Day 2 Tuesday 16 October 2007 Session 6: Coal Supply Outlook

Speech 6 Indonesia
Indonesian Coal Development

Mr. Hadi Nursarya Head of Affiliation Division Head Agency for Research and Development Ministry of Energy and Mineral Resources (MEMR) Indonesia

COAL DEVELOPMENTS IN INDONESIA

Agency of R & D For Energy and Mineral Resources Ministry of Energy and Mineral Resources

Xian, PRC October 15 17, 2007

OUTLINE
1. BACKGROUND - Energy Resources - Targeted Energy Mix by 2025 2. Coal Mining Status (Coal Deposit, Mining Contractor, Production and Policy) 4. New Coal Power Plant (Fast track 10,000MW) 5. Coal Utilization R&D 6. Concluding remark

TYPE OF FOSSIL ENERGY

Oil Gas CBM (Gas) Coal

RESOURCES
86.9 billion bbl 384.7 TSCF 400 TSCF 61.3 billion Ton

RESERVES
9.1 185.8 19,3

PRODUCTION
387 million bbl 2.95 TSCF 132 Million Ton

R/P (YEARS)
23 62 146

NON FOSSIL ENERGY

Hydro Geothermal Mini/Micro hydro Biomass Solar Wind Uranium

RESOURCES
845 Million BOE 219 Million BOE 458.75 MW

EQUIVALENT
75,670 MW 27,000 MW 458.75 MW 49,810 MW 4.8 kWh/m2/day 9,287 MW

UTILIZATION
6,851,000 MWh 2,593,500 MWh

INSTALLED CAPACITY
4,200 MW 807 MW 54 MW 302.4 MW 5 MW 0.5 MW

24.112 Tons*

3 GW 3

*) only in Kalan region, West Kalimantan

2005
Hydro Geothermal, 3.11% 1.32% Gas , 28.57% Oil 51.66% Coal, 15.34% Gas , 30%

2025

Oil, 20 % Others, 17% Coal, 33%

LEGAL ASPECT Presidential Decree No. 5/ 2006 Presidential Instruction No. 2/2006

Bio-fuels, 5% Geothermal, 5% Solar, Wind, etc , 5% Coal liquid, 2%

Others

Sub Bituminous 26.7% Bituminous 14.3%

Anthracite 0.3% Lignite 58.7%

1.58% 28.37%
KALIMANTAN 4.07%

7.58%
SU M AT

40.13%

Resources : 61.3 billion tons LRC : 70 %

ER A
JAWA

17.7%

SULAWESI PAPUA

10.000 MW

STATUS OF COAL CONTRACT OF WORK (CCoW) (December 2006)

Stage
Type of Enterprises GEN. I (1981-1990) GEN. II (1994) GEN. III (1997-2000) Total GS 1 1 EXPL 10 10 FS 2 22 24 CONS 7 7 PROD 10 10 16 36 Sub Total 10 12 56 78
Termination

6 60 66

in million tons

2006
1. Electricity 2. Cement
**)

2010
65.0

2015
93.0

2020
103.0

2025
123.0

*)

35.5

7.0

10.0

11.0

13.0

17.0

3. Metallurgy Industry and Pulp/Paper 4. Small Industries 5. UBC 6. Liquefaction Total

3.0

7.0

9.0

11.0

12.0

2.5 48.0

5.0 3.0 90.0

7.0 7.0 3.0 130.0

9.0 20.0 14.0 170.0

10.0 30.0 28.0 220.0

*) Growth of 2 % after 2010 (Data compilation of KBN and PLN, 2006) **) Average growth of 12 % after 2010 (Data compilation of KBN and Indonesia Cement Association, 2005) 8

Some Important Issues

In the year 2006/2007, a number of uncertainties continue to affect the level of new investment in the mining industry regional autonomy, delay in finalization of new mining law, illegal mining, environment, fiscal policy, and over lapping with forestry law.

BASIC PRINCIPLE OF NEW LAW OF MINERAL AND COAL MINING

Clarification of Central Government, Provincial and District Authority; Establishing of Mining Zone; Mining Estate Establishing State Reserve for the special national interest. Mining license system, no more direct contract applied between mining company and the government; Foreign mining company may have an agreement with the State Owned Mining Company/Representative Agency to develop state reserve; Simplification of Licensing Permit; Exploration and Exploitation; Determination of mining areas through bidding and self reservation; Community development is focused for local people welfare; Processing and refinery producing metal must be establish in Indonesia; The Existing of License Authority and Agreement will be honored.

FAST TRACK 10,000 MW PROGRAM

Objective: To replace Oil Based Power Plants with Coal Power Plan and to deal with electricity crises Expected Impacts: Reduce Domestic Oil Consumption Reduce Fuel Cost for Power Generation Reduce Electricity Production Cost Reduce Subsidy Level Overcome the Electricity Shortages
11

LOCATIONS OF COAL PP PROJECTS

(BASED ON THE ANNEX OF PERPRES NO.71/2006)
PLTU Meulaboh 2x100 MW B-Aceh PLTU Sibolga Baru 2x100 MW PLTU Bengkalis 2x7 MW PLTU Medan Baru 2x100 MW Medan PLTU Selat Panjang 2x5 MW PLTU Pontianak 2x25 MW PLTU Singkawang 2x50 MW

PLTU Sulut Baru 2x25 MW PLTU Amurang Baru 2x25 MW Tarakan Minahasa PLTU Ternate Baru 2x7 MW

PLTU Jayapura Baru 2x10 MW

PLTU Tanjung Balai Karimun Baru 2x7 MW PLTU Sumbar Pesisir Selatan 2x100 MW

PLTU Sampit Baru 2x7 MW

Pontianak PLTU Bangka Baru 2x25 MW PLTU Air Anyer 2x10 MW PLTU Mantung 2x10 MW Bengkulu Padang

Gorontalo Kotamobagu Palu Sorong Serui Ambon PLTU Gorontalo Baru 2x25 MW PLTU Kendari 2x10 MW PLTU Bone 2x50 MW Kupang PLTU Ambon Baru 2x7 MW Jayapur a

Bangka Banjarmasin PLTU Palangkaraya 2x65 MW

Mahaka m

PLTU Belitung Baru 2x15 MW PLTU Tarahan Baru 2x100 MW PLTU Suralaya Baru PLTU Labuan 2x660 MW 1x300 MW PLTU Teluk Naga 2x300 MW PLTU Jabar Selatan 1x300 MW PLTU Tj Jati Baru 1x600 MW

SumselLampung PLTU Jabar Utara 2x300 MW

PLTU Asam-asam 2x65 MW

PLTU Rembang 2x300 MW PLTU Jatim Selatan 2x300 MW PLTU Lombok Baru 2x25 MW

Bima

Sumbawa

PLTU Timika 2x7 MW

PLTU Paiton Baru PLTU Bima 2x660 MW 2x7 MW

PLTU Ende 2x7 MW

PLTU Kupang Baru 2x15 MW

12 12

Coal Research and Development

1. Upgraded Brown Coal (UBC) 2. Coal Liquefaction 3. Dual Fuel Power Generator

UPGRADED BROWN COAL

Characteristic of UBC Process
UBC process reduces moisture content of LRC (up to 80%) or increases CV of LRC (<5,000 kcal/kg) up to 6,000 kcal/kg (similar to HRC) based on slurry dewatering process Feed Stabilizer (Black box)
Coal Fired Power Generation Industry

UBC

Premium Coal (added value)

Export
14

STATUS OF 5 ton/day UBC Plant

Goal: To gather engineering data for construction commercial scale UBC plant Results: Various of LRCs have been tested successfully in the plant Performance of UBC process was successfully improved and engineering data was collected to be used for construction of semi commercial scale In Progress: Construction of 1,000 ton/day coal feed or 600 ton/day product UBC semi commercial plant in South Kalimantan
15

Goal

Construction of Commercial Plant, 27,000 bbl/day

Results

o Pre-feasibility study (2002) of commercial plant construction in

3 locations (Cost US$ 29/bbl, 1 ton raw coal produces 1,8 bbl oil o GOI has issued the Presidential Decree No. 5/2006 and Presidential Instruction No. 2/2006 related to the construction of coal to liquid

In Progress

Engineering Design of 1 ton/day Process Supporting Unite (PSU)

Up dating F/S data Establishing Coal Liquefaction Implementation Body

16

2005
2009

2010
2013

2015

2020

2025

Brown Coal Liquefaction (BCL) Process

13,500 bbl/day Semi-Commercial PlantInvestment: $1.3billion

2014

27,000 bbl/day 1st Commercial Plant Total Investment:$2.1billion

2017

Additional13,500 bbl/day Plant Investment: $0.8billion 2018 27,000 bbl/day Commercial Plant X 6 Units Total Investment: $9.6 billion

Total Synthetic Oil

13,500 bbl/day

27,000 bbl/day

189,000 bbl/day

Oil Demand
bbl/day

1.12

1.36

1.67

2.04

2.49 million 35 million ton/year 7.59%

Total Coal Demand Share of Synthetic Oil

2.5 million 5 million 0.74% 1.27%

17

Coal Gasification For Dual Fuel Power Generator

4 3 1 Gasifier 2 Tar Quenching 3 Wet ESP 2 1

4 Diesel Tank Dual-fuel Power 5 Generator 5

 Coal is projected to be the main energy source in Indonesia by the year 2025 The Coming Mineral and Coal Mining Law hopefully will create a better mining development in Indonesia in terms of good investment climate, clear of authority among Central Government, adopted the sustainable development principal and giving the maximum for the people welfare. R & D on coal as well as crash programs of coal fired power plant have been conducted to increase of coal for domestic use and to decrease dependency on oil.

19

20