1. Indo GDMP TIM Model
Pilot Transportation Infrastructure Model (TIM)
Demo version
(GDMP Workshop June 2013)

2. 2
Presentation outline
• Objective, approach and key outputs of TIM
• Detailed presentation of TIM, covering
– Assumptions
– Scenarios
– Limitations
• User manual of model, covering
– Running the model and selecting different scenarios
– Changing inputs
– Retrieving key output information
• Practical application

3. 3
Presentation outline
• Objective, approach and key outputs of TIM
• Detailed presentation of TIM, covering
– Assumptions
– Scenarios
– Limitations
• User manual of model, covering
– Running the model and selecting different scenarios
– Changing inputs
– Retrieving key output information
• Practical application

4. 4
Objective of TIM and key questions
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?

5. 5
Map illustrating S/D imbalances across regions
Excess
Production
Unmet Demand
Based on DASS Base Case scenario

6. 6
Approach and overview of methodology
Approach followed in TIM is a minimization across transportation
costs of pipeline and LNG connections
This is done for each year with given export, demand and production
volumes (inputs from DASS) in each region
Approach ensures a balancing of supply and demand volumes across
all regions at lowest transport cost
Illustrative example
C. Java
E. Kalimantan
W. Java
• If E. Kalimantan has excess supply
and if W. Java has unmet demand
• TIM will prioritize connection via C.
Java, because least cost:
2.1 $/mcf < 3.2 $/mcf
1.2 $/mcf
0.9 $/mcf
3.2 $/mcf

7. 7
Key outputs
Infrastructure 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. 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

8. 8
Output: Regional S/D balances, unmet
demand, exports and interregional flows
Excess
Production
Unmet DemandExports
Domestic Transfers
Click to go back to summary results slide

9. 9
Output: Interregional flows by connection
concept
Click to go back to summary results slide

10. 10
Output: Infrastructure Plan
Click to go back to summary results slide

11. 11
Output: Costs, capacity requirements and
throughputs
Click to go back to summary results slide

12. 12
Presentation outline
• Objective, approach and key outputs of TIM
• Detailed presentation of TIM, covering
– Assumptions
– Scenarios
– Limitations
• User manual of model, covering
– Running the model and selecting different scenarios
– Changing inputs
– Retrieving key output information
• Practical application

13. 13
Model overview
Infrastructure plan
Infrastructure cost summary
DASS inputs
INPUT DATA
Demand data
Transport costs used in
minimisation
CONTROL PANEL
RESULTSSCENARIOS
Supply data
Export data
Connection Concepts
Run minimisation
Interregional LNG and pipeline
flows
S/D balances, exports, and
unmet demand by region

14. 14
Inputs (1/2):
demand, production, export
Demand, export and production volumes over the period 2013-2040
will be imported from DASS.
This means that the results are dependent on policy scenarios
simulated and constructed in DASS.
The transfer of DASS outputs to TIM Inputs is done via a transfer file.

15. 15
Inputs (2/2): Cost Parameters
Input cost parameters are used for two purposes in model:
1. To calculate ‘typical unit transport cost’ used in minimization – input into
minimization
2. To calculate ‘total infrastructure costs’ needed for optimized
interregional flows and LNG exports – output of minimization
The cost input parameters in TIM include:
2013 Pipeline Cost assumptions
Offshore Pipeline CAPEX 70,000 US$/inch/km
Onshore Pipeline CAPEX 35,000 US$/inch/km
Compressor station costs 2,000 US$/horsepower
One compressor station every 120km
Capacity of compressor
station 50 horsepower/Bcf/y
Load factor of PL 80%
Annual OPEX 3%of CAPEX
2013 LNG Cost assumptions
Liquefaction CAPEX 1,200 US$/t of cap/y
Liquefaction OPEX 6% of CAPEX
Shipping costs 114,000 US$/day/ship
Typical cargo ship capacity 150,000 Tonnes of LNG
Traveling speed of LNG cargoes 30 km/h
Regasification CAPEX 130 US$/t of cap/y
Regas Annual OPEX 4% of CAPEX
Boil-off rate in process 10% of gas transported

16. 16
Scenarios: Connection concepts
approach
Scenarios in TIM are defined by the selection of a combination of different
‘connection concept’
A connection concept consists of a transport link between two regions, i.e. an
LNG or pipeline connection  no specific infrastructure options are selected
but connections between regions
The selection of the connection concepts over which TIM optimizes is done
manually and has to be determined by the user
Example selection Included?

17. 17
Scenarios: Optimization methodology
TIM projects gas flow profiles for each included connection concept until 2040
The flow projection is the result of minimizing the combination of
transportation cost + volumes of unmet demand in every year
The optimization therefore seeks the least cost combination of (selected)
connection concepts while avoiding as best possible unmet demand.
Cost used in optimization
TIM uses levelised per unit costs determined prior to optimization. These are
calculated on the basis of:
• a typical flow profile for each connection concept
• PV of CAPEX, OPEX and other costs (shipping costs for LNG, losses,….)
• Where existing capacity exists only future OPEX are considered
• Distance of connection concept

18. 18
Infrastructure cost and utilisation summaryInfrastructure plan
Results: Maps, Tables and key figures
Interregional LNG and pipeline flowsS/D balances, exports, and unmet demand by
region

19. 19
Key assumptions in optimization and result
generation
• Costs minimization is based on pre-determined typical flows and are not
based on optimized flow profiles
• Costs over which are optimized are based on 2013 levels and are not
assumed to change over time
• Connection concepts utilizing existing capacity are costed at OPEX up until
additional capacity is required
•The minimium annual volumes of flows along a connection concepts
warranting an expansion or construction of infrastructure is:
• 13 Bcf/y for pipelines
• 50 Bcf/y for Liquefaction
• 25 Bcf/y for regasification
• Unmet demand is costed at DES LNG prices

20. 20
Limitations of TIM
• Production costs are not included in optimization- only transportation cost
are considered
• Due to the circularity of costs, i.e. costs depend on flows, which are the
output of the optimization, TIM relies on a hypothetical cost number for each
connection concept
• Excel not the best optimization tool, hence solutions might not necessarily
be the global minimum solution but might be local minimum
• One iteration is not sufficient to provide insightful policy recommendations,
need to adjust and change the list of connection concepts on the basis of the
results from previous iteration

21. 21
Presentation outline
• Objective, approach and key outputs of TIM
• Detailed presentation of TIM, covering
– Assumptions
– Scenarios
– Limitations
• User manual of model, covering
– Running the model and selecting different scenarios
– Changing inputs
– Retrieving key output information
• Practical application

22. 22
Overview of model sheets
Screenshot of worksheet directory

23. 23
Running model and selecting different
scenarios
The sheet where the user can select different scenarios is the control panel,
where different connection options can be selected

24. 24
Changing input data (1/2) –
Demand/Exports/Production
To change demand, export and production scenarios, need to select
the INPUT|S_D Balance sheet and copy/paste scenarios simulated in
DASS from the ‘DASS Transfer tab’

25. 25
Changing input data (2/2) – Cost data
To change cost data and thereby change the unit transport costs used
in the iteration, change turquoise cells in ‘INPUT|Cost’ sheet

26. 26
Running optimization
TIM allows for two iterations - we focus on 1.iteration initially.
Optimization can be run from two sheets (‘Control Panel’ and
Results|Infr. Plan’)
The minimization is run by clicking on the ‘Run optimization’ button at
the top of each of the two sheets.
Keep button of ‘1.iteration’ selected for now

27. 27
Awaiting results
Optimization can take up to 10 minutes and during optimization, user
will be directed to RESULTS| Summary sheet.
The progress of the optimization can be tracked via the graphs on the
sheet, which will update every 2-3 minutes.

28. 28
Retrieving key output data and information
All key outputs are summarized in the ‘RESULTS|….’ tabs, which are
marked in green
The four key outputs have been presented in previous slides and
include:
• Infrastructure plan of additional infrastructure required
• Two maps of flows and S/D balances showing the flows implied by
the optimization
• Summary cost and throughput data

29. 29
Potential problems with results and adjusting
scenarios (1/3)
Results form an initial optimization might have the following
problems:
• low utilization of infrastructure resulting in excessively high per unit
costs
• Excess supply in some region and unmet demand in other regions
• Regions have high unmet demand as well as large outflows –
suggesting they are importing gas to send it to other regions

30. 30
Potential problems with results and adjusting
scenarios (2/3)
These problems can be reduced by adjusting the list of connection
concepts selected in further scenarios
• low utilization of connection concepts  Proposed Solution: exclude
in next run of model
• Excess supply in some region and unmet demand in other regions 
Possible solution: include connection concept between these two
regions by selecting the respective option in ‘Control Panel’ or
overwriting options
• Regions have high unmet demand as well as large outflows  This
results from the model finding a local minimum, possible solution:
generally reduce the number of connection concepts

31. 31
Potential problems with results and adjusting
scenarios (3/3)
When adjusting and comparing the results of different runs, the key
criteria is the change in ‘Volume of unmet demand’.
If unmet demand increases from one run to the next, the changes in
connection concepts selected are not improving the interregional
supply demand balance.

32. 32
Presentation outline
• Objective, approach and key outputs of TIM
• Detailed presentation of TIM, covering
– Assumptions
– Scenarios
– Limitations
• User manual of model, covering
– Running the model and selecting different scenarios
– Changing inputs
– Retrieving key output information
• Practical application

33. 33
Enabling Excel on your computer to allow for
the model to run (1/2)
Excel needs to be updated in order to allow ‘Solver’ to be run on your
computer. Follow these steps:
1. Enable Solver on your version of Excel:
• Click on the Microsoft button and click on Excel Options
• Click the Add-ins category
• In the Manage box, click Excel Add-ins, and the click Go
• In the Add-ins available box, select the check box next to Solver
Add-in and the click Ok
• Click Yes to install it
2. If you are using Excel 2007, you can now run the model. If you are
using Excel 2010, continue these steps
3. Run the optimization by clicking on ‘Run optimisation’ button in
Control panel (should not take much time)
4. Once finished, select the ‘Output|Calculation’ sheet, click on ‘Data’
and select Solver

34. 34
Enabling Excel on your computer to allow for
the model to run (2/2)
5. In the window that appears, select the GRG nonlinear option in the
dropdown menu and click on Solve
6. You can now run the optimization by clicking on ‘Run optimisation’
button in Control panel and this will give you the desired results.
7. Save the file after you’ve completed all above steps

35. 35
Practical application – Comparing results of
base case and high case scenarios
Questions to be addressed:
1. By how much does volume of unmet demand (in PV
terms) increase between base case and high case
scenario?
2. How do the infrastructure recommendations change
between high case and base case?
Approach: split attendees into two groups: one ‘base case’
group and one ‘high case’ group

36. 36
Practical application – adjusting connection
concepts to find optimal combination – Step 1
Step 1: Ensure Solver is installed on all participating
laptops
Step 2: Copy production, export and demand numbers
from DASS:
Group 1: Base Case numbers
Group 2: High case numbers
Step 3: select connection concepts listed in next slide
Step 4: run optimization

37. 37
Practical application – adjusting connection
concepts to find optimal combination – Step 1

38. 38
Practical application – Answer to question 1
Base Case: 20,018 Bcf
High Case: 40,706 Bcf

39. 39
Practical application – Answer to question 2
Base Case:
High case:

40. 40
Back up
Advanced Practical application:
How to adjust the list of connection concepts to
obtain an optimised set of infrastructure options?

41. 41
Advanced – adjusting connection concepts to
find optimal combination – Step 1
Under base case demand, export and production
assumptions, select following options and run
optimization:

42. 42
Advanced – adjusting connection concepts to
find optimal combination – Results
Results of 1. scenario are sensible (PV of unmet demand is
20,018), however two problems persist:
• high unit costs for some options (see next slide)
• Unmet demand and domestic outflows in S.
Moluccas, Central Java, East Kalimantan and C. & S
Sumatra

43. 43
Advanced – adjusting connection concepts to
find optimal combination - Step 2
On ‘Control Panel’, select button with 2. iteration to
compare costs associated with optimized profile.
Exclude those concepts with excessive unit costs

44. 44
Advanced – adjusting connection concepts to
find optimal combination - Step 3
After excluding the above options, on ‘Control
Panel’, select button with 1. iteration again and run
optimization.
Key results:
• Unmet demand stays the same
• Total infrastructure cost reduced from 53 billion US$ to
41 billion US$
• Region’s unmet demand and outflows behave in a good
manner