.9 Nad Liquefaction Liquefaction Plant 590 - 8 0.0 SSWJ I&II Pipeline 360 - 968 0.7 C. Sulawesi-South Sulawesi PL Pipeline - 30 432 45.2 Riau-Central Sumatra Pipeline - 1 485 14,696.0 Sumatra PL Pipeline 160 - 235 48,716

Which locations are being connected by the new infrastructure

What is the connection types

If it is an existing infrastructure, what is the existing capacity What is the

additional capacity needed

What is the total cost and unit cost to build the additional capacity

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GDMP Model Key Results – new demand supply balance

Grey area shows excess supply from this region

After running TIM, excess supply is now transferred (purple bars) to other region(s)

TIM only runs to 2040

If transfers exceed production, could mean that this region imports gas and then transfer to other region(s)

Example from Central and South Sumatera

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GDMP Model Key Results – Estimated government revenue and economic value

Discounted costs, to 2050

Undiscounted costs, to 2070 – very large unmet demand (depends on scenario)