Article in Society of Petroleum Engineers

An Executive Interview

Dharmawan Samsu:

harmawan Samsu, or Dhar in short, is
everything a successful leader should
be. Claiming to be an introvert in an
extroverted world, Dhar is in fact a
very warm person, always the ﬁrst one to greet
others and throw a smile. We met him in the
middle of his very busy schedule.

Profile
Dhar graduated from the Physics Department Finishing my undergraduate degree, I chose the field but needed to certify it and develop it
of the University of Indonesia in 1989. He seismic interpretation in East Java basin as an LNG project. We were ready to certify
made up his mind for a career in oil and gas as my final thesis. It was a struggle coming Vorwata with D&M and LAPI ITB, and define
upon his bachelor thesis on East Java basin from a Physics background and then learning the commerciality for an LNG business, when
seismic interpretation. He then started his about geophysics and geology. However, the economic crisis hit in 1998.
career with ARCO as a field geophysicist in I was lucky to have strong mentors early in
Indonesia. His work on the Terang Sirasun my career with seasoned professionals such Another milestone came right after that.
basin mapping brought him his first US as Suprayitno Munadi, Roberto Fainstein, As the company had promised, following
assignment from 1995-1997. Stephen Scott, and Abdul Kohar from his the completion of that stage, ARCO sent
early days in ARCO. The passion started me back to an overseas assignment, as
He came back shortly to Indonesia, where there. they promised. I was put in a New Venture
he played a key role in the discovery and Exploration project. This was no longer on-
resource appraisal of the Tangguh field, Now, tell us more about you career, and the the-job-training, but a real job where a team
before returning to the US to work in the milestones in the making of Dharmawan performance depended on my leadership
Deepwater Gulf of Mexico from 1998-2000. Samsu. and performance. As there was no other
After the merger between ARCO and BP, Indonesian in the team, it was an opportunity
Dhar was assigned to the BP North America My first assignment working in the field was to show what an Indonesian can bring to
Exploration from 2000 – 2003. as a field geophysicist. I had a tremendous the company; I had to compete with local
opportunity to map the Terang Sirasun basin colleagues and other expats. Working with a
Another call from Indonesia needing its best in East Java. This assignment helped me project culture and management system that I
talents back home took Dhar to a different understand the close integration between was not familiar with, it was the shaping of my
challenge in the East and West Java geology and geophysics, as well as the basics becoming a full explorationist. It was another
assets, following which he came back to his of engineering and technical presentation. training milestone with the main lesson being:
exploration domain as Exploration Manager It was one of the high profile projects at you have to push yourself to prove to others
for BP Indonesia where he also continued the that time that allowed me the opportunity to that you have the same or higher quality and
development of Tangguh field. Then in late present to the senior management, including capability to contribute.
2011, he was chosen to lead BP Indonesia as to the ARCO Vice President worldwide. It
the Head of Country. was the first big milestone in my geoscience When the merger between ARCO and BP
career. happened, BP moved me to the North America
Below is our conversation with Dharmawan Exploration in Houston, to work on the Gulf
Samsu. Following the success of that discovery, I was of Mexico Deep Water Exploration project.
sent to my first overseas assignment in the Houston is the technology headquarters for
Before we talk about your career, can US ARCO headquarter to continue to study BP. This was another change of culture for
you tell us what made you interested in on the direct hydrocarbon indication and 3D me, when BP was also still in the process of
working in oil and gas in the first place? visualization. But before I completed that a culture change following its recent merger
assignment, I was sent back to Indonesia. The with Amoco. BP back then was already the
I started my career as a young geophysicist. company needed a geophysicist to assist the melting pot as it is now. And that taught me
When I graduated from the Physics team that recently made a big initial discovery the importance of cultural sensitivity and
Department at UI, I had already set my mind in the Weriagar field, Tangguh. It needed diversity while working and completing tasks
to have a career in the geoscience field, and not only expertise from other disciplines, together.
joining the oil and gas industry. There were but also a capable Indonesian in a team of
two events that triggered that. During my multinationals to provide balance. It was a Another enlightening moment came when
sophomore and third year, I was active in difficult time as it interrupted my family’s life I worked in this project for three years. My
professional organizations and associations. in US. This was the early milestone where team leader, who was about to go for an
Perhaps because of that, I got invited to an I put my country’s needs above all else. I extended maternity leave, challenged me to
Schlumberger event in 1989 that featured came back and got involved directly in the lead the team. It became an arranged test; to
many successful and prominent people in Tangguh project on Vorwata mapping. These allow me to see where I would fit best while
the oil and gas business. Participating in works formed our current understanding of still under the mentorship of my team leader,
that event made me proud and motivated the Vorwata as the backbone and main field as well as an effort to prepare me to take on
me. Another event was when I applied for a of Tangguh. bigger roles for the day I return to Indonesia.
summer vocation program with Schlumberger, I accepted the challenge. It was not an easy
and Kerja Praktek (KP) or Practical Training From then on, my career saw greater six-month challenge, dealing with technical
with Asamera. I went to field and fell in love integration between the geoscience, and commercial as well as personnel
with the profession ever since. petroleum, and reservoir engineering and management, which I did not expect before.
commercial fields. We suspected the size of The assignment provided me the opportunity

SPE News . Oct/Nov ‘12 9

Profile
to step up and present my decision on a more There is no successful project that results
comprehensive matter to senior management from a single discipline only. For example,
in BP. Through hard teamwork and my we cannot make a successful geophysical
leadership the team delivered a project interpretation if we do not understand geology.
recommendation that was well received by When we start drilling a well - particularly
the higher management. I passed the test, complex drilling because the low-hanging fruit
and was given a Spot Recognition Award and in the drilling world have almost completely
a signed letter from my team leader stating, gone - geoscientists have to be able to advise
“You are a Leader!” drilling engineers the properties of the well,
such as temperature, pressure prediction,
I continued my assignment by learning etc. Later on there will come reservoir
Project Commercial courses on leasing, modeling, economics, and many more. A
sales, etc. These new skill sets were put in narrow mind will not get through and achieve
practice immediately in the two jobs I was success easily without understanding other
next assigned to back in Indonesia; the disciplines. My assignment in West Java
East Java asset, and later the West Java opened up my mind on the importance of a
asset. I was responsible for a team of more fully integrated approach.
than 90 people in Offshore North West Java
(ONWJ). This assignment provided me real It is imperative that you excel in your main
training in portfolio management, leadership, discipline first - you need your first field of
commercialization, people development, and knowledge and expertise to be the anchor.
external communication and engagement. I call this getting the depth in your career.
Another integration milestone in my career. Integration means that you see how other
people and other disciplines interact and
After that, BP put me back into exploration affect your outcome. I call this embracing the
as the Exploration Manager for BP Indonesia, breadth.
putting a gear forward, and resurrecting the
exploration agenda for BP in Indonesia with Our homework is to educate the younger
focus on the Indo-Australia margin. We generation to develop the breadth without
continued to expand by assessing other losing focus on the depth; without leaving the
opportunities in the southern part of Papua main anchor and main fingerprint. It is very
and Arafura Sea. That was the beginning of important to develop your depth first and then
us going back to exploration. Next we will the breadth, otherwise you will become too
also conduct exploration within the Tangguh generalist too early in your career.
block itself. And this proves that BP is
interested in a long-term presence in Papua From the career progression you
and Indonesia. described, your experiences prepared you
to become “a chosen one”. Can you share
In 2011, because of my technical background with us some important lessons from that
and leadership experience, BP trusted me long career?
to take over the leadership when Pak Nico
Kanter decided to leave the company. And I never asked for the job. If you take
that is the progress of my career story so far; any positive challenge passionately and
I hope our younger readers can gain some wholeheartedly, it will help you in your
insights from it. pursuits, whatever they may be.

You put strong emphasis on integration It is important that once you find your
several times. Can you enlighten us passion, you go deeper into that, and never
further? feel satisfied too easily. The sky is the limit.
I found in my early career that it is very
Yes, indeed. Integration is the key of success. important to find someone you can consult
When we talk about integration, narrow- with, or mentors. Because sometimes we do
mindedness has to be removed from our not know what we know. Hence, mentors can
minds. help enlighten many things.

10 SPE News . Oct/Nov ‘12

Profile
For some people, choices were made for You were, and have been, very active government, local communities, external
them. Others may need to choose. There are in professional organizations and parties, partners, and NGOs, depend on the
born-leaders, and there are trained leaders. associations. Does that have any value in quality and speed of our decisions. I always
Reflecting back on my career, initially my shaping your career? put that in higher priority than my personal
choices were made for me. But after that, needs.
my leadership was shaped through training. Yes, indeed. The professional organizations
When opportunity for a responsibility comes, and associations such as student chapters, However, I can only do that with the support
you have to grab it, step up to the plate and IATMI, IAGI, SPE, etc. are worth sacrificing of my family. I consider myself a very lucky
deliver. This is the school of leadership I and spending time for, as the returns are person to have very understanding wife and
believe I am in, where leaders are shaped much greater, in particular for a geoscientist daughter. My wife fully supports the path
by assignments, practices, coaching and in the business world. that I chose. I have one daughter, a very
feedback. This is the real training as there are independent young woman, who is studying
people also needing your decision, coaching It does not matter how smart you are as a geology now. They fully understand that my
and feedback. You will then need to reflect geoscientist, if no one buys your ideas, your business accountabilities require me to be
more and listen more. work stops there. Volunteering in professional available 24/7. With that full support, I can
organizations and societies provide the safest then focus on the work agenda, listen to
You are so passionate about what you are way to practice leadership and develop your people in my team, in Papua, with extensive
doing. What inspires and motivates you? future network, while contributing to a greater amount of travel. It comes back again to
good for the profession and the country at the balance. I always make sure that whenever
Everyone must have an ideal in his or her same time. I reflect on what I have become I have time with family, it is the best quality
mind, something that we look upon that today, and the answer perhaps lies in my time.
gives meaning to our life. The ideal that practice in those organizations that perhaps
you choose will guide you where to go and were reflected in my career path. I was asked about the sacrifices we need to
how. As I chose geoscience as my make to achieve the best of what we
path, I worked hard to be the best can offer. My answer is that we make
geoscientist I can be, to contribute those sacrifices earlier on in our career,
more to Indonesia. The other passion with full consciousness, accepting our
I have is sharing knowledge with and path and striving for the best. Beyond
teaching the younger generations. that, you have to define the balance
that works for you. It is different from
The meaning of life, for me, is fulfilled person to person. Responsibility takes
when somebody, directly or indirectly, sacrifice, but when chosen wisely,
thanks me or recognizes me as with all things considered, you can do
a source of his or her knowledge it wholeheartedly.
advancement. A simple thanks from a student What is your definition and recipe for
when I visit the campus motivates me a long success? Now let’s talk about Indonesia’s oil and
way. In a greater sense, being part of solution gas. Your footprints are quite substantial
to our energy situation in Indonesia also Success to me can come in two ways: when in shaping it. What do you see in the
fulfills that sense of ideal. I choose BP as the you are able to develop others, and being future?
path of achieving that. recognized for that; and the second is when
the business I represent and stakeholders Exploration, exploration, and more
Being a national in a big international firm is I influence see the mutual achievement. exploration.
not easy, in particular when you reach a level Maintaining, developing, and nurturing the
where responsibility and accountability gets balance is the essence of success. Through organizations and societies like the
bigger. I am developing the opinion to myself SPE, we are made aware of the situation of
that I represent Indonesia to BP and also What about maintaining balance for our industry. Indonesia will still be heavily
represent the industry to bigger stakeholders your personal needs as well? Who is dependent on the oil and gas sector in the
in Indonesia. The balance is quite important. Dharmawan outside of work? future, as we are right now with more than one
Then the key is to be thoughtful in making third of our State budget coming from it. There
recommendations and whole heartedly Yes, I do try to maintain a life outside of are two areas of activities in our industry. First
provide direction to implement them. When work. However, when you are given bigger is to maintain the base - the old fields from
you have done your best to maintain that responsibilities and accountabilities, our which most of our current production come
balance, being honest to yourself, then you personal needs will take second place. - through reservoir management, enhanced
are more confidence that you have contributed There is a greater cause out there where oil recovery, infill drilling, etc. Second, we
in the frame you are in. That motivates me. many people and stakeholders, such as the need to improve our Reserve Replacement


Profile

Ratio by encouraging the industry to do more for local electricity power generation in Papua Community Relations, Livelihood, and ICBS
exploration work. We need to maintain the Barat province. We are also continuing our (Integrated Community-Based Security
balance between the increase of exploration social investment there. programme). We are quite pleased with the
and the effectiveness of managing the base. results on all fronts. We are never complacent
BP’s footprint is quite large now in Papua. and always listen to stakeholders. We also
I do not think our industry needs more What is the meaning of Papua to BP? have TIAP (Tangguh Independent Advisory
incentives. What needed is to remove Panel), which consists of a US Senators
the disincentives. We need more truthful Papua, and Indonesia as a whole, is very and a foremost Papuan leader who provide
dialogs, where national oil companies important for BP. When we engage local independent feedback to our programs
(NOC), international oil companies (IOC), and foreign stakeholders to discuss BP and there.
Government, the House of Representatives, Papua, we always maintain that our intention
media, and local communities, agree to to invest remains strong, even in the midst of As the program continues, I believe that
strengthen the support for more exploration. the growing need for domestic gas and the all the learning we have experienced from
Working in Papua, I am a firm believer of the discussions of fair level pricing. The fact that the past will be strengthened to achieve a
need for stronger collaboration with local BP is still going ahead with the expansion stronger social sustainability, which is the key
stakeholders, such as local government and plan demonstrates the importance of this to operational sustainability, whereby the oil
society. I am also learning that it requires project to BP. and gas activity in Tangguh works in harmony
all parties’ mutual understanding to achieve with the people living around it.
the optimal, meaningful, and sustainable Second, it demonstrates that Indonesia is
synergy. still a good place to invest, despite outsiders’ There are several excellent scorecards we
view that Indonesia becoming more inward can share. One of them is the reduction in
I support the view that we are changing the looking. Third, it demonstrates that Papua is the malaria prevalence rate from 24% in 2004
paradigm of moving from the west to the still a safe place to work, both for Indonesians to 0.3% at all villages around Tangguh now.
east of Indonesia, particularly for the gas and foreign investors. Other achievements include the significant
business. In the east, most of the projects improvement in the level of graduation and
are gas, hence another paradigm shift from Papua plays an important role for our participation at elementary and secondary
oil to gas. The oil era is indeed coming to an continued presence in Indonesia. We have high schools. Our livelihood program has also
end. established a stable operational base there. picked up pace. People surrounding Tangguh,
We have come a long way since we began which were hunter-gatherers, are now able
Can you talk more about BP? our operation many years ago. We have to supply fresh produce for us to purchase.
been producing LNG since 2009, and are Moving forward, we are looking forward to
Our history in Indonesia is quite long and finding more reserves to be certified for working together with them to increase their
extensive, either through our heritage Train 3, and continue to pursue for more capacity to prosper beyond Tangguh.
companies or through BP now and in the resource for future trains. We are building
future. Our biggest agenda currently is the more businesses on top of that stability. BP When Tangguh Train 3 becomes online in
development of a third train at Tangguh, a big is confident to become the partner of choice early 2019, we will provide gas that could
milestone for us. Total investment from BP for the Government and Papua. generate 50 MW of electricity. We will
and partners are up to US$12billion. work with Electricity Company and other
And what is the meaning of BP to Papua? stakeholders in the relevant Government
We have also gained some insight on what ministries, as they would be responsible in
Indonesia needs when we developed the Let me answer that by continuing from our developing the transmission and distribution
blueprint for our expansion. Based on that confidence as the strategic partner for Papua. of that electricity. In the meantime, we have
we voluntarily committed 40% of the gas The confidence comes from our integrated found out that we would be able to secure up
production from Train 3 for domestic use. social programme. We have six pillars of the to 8 MW of power to be distributed by PLN,
We will also provide the gas that will be used programme: Health, Education, Governance, who would need to build the transmission


Profile
and distribution to local communities. From the region. The need for energy will increase, How much the competition will dictate the
that 8 MW, some 4 MW will be ready to PLN and gas will be the key part of it. A balance price, or the other way around? That depends
in January 2013. It is a big achievement by between export and domestic use will need on how big the demand in the area will grow.
the team that is continuously listening to, and to be achieved. The fair level of pricing for The second factor is how much we, BP and
being positively challenged by the community, gas will also need to be achieved through Indonesia, can capitalize on our current
to do better. Business-to-Business talks and support from exploration boost. The flawlessness of
the Government. Tangguh expansion’s Train 3 and beyond will
How is the role of women in BP? become critical factor.
We all acknowledge that Indonesia is a pioneer
BP is a fully diversified and inclusive for LNG in Asia Pacific. We have the biggest Last question; how do you prevent
organization. The equal right opportunity for opportunity to maintain that role through long yourself from getting stressed out?
all is high in our agenda. I happen to also be historical relationship, provided that we can
the sponsor for BPWIN, BP’s global network respond quickly to market changes. Other I do my hobbies. Cycling is one of them. I am
of professional women working in BP. Our competitive advantage of Indonesian LNG is also active in professional organizations and
industry is still a male-dominated one, but the proximity to the target markets. societies. I encourage our young professionals
role of women is equally important. to have those kinds of activities. Also, do not
For Tangguh, the key to come ahead of the forget to have quality life with your family.
With regional and world dynamics, many competition is by progressing timely and
LNG producers including US, Australia, flawlessly. That includes obtaining all the Always think of what you have done and
Middle East, Indonesia, will compete for necessary permits and approvals to enable achieved today, before entering the next
the same market, namely Asia Pacific. How BP to start front-end engineering and design challenges tomorrow. Do it every single day.
do you see the competition? How do you (FEED) in early 2013 and final investment
see the domestic market outlook in gas? decision (FID) before the 2014 elections,
to be on-stream ahead of the 2018-2019
In domestic market, demand will still be gas commissioning timeframe. It is still very
growing fast, as the industrialization growth promising for Tangguh and Indonesia.
of Indonesia will remain one of the highest in

From left to right: Atria Lesmana, Bambang Istadi, Dharmawan Samsu, Mega and Hasbi Lubis


LNG FSRU Pioneer
Nusantara Regas:
Pioneering the First LNG FSRU in
Asia Pacific
By: Hendra Jaya, Nusantara Regas

I
n the beginning, it was all about
subsidy.

PLN generates electricity from various
fuelsthat are sub efficient in terms of cost and
source mix. Many power plants were designed National electricity will requires more LNG

to burn gas as a cleaner alternative to fuel oil,
in anticipation of abundant future domestic
gas sources. But domestic gas supply in many
cities has not materialized, so PLN continues
to burn oil fuel. This is economic for PLN due to
subsidized fuel prices, but is bad for Indonesia
as a net oil importer since 2004.

Oil prices skyrocketed in 2008. This forced
PLN and the Government of Indonesia to
quickly act to better manage their fuel mix.
SOURCE: PLN
Chart 1 shows that PLN plan to replace MFO
and HSD with cheaper coal and gas (piped
and LNG). The major projects are the Muara recommended, due to uncertainties in land FSRU “Nusantara Regas 1” is a converted
Karang and Tanjung Priok power plants that clearance, and a longer construction period. LNG Carrier from Golar Energy. It was built
support the biggest loads in West Java. Chart in 1977, has a capacity of 125,000m3of LNG,
2 shows around 400 mmscfd (± 3mtpa) of A sea-based Floating Storage Receiving and can re-gasify 500 mmcfd (~3.8 mtpa)
additional gas supply is required to replace Unit (FSRU) was selected. FSRU is proven of gas. It is owned by an Indonesian entity,
fuel oil in these two plants. technology that is safe, reliable, easy to setup fliesan Indonesian flag, can be moored onsite
and maintain. However, no FSRU exists in for 20 years, and has 40 years of hulllife. The
The birth of PT Nusantara Regas and the the Asia Pacific region. Indonesia needed to Picture 2 shows the FSRU installation and in
first ever Asia Pacific LNG FSRU pioneer one. operation.
PLN chose LNG as available piped gas
volumes were too low. A consortium agreement On 17 May 2010, PT Nusantara Regas (PT NR), Given so many firsts, this was not an easy
to build and operate an LNG receiving terminal a joint venture company between Pertamina project to implement. It required strong
was established on 22 April 2008, followed and PGN, was established to develop and run leadership and clear vision. Enter Hendra
three days later by the signing of MOU’s the LNG FSRU to supply PLN power plants Jaya, previously General Manager of JOB
for LNG utilization for the domestic market and other industries in West Java. Picture 1 Pertamina – Medco Tomori, as President
between Pertamina, PGN and PLN. shows the location of the FSRU relative to the Director of PT NR to work withthe competent
Muara Karang power plant. directors and staff already in place.
A land-based LNG receiving terminal was not
In October 2010, Ground Breaking occurred in June 2011, and
Power Plant Capacity Gas Req. Gas Supply Balance
the Final Investment Commercial Operations begun on 1 August
MW BBTUD BBTUD BBTUD
Decision was made, 2012.
Muara Karang :
- Existing 908 followed by signing
253 110 -180
- Repowering 694 of the Sales and FSRU Nusantara Regas 1 secured 1.5 mtpa
Tanjung Priok : Purchase Agreement LNG from the Mahakam gas producers,
- Existing 1,180
296 10 -286 with Mahakam gas supplying around 200 mmscfd to PLN Muara
- Repowering 743
suppliers and the Gas Karang, mostly for peak generation. Although
TOTAL 549 120 -466 Sales Agreement with this represents less than half of its full capacity,
PLN. the FSRU project is saving $ 1.8 million per


LNG FSRU Pioneer
receiving terminals. The team compensated
for its lack of capability with hard work, speed
of execution, and close supervision. The
FSRU team was supervised by at least four bodies:
UKP4 (Presidential task force on control of
LOCATION

development program), Vice President’s office,
Ministry of State Enterprises, and Ministry of
Energy and Mineral Resources. Internally,
Hendra needed to manage cultural differences
between parent companies Pertamina and
PGN, while developing PT NR’s own identity
PLN MUARA KARANG

LOCATION: 5o 58’ 28,920” LS dan 106o 47’ 57,96” BT
RADIUS : 2 KM , WATER DEPTH: 22 – 23 M
PIPING LENGTH FROM SHORE: 15 KM
and culture.

Picture 1: FSRU Location Given Governmental pressure and
involvement, one would think that all parties
day in fuel subsidies. become a gas hub, whereby additional FSRUs would be aligned to achieve the same goal.
as hubs will serve end users through small In reality, things weredifferent. Hendra and
The Future of LNG FSRU cargo ships and even trucks. Several gas team needed to negotiate their way out of
Hendra delivered the first FSRU in the Asia- sales MOUs have already been exercised. In license complexity. They identified more than
Pacific region on time and without serious addition, parent company PGN is finding other 100 different licenses required from various
incident. This gives confidence to stakeholders domestic buyers. stakeholders to produce first gas, andmanaged
that Indonesia is once again leading LNG to slim this down to 40+. This is still way too
innovation. For Indonesia, having a variety of gas many. Such hindrances should be a relic of
carriers and transporters, such as PT NR, the past bureaucracy.
His next focus is to grow PT NR as a profitable PGN, Pertamina Gas, provides security and
business. flexibility of gas supply. However, we need Hendra identified three keys to success to
further policies to develop the domestic gas build and install the first FSRU in the Asia-
Operation of West Java FSRU at full capacity market, and to ensure the players, which are Pacific. Firstly, strong leadership with clear
will fulfill gas demand from PLN and for other fully or partially owned by Government, will vision was crucial to keep the project on-
industries in the Jakarta area, and reduce fuel not suffer adverse effects from competition. time and on-budget. Secondly, stakeholder
oil subsidies. communication unified vision and convinced
Wisdom of the Pioneer all parties to remain in the spirit of the project.
LNG supply is the issue. PT NR currently has Indonesia is well known as a world leader Thirdly, the ability to earn trust internally and to
a single source of LNG, which will reduce in LNG exports, but until now it has never build partnerships.
to 1.25 mtpain 2013. Current LNG supply is “exported” LNG to the domestic market at this
only sufficient to meet a part of demand from scale. Hendra leads a team of capable persons Great voyage ahead for PT NR and for
PLN Muara Karang. PT NR is working closely but without experience in building LNG Indonesia domestic gas.
with SKMIGAS and PSC’s to double LNG
supply by the end of 2013. PT NR, as holder PROJECT UPDATES FSRU Key Term & Installation
of SPA’s and GSA’s, is in position to manage
LNG shipments from various sources, which LOKASI FSRT DI TELUK JAKARTA
will reduce dependency on PSC priority and
scheduling.

Fuel oil prices are forecast to stay high, so
economics of LNG for power generation remain
attractive. Nevertheless, the Government and
PLN need to further encourage conversion
from fuel oil to gas as much as, or perhaps
more than, to coal. Gas infrastructure and the
LNG FSRU will improve fuel mix flexibility, • Mooring system consists of 4 mooring dolphins and 4 breasting dolphins
and increase source sustainability from both • Mooring dolphins will be equipped with 3 pad-eyes for connecting the mooring lines
domestic and imported LNG. • Breasting dolphins are equipped with 2 pad-eyes for connecting the mooring lines and 3
fenders to absorb the impact from LNGC
PT NR plans to grow beyond PLN and power • The LNG carrier calling at the FSRU (side by side mooring)is taken to be maximum 157,000 m3
• LNG transfer from LNG carriers via marinized LNG hard arms
generation. Hendra envisions PT NR to


Deep Water Gas Development
Delving into the Novelty of the Masela
Abadi FLNG Project Development
By: Dinar Indriana Khoiriah,
Sr. Project Communication Coordinator of INPEX Masela Ltd.

Contract Area: Masela PSC Block
Equity holder: INPEX (60%)
EMP (10%)
Shell(30%)
Block acquired: November 16, 1998
Acreage: 5,725 km2(Original) 3,221 km2(Current)
Field area: More than 1,200km2 (30kmx40km)
Production: LNG 2,5mtpa @ FOB
Condensate 8,400 BOPD
Liquefaction: APCI Dual Mix Refrigerants

Exploration Milestone
2000 - Drilled Abadi-1 and discovered gas in the Plover sandstone
2002 - Drilled 2 appraisal wells (Abadi- 2 and 3) and confirmed
Hydrocarbon presence of each well
2007-08 - Drilled 4 appraisal wells to firmly
confirm the reserves size
- Conducted Pre-FEED for FLNG

I
npex’s courage to develop Indonesia’s and pressures, continuous wave movement, and protection from collisions.
first Floating LNG (FLNG) project in the cyclones and limited processing space.
Arafura Sea in Eastern Indonesia is fuelled Topside layout design considers safety,
by a spirit to support Indonesian energy Masela is operated by Masela PSC, a operability and maintainability, with a focus on
sustainability. subsidiary company of INPEX Corporation, risk exposures within the Living Quarters such
an oil and gas company with 46 years of
The story started in 1998 when the Masela experience in 39 projects worldwide, including
PSC was signed. In 2000, the discovery well 11 projects in Indonesia. Inpex’s cumulative
Abadi-1 was drilled followed by 3D and six worldwide investment to date is USD 18.3
appraisal wells to confirm reserve size. Pre- billion.
FEED extended from 2000 to 2008 and led
to the FLNG development concept, complete The illustration below shows the Stage-1
with supporting studies and assurance a 30 Development Concept, which targets the
year production life. Floating liquefaction northern reservoir block. The map shows the
technology was selected instead of a sub-sea drilling centre and the offset Floating
conventional land-based LNG plant as the LNG vessel location. Five production wells
Abadi field is far from land and separated by will be drilled from a single drilling center.
Drilling Center and FLNG Deployment Diagram
the deep Timor Trough as seen in the map FEED for the SURF (Subsea Umbilical Riser
below. In December 2010, final approval of the and Flowline) commenced in November 2012,
Plan of Development (PoD) was received. and the FLNG FEED will start soon.

The Abadi FLNG vessel will combine proven The Floating LNG facility will consists of the
technology from FPSO, LNG carrier and LNG topside LNG Plant, hull and other elements
onshore plants, and is set to produce 2.5 mtpa as depicted below. Different from land-based
(million metric tons per annum) of LNG. It will LNG plants, FLNG design requires studies
be amongst the first FLNG projects worldwide, for process and equipment marinization,
and the first in Indonesia. Challenges include to account for wave motion, marine
deep-water, high reservoir temperatures environmental loads, corrosion resistance


Deep Water Gas Development
the Government of Indonesia include domestic
gas allocation to support Indonesia’s economic
development, taking into account the balance
between domestic supply and exports. LNG
marketing activities are being carried out in
parallel with project development.

Masela Abadi Floating LNG will be the largest
and most-complex investment in Indonesian
offshore oil and gas processing. Reliable
operation in sometimes harsh marine
conditions requires vast number of process
and operational elements to be simultaneously
performed with the risks associated
with liquefaction plant performance and
offshore operations. As floating liquefaction
development becomes a reality, attention will
as flare heat radiation and explosions in the LNG will be offloaded to LNG carriers with move from the technical arena to economics
process area. The illustration below shows a side-by-side configuration as shown and commercial obstacles. Many economic,
an example FLNG layout, where the utility below. The close proximity of the LNG commercial, financial and legal considerations
area segregates the living quarters from the carrier and FLNG means that LNG offloading need to be better understood and their risks
hazardous processing area and flare. can only be done in benign conditions. mitigated before offshore LNG production
Condensate produced with the gas will be can become a widespread gas monetization
Process performance may be affected by offloaded to condensate carriers with a solution.
wave motion. Tall towers and columns such tandem configuration, as typically done with
as absorbers, fractionators and main heat conventional FPSOs.
exchangers must be designed to handle this
motion. LNG containment must account for Masela Abadi FLNG will increase gas
sloshing in a partly-filled condition, the need sustainability for domestic and overseas
for deck space for process plant operability, buyers over a long term. Key commercial
and safety and maintainability. arrangements currently being discussed with


Technology Corner

Marginal Gas Development with
Compact Motor-driven LNG
By: Mutsumi Horitsugi, Chief Engineer HITACHI Ltd.

I
n the 21st century, a number of political
and environmental crises have pushed
gas to the fore as a more environmentally-
friendly energy source than oil and coal. Large
gas projects can absorb the cost to install
long pipelines or to install a LNG plant. But
how to commercialize small and isolated gas
projects? Compact Motor-driven LNG is one
potential solution.

Key Words
LNG, Motor Drive, Stranded Gas, Marginal
Gas Field

1. Background
Natural gas is more environmentally-friendly
than oil, and gas fields are distributed Map 1-2 Natural Gas Resources in Indonesia
more widely than oil fields. Therefore, it is
expected that natural gas usage will continue gas production in regions other than North to transport and distribute the gas is under
to increase. This increase is further driven by America and Russia (where gas pipeline development in some cases and simply not
technical innovation such as high-efficiency networks are well established) is low despite economic in many other cases, especially to
Combined Cycle Gas Turbines (CCGT) for plenty of resources. This is due to a lack of islands in eastern Indonesia. It will take time to
power generation. infrastructure for gas transmission. cover widely spread marginal gas fields of 70%
in volume of conventional gas and distribute
However, for natural gas to become a major Indonesia is a good example. It has plenty them to many of remote islands.
energy source, we must build infrastructure of gas resources, including conventional and
to transmit and distribute the gas from the unconventional gas such as CBM and shale gas 2. Ways to transmit Gas Energy
fields to the markets. Map 1-1 shows that as shown on Map 1-2. However, infrastructure Established ways to transmit gas energy to
markets include pipeline, LNG, CNG, Gas-To-
Liquids and Gas-To-Wire. Future ways include
Natural Gas Hydrates (NGH) transported by
reefer.

This article will focus on LNG, which is mainly
liquefied methane at -161.5 oC at atmospheric
pressure with 1/600 volume of gaseous
methane. LNG is transported by cryogenic
tanker and in some places by road tankers.

The LNG business started in 1969 when Tokyo
Electric Power Co. (TEPCO) and Tokyo Gas
commenced LNG imports from Alaska. These
companies benefited enormously from stable
LNG prices through two oil crises in the 1970’s.
Presently, LNG contributes 7.5% of total natural
gas consumption, excluding domestic usage.
More than 30% of LNG has been consumed
in Europe and the USA. LNG can compete
with piped gas due to economies of scale from
large LNG plants and LNG carrier ships.
Map 1-1 Gas Reserves & Production Volume by Region But such LNG projects are suited only to


Technology Corner
also be converted into DME by dehydration
which is proven technology, but the energy
efficiency of the conversion is only about 60%
which creates a high production cost. DME
can be used as a substitute for LPG.

GTL diesel can be blended to decrease the
sulfur content of diesel from crude oil, but
the present process to convert gas to diesel
also has a low thermal efficiency. The wax
by-products from the GTL diesel need to be
processed in a hydro-cracker which is an extra
cost.

Gas-to-Wire (GTW) can be a good solution
for marginal gas fields located not far from a
power market.
Table 3-1 Solutions for Gas Transmission
3. Applicability of Compact LNG
of Auto Thermal Reformer Compact LNG is a solution for smaller gas
(ATR) has been studied. fields located long distances from markets as
However, problem is the shown on Table 3-1
high cost of the Oxygen (O2)
plant, which tends to make The cross-over–point between Conventional
the project uneconomic. To LNG and Compact LNG is at around 150
avoid the costly Oxygen mmscfd, equivalent to approximately one
plant, heat resistant Ion million tons of LNG per year.
Transport Membrane (ITM)
to separate Oxygen from There are many kinds of LNG processes as
air is under research and shown on Table 3-2. Processes for large-scale
development in several LNG plants have higher efficiency, huge cost,
laboratories to produce huge footprints and complexity.
synthetic gas (CO+H2)
more economically. For smaller gas developments, Single Mixed
Refrigerant (SMR) is a better option than N2
Methanol has Expanders because SMR has higher efficiency
disadvantages such as and greater tolerance to changes in feed gas
giant gas fields, which require long term gas toxicity and low calorific value, but is useful as properties that occur when additional gas field
contracts to recover the huge investment. a raw material for chemical products. It can developments come online.
Smaller gas fields have remained stranded.

One solution to commercialize sub-LNG gas
fields has been to liquefy gas synthetically
(GTL) to create methanol and/or Di-Methyl-
Ether (DME) using the Fischer-Tropsch-Oil
(FTO) process. The FTO process involves
reforming natural gas into carbon monoxide
(CO) and hydrogen (H2), and then synthesis
into the final product. The present conversion
rate is low at about 20% which can be
uneconomic.

Development of a catalyst to directly synthesize
liquid hydrocarbons and/or chemicals from
methane is still under development, so the
indirect synthesis and reforming process will
be the main process in the industry for some
time.

To increase the volume of reformer, introduction


Technology Corner
4. Compact Motor-driven LNG
Technologies

LNG refrigerant compressors are usually
driven by steam turbines and/or gas turbines.
Steam turbine systems require a lot of auxiliary
equipment and consume energy to generate
steam, so are not suited to small-scale LNG
plants. As for gas turbines, the range of
small gas turbines is limited, so it is hard to
find suitable gas turbines for small-scale LNG
plants.

Figure 4-1 shows a flow diagram of the SMR
process, where the motor-drive system receives
a power from a local power plant or the grid.
Compared to turbine-driven systems, a motor-
drive SMR systems offer simpler operation,
smaller footprint, lower Capex and Opex, higher
availability, and shorter construction schedule
with maximum prefabrication and skid-mount
installation. Table 4-2 Comparison of Gas-turbine Drive VS Motor Drive

Availability of motor-drive systems is typically liquefaction efficiency than gas-turbine drive Other than harmonics, technical considerations
5% higher than gas turbine system due to less systems. include gas property variation between gas
maintenance as shown in Table 4-2. fields, acid gas like H2S, and impurities like
This is because of the independent design of alkaline metals. Small-scale LNG plants cannot
Thermal efficiency of motor-drive systems the power plant without margin requirements support luxurious gas treatment facilities to
is higher than gas-turbine systems. This is from applicable standards. strip out all harmful substances. Therefore, a
because standards like API-617 specify that fit-for-purpose gas treatment facility shall be
process compressors should have 10% of In the case of motor-drive systems with designed for each case considering reliability
performance margin, and that drivers including Variable Speed Drives (VSD) using inverters, of the system and conformity to applicable
gas turbines should have another 10% of care shall be taken to avoid vibrations caused environmental regulations.
margin. The result is gas turbines are operated by harmonics from inverters. Simulation is the
under partial load which results in lower thermal key technology to confirm stable operation 5. Conclusion
efficiency. prior to the field installation by controlling Considering all the above, it is expected that
all the resonance points among harmonics compact motor-drive technologies can realize
The end result is motor-drive SMR process will frequencies and natural frequencies of all competitive LNG prices by minimizing Capex
have higher total efficiency than gas-turbine rotating equipment such as motors, generators for fixed facilities like the gas treatment system.
drive systems, even though SMR has a lower and gas turbines. Skid-mounted facilities such as cold boxes and
gas turbine generators are expandable, flexible
for variable operation and can be reused for
future projects.

The feasibility of Compact LNG will be improved
by well-organized asset management of such
movable equipment. The prize is enormous –
commercialization of stranded, marginal and
geriatric gas fields around the world, and even
associated gas from remote oil fields.

Reference
1) Society for the study of gas market problem in
METI Japan
http://www.meti.go.jp/policy/gas/kihonken/
houkoku/houkoku-sankoukokusai.pdf
2) Mr. Hiroshi Morishima, All about Natural Gas
– Latest Knowledge for Major Energy in 21
Century, Oil & Gas Review 2004/1-3 VOL.37
No.1-2(JNOC)

Figure 4-1 Typical Flow Diagram of SMR with Motor-drive System


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