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Stranded gas to Stranded markets

Peter Cockcroft
Peter Cockcroft

I was honored to be asked to be the Chairman of the Indonesian Gas Summit in Jakarta, during March, 2016. Thus I thought I should give a summary of my long history in the natural gas and LNG sector

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Stranded Gas to Stranded Markets A personal journey Peter Cockcroft
My first time in Jakarta - 1965! 2 I stayed at the Intercon Hotel (later called the Hotel Indonesia) with my father, who was writing a book about Indonesia from October December 1965
3
Arun LNG 4 My role: young guy with TI-59, so I could do some of the commercial computations for Pertamina for Train 4
KE-5 Gas Field, East Java Sea pipeline to Gresik (1987) 5 Price discussions took 3 meetings My role: VP Engineering and lead negotiator, Kodeco
A crazy idea (1992) 6 We had a gas discovery in the OK Block that was far from existing pipeline but close to the railway to Palembang. It didnt go ahead because of reserves uncertainty My role: Operations Manager, OK Block JOB
Sengkang gas to power project (1994) 7 Gas price meetings 1 Well organized IPP process by DGEED in Jakarta My role: President, Energy Equity Asia
Lematang (Harimau Field) gas cap (1993) 8 Sold the gas cap gas into a Pertamina pipeline that was onsold to PUSRI, near Palembang, Pertamina took all commercial risks
Bayu-Undan Gravity Based LNG 9 My role: BHP Country Manager for Indonesia
10 Bayu-Undan again Meeting with guerilla leader, Xanana Gusmao, in Cipinang Prison, Jakarta, 16 August 1998. He agreed to honor the existing fiscal regime of Indonesia if Timor-Leste got independence this act meant that the Bayu- Undan LNG project was viable with mitigation of the political risk. This far-seeing diplomatic act, ensured that Timor-Leste had a consistent revenue stream for its first 20 years of independence.
Kakinada LNG Import Terminal (1998) 11 This project did not work because of too many stakeholders who were not aligned My role: BHP Petroleum India Country Manager
Pakistan Qadirpur, Kadanwari, Zamzama, Bhit (1999-2004) 12 1 BCF/d of new gas was brought on in 4 years, after General Musharaff took over in a military coup and brought in a technocrat apolitical cabinet My role: Managing Director, Premier-Shell Pakistn
Greater Sunrise LNG (2007) 13 Border disputes that could not be resolved My role: Energy Advisor to President and Prime Minister of Timor leste
France Coal Gas (2011) 14 We were lucky, Government intervention was kept to a minimum. We sold the gas to Total into a low CV pipeline My role: Managing Director of European Gas Limited
Usual drivers for Strong Projects 則 Strong sponsors 則 Competitive costs and compelling economics 則 Strategic product 則 Well-crafted contractual arrangements 則 Operating track record 則 Highly rated host country 15
My Lessons Learned 1. Regulatory framework needs to be well defined 2. Integrated project risk identification necessary 3. Existing infrastructure nearby the less moving parts, the better 4. Gas projects are commercially driven not engineered driven (different to oil) 5. Remember gas projects never come under budget! So do your risk assessment early and often 16
17 Peter Cockcroft 16 March, 2016

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Stranded gas to Stranded markets

  • 1. Stranded Gas to Stranded Markets A personal journey Peter Cockcroft
  • 2. My first time in Jakarta - 1965! 2 I stayed at the Intercon Hotel (later called the Hotel Indonesia) with my father, who was writing a book about Indonesia from October December 1965
  • 3. 3
  • 4. Arun LNG 4 My role: young guy with TI-59, so I could do some of the commercial computations for Pertamina for Train 4
  • 5. KE-5 Gas Field, East Java Sea pipeline to Gresik (1987) 5 Price discussions took 3 meetings My role: VP Engineering and lead negotiator, Kodeco
  • 6. A crazy idea (1992) 6 We had a gas discovery in the OK Block that was far from existing pipeline but close to the railway to Palembang. It didnt go ahead because of reserves uncertainty My role: Operations Manager, OK Block JOB
  • 7. Sengkang gas to power project (1994) 7 Gas price meetings 1 Well organized IPP process by DGEED in Jakarta My role: President, Energy Equity Asia
  • 8. Lematang (Harimau Field) gas cap (1993) 8 Sold the gas cap gas into a Pertamina pipeline that was onsold to PUSRI, near Palembang, Pertamina took all commercial risks
  • 9. Bayu-Undan Gravity Based LNG 9 My role: BHP Country Manager for Indonesia
  • 10. 10 Bayu-Undan again Meeting with guerilla leader, Xanana Gusmao, in Cipinang Prison, Jakarta, 16 August 1998. He agreed to honor the existing fiscal regime of Indonesia if Timor-Leste got independence this act meant that the Bayu- Undan LNG project was viable with mitigation of the political risk. This far-seeing diplomatic act, ensured that Timor-Leste had a consistent revenue stream for its first 20 years of independence.
  • 11. Kakinada LNG Import Terminal (1998) 11 This project did not work because of too many stakeholders who were not aligned My role: BHP Petroleum India Country Manager
  • 12. Pakistan Qadirpur, Kadanwari, Zamzama, Bhit (1999-2004) 12 1 BCF/d of new gas was brought on in 4 years, after General Musharaff took over in a military coup and brought in a technocrat apolitical cabinet My role: Managing Director, Premier-Shell Pakistn
  • 13. Greater Sunrise LNG (2007) 13 Border disputes that could not be resolved My role: Energy Advisor to President and Prime Minister of Timor leste
  • 14. France Coal Gas (2011) 14 We were lucky, Government intervention was kept to a minimum. We sold the gas to Total into a low CV pipeline My role: Managing Director of European Gas Limited
  • 15. Usual drivers for Strong Projects 則 Strong sponsors 則 Competitive costs and compelling economics 則 Strategic product 則 Well-crafted contractual arrangements 則 Operating track record 則 Highly rated host country 15
  • 16. My Lessons Learned 1. Regulatory framework needs to be well defined 2. Integrated project risk identification necessary 3. Existing infrastructure nearby the less moving parts, the better 4. Gas projects are commercially driven not engineered driven (different to oil) 5. Remember gas projects never come under budget! So do your risk assessment early and often 16