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Port Development & Expansion Asia 2013 Greenfield Port Construction – case study Karimun / Riau Province
04 December | 2013
Port Development & Expansion Asia 2013 Page | 2
I. OUR COMPANY
II. THE POTENTIAL OF INDONESIA
III. REGULATORY CHALLENGES
IV. SITE SELECTION
V. PT OILTANKING KARIMUN
VI. CLOSING
OVERVIEW
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MARQUARD & BAHLS
I. OUR COMPANY
MARQUARD & BAHLS GROUP
More than 60 years in the international
and energy business
Key services encompassing oil trading,
tank terminal storage, aviation fuelling
and renewable energies
Headquartered in Hamburg and strategic
business presence in many parts of
Europe, The Americas, Africa & Asia
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Marquard & Bahls Group
MARQUARD & BAHLS
Quality
Management
Marquard & Bahls AG
Tank Storage
Bunker Service
Retail Services
Aviation Service
Oil Trading
Biogas Solutions
Shareholdings
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MARQUARD & BAHLS
Turnover (excluding petroleum tax) 17.1 billion EURO
Oil Trading Sales 22 million MT
Tank Capacity 20.2 million CBM
Tank Terminal Throughput 170.7 million MT
Employees 8,560
Key Figures FY 2012
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I. OUR COMPANY
OILTANKING GROUP
An independent logistic service provider to
the oil and chemical industry
Specialized in tank storage and related
services
Storage and handling of dry bulk (UBT)
OILTANKING GROUP
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OILTANKING GROUP
Our business includes:
Storing and handling bulk liquids & solids
Building and operating single and multi-users terminals
Managing logistic infrastructure
Providing uncommon customer service along with high
operational integrity
I. OUR COMPANY
OILTANKING GROUP
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Tank Terminal & Port Network: Asia Pacific
Singapore (Chemical) Storage: 388,000 cbm
TANK TERMINAL NETWORK
Oil Terminal
Chemical Terminal
National Terminal Network
Representative Office
New project
Singapore (Petroleum) Storage: 1,870,000 cbm
Daya Bay, China Storage: 97,000 cbm
Nanjing, China Storage: 151,000 cbm
Merak, Java Indonesia Storage: 289,000 cbm
Karimun, Riau Indonesia Storage: 760,000 cbm
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THE INDONESIAN MARKET
II. THE POTENTIAL OF INDONESIA
Population – 250.5 mln
(est 2013)
GDP (2012) – US$878b
GDP Growth – 6%
2008 : 6.0%
2009 : 4.6%
2010 : 6.1%
2011: 6.5%
2012: 6.2%
Per Capita (2010) – US$3,557
Unemployment Rate
2007 : 12.5%
2008 : 9.1%
2009 : 8.4%
2010 : 7.7%
2011: 6.6%
2012: 6.1%
Refining Industry
11 Refineries/1,165kbpd
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II. THE POTENTIAL OF INDONESIA
Indonesia offers:
Young and growing population
Growing economy and wealth
Increase in energy consumption
Market entry for foreign companies to sell petroleum fuels
THE INDONESIAN MARKET
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FUEL CONSUMPTION FORECAST
Max Domestic
Production:
40 million kl
(w/o future refineries)
60m 64m
76m
92m
107m
127m
+43.3%
FUEL CONSUMPTION
Source: Ministry of Energy & Mineral Resources
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DOMESTIC AUTO MARKET SALES (6-YEAR TREND)
Source: Gaikindo, * total 2013 own estimate with extrapolation from real data Jan-Sep 2013
433,341
483,548
764,710
813,856
603,774
AUTO MARKET
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REFINING CAPACITIES
II. THE POTENTIAL OF INDONESIA
Refining Capacities:
Now, Indonesia has 11 refineries
(ranging from 3.8 kbpd to 340 kbpd)
Designed capacity of 1.165m bpd but
actual main fuel production only approx
663k bpd (as per Pertamina’s annual report 2012)
Pertamina runs 5 of the largest refineries
Shell, Total and Petronas are developing
retail stations network
Clean Petroleum Product import terminals
mostly controlled by Pertamina
Shortage of Clean Petroleum Product
import terminals and ports, particularly in
Sumatra, Kalimantan and East Java
Company & Site CDUPT. Pertamina
Pangkalan Brandan* 4.5
Dumai 127.0
Sungai Pakning 50.0
Musi 127.3
Cilacap 348.0
Balikpapan 260.0
Balongan 125.0
Kasim 10.0
Non-PertaminaTPPI 100.0
Tri Wahana U 10.0
Pusdiklat Migas 3.8
Total 1,165.6
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LAWS & REGULATIONS
III. REGULATORY CHALLENGES
Petroleum Market
BPH Migas / Downstream Regulatory Body of Oil & Gas
Deregulation of the downstream industry (Y2004 - …….)
Cutting of fuel subsidies
Free market access
Fair level playing field
Without deregulation
Fuel supply risk likely to increase
Potential bottlenecks in future expected (demand > supply)
Heavy burden on state budget remains
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BUSINESS ENTITY
III. REGULATORY CHALLENGES
Business License for Tank Terminalling
To rightly select business license which determines the type of
business allowed
Thus, the issue is selecting suitable business line for warehousing
liquid
Oil & Gas supporting services vs downstream Oil & Gas activities
Different views by different ministries
Urgent need for clarification by leading ministries (BKPM &
Directorate General of Oil & Gas)
Role of BKPM should be in line or integrated with other
departments such as Migas, BPH Migas, Customs and National
Trade
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SEA COMMUNICATION
III. REGULATORY CHALLENGES
Sea & Port
Adpel and local Port Master position merged into the new post of
Port Administrator
Considered more investor / operator friendly
Better coordination between local and national level expected
Local port service providers (BUP’s)
Regulation requires BUP to handle loading & unloading of cargo
Expertise for handling dangerous cargoes ?
BUPs have to work together with PELINDO as they have the expertise and equipment
International Maritime Organization (IMO) only acknowledges PELINDO as reputable port service provider
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SEA COMMUNICATION
III. REGULATORY CHALLENGES
Sea & Port
Cabotage rules
Only Indonesian vessels can load cargo from domestic port and
discharge at another domestic port
Permits NO LONGER given to foreign fleet oil tankers for domestic
trade
Hence, owners and charterers need to employ only Indonesian
vessels
Issues:
Less flexibility for cargo owners
Availability of vessels
Competitive pricing
Attraction of investors likely to suffer
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SEA COMMUNICATION
III. REGULATORY CHALLENGES
Sea & Port
Jetty permit (TUKS) for construction cum
operation
Investors to consider long permit
processing time into project scheduling
Adds uncertainty into a project
schedule/business case
TUKS versus appointed port in Free Trade
Zone area
Suitability of government appointed ports
to be reviewed
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III. REGULATORY CHALLENGES
Operations
Bonded warehouse limitations outside of FTZ areas
Segregation of import & export tanks required in order to enjoy duty exemption
Not flexible and attractive for our customers
Not in line with international bonded warehouse practices
Local permits
National guidelines / regulations very broad
Permit duplication to suit both local and national level.
Eg. 1 - For fuel trade where BPH Migas collects a fee as well as local government (Pemda)
Eg. 2 - Storage license from Migas as well as depo permit from local level required
TERMINAL & PORT OPERATIONS
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III. REGULATORY CHALLENGES
Operations
Ever changing permit requirements
Adds uncertainty into business planning
Discomforts shareholders
Makes investments in Indonesia less attractive
TERMINAL & PORT OPERATIONS
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IN SUMMARY
III. REGULATORY CHALLENGES
In Summary
Implementation and integration of regulations can be still
improved
Inter-departmental corporation should be encouraged
Strive for STRONGER TOGETHER by closer corporation between
national and local level as well as investors
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IV. SITE SELECTION
LOCATION
Criteria
THE right location
Feasibility of bonded warehouse / FTZ benefits
Land price
Deep-water access suitable for business case
Geotechnical conditions
Plot accessibility and sufficiency of public road infrastructure
Power and utility availability
Security on & offshore
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IV. SITE SELECTION
LOCATION
Marine Environmental Factors
Wind and waves
Seismic and Tsunami risks
Tides and currents
Fishing grounds
Feasibility of dredging
Sedimentation tendency and trend
Underwater pipelines and cables
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PORT OF KARIMUN
V. PT OILTANKING KARIMUN
Riau Province
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V. PT OILTANKING KARIMUN
Riau Province
PORT OF KARIMUN
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V. PT OILTANKING KARIMUN
Port Features – Highlights
Close proximity to Singapore oil hub
Part of the so called Greater Singapore Area recognized by Platt’s*
Strategically located along the Malacca Straits, the major oil route
from west to east
Post dredging water depth of -21mCD suitable for very large crude oil
vessels (VLCC)
Port services available (PELINDO I)
However, there is no established shipping channel yet to connect from
the Malacca Straits to our proposed jetty infrastructure…
*energy information & benchmark pricing assessment company
PORT OF KARIMUN
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Route 1
PORT OF KARIMUN
Route Distance
(KM)
Distance (Nautical
Miles)
1 29 15.7
2 15 8.1
Route 2
V. PT OILTANKING KARIMUN
Proposed
Design Basis for Route 1
DWT = 320,000
LOA = 333m
Breadth = 60m
Max allowable draft of vessel = Water depth available minus 10% UKC
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Parameter Formulae Remark
Design depth 1.1 x D UKC = 10%D
Width for 1-way traffic 5 x B Minimum
Width for 2-way traffic 10 x B Minimum
Diameter of turning basin 2 x L Minimum
Requirement on the channel navigational design based on recommendation
from PIANC:
D = Draft of vessel in metres
B = Beam of vessel in metres
UKC = Under Keel Clearance
PIANC = Permanent International Association of Navigation Congresses
PORT OF KARIMUN
V. PT OILTANKING KARIMUN
Port Development & Expansion Asia 2013 Page | 29
V. PT OILTANKING KARIMUN
Tanker Size
Definition
Deadweight
Tonnage
(dwt)
Length
Overall
(L)
Beam
(B)
Fully Laden
Draft
(D)
Design Depth
Required
(1.1D)
Small 15,000 150 22 9.0 9.9
Handymax 45,000 223 30 11.2 12.3
Panamax 75,000 250 36 13.6 15.0
Aframax 120,000 290 43 15.6 17.2
Suezmax 135,000 300 45 16.3 17.9
Suezmax 160,000 320 46 17.0 18.7
VLCC 200,000 325 50 18.0 19.8
VLCC 320,000 335 52 20.0 22.0
Typical Petroleum Tanker Dimensions
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PORT OF KARIMUN
V. PT OILTANKING KARIMUN
Straits of Malacca
Straits junction and pilot boarding ground
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V. PT OILTANKING KARIMUN
Issues encountered
Regulation No. PM 68 of Y2011 regarding ship channels states clearly
that government is supposed to provide and maintain shipping
channels but reality is that investors have to take action and provide
funding for:
AMDAL and dredging & dumping permits
Initial dredging scope
Annual channel bathymetric survey
Any maintenance dredging required thereafter
Provision, installation and maintenance of navigational aids
Consequence Competitive Disadvantage
PORT OF KARIMUN
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PORT OF KARIMUN
V. PT OILTANKING KARIMUN
Proposed Jetty Capacities
Jetty Dwt LOA Design Depth
Required Water Depth
Available
1 75,000 240m -14mCD -18mCD
2 320,000 320m -25mCD -22mCD
3 15,000 150m -10mCD -16mCD
4 120,000 290m -17mCD -20mCD
Port Development & Expansion Asia 2013 Page | 33
VLCC
Aframax
Panamax
15,000 dwt
PORT OF KARIMUN
PHASE 1
PHASE 2
option land
V. PT OILTANKING KARIMUN
Port Development & Expansion Asia 2013 Page | 34
PORT OF KARIMUN
V. PT OILTANKING KARIMUN
Terminal Characteristics
Functions:
Import and Export by ship
Regional break bulk services
Break bulk services for Indonesia at large
International cargo trading terminal
Product range:
• Crude Oil
• Fuel Oil
• Gasoil
• Gasoline & Naphtha
• Gasoil & Diesel
• Jet Fuel & Kerosin
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PORT OF KARIMUN
V. PT OILTANKING KARIMUN
Terminal Characteristics
Services
Storage in Free Trade Zone area
Break bulk capabilities
Redelivery to vessels/barges
Ship-to-ship transfer
Tank-to-tank transfer
Blending to specification
Additivation & dying
Circulation & homogenization
Heating of products (if required)
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PORT OF KARIMUN
V. PT OILTANKING KARIMUN
Tank Capacities
30 units of bulk storage tanks
Size range from 5,000cbm to 60,000cbm
Total capacity of 760,000 cbm
Port Development & Expansion Asia 2013 Page | 37
V. PT OILTANKING KARIMUN
Performance Enhancements
VLCC capabilities in addition to Singapore port
HFO & crude oil handling
Creating economies of scale
Higher unloading & loading flow rates
Faster ship turn-around
Minimizing ship demurrage
Better utilization of onshore as well as
port assets
Dedicated pipeline concept
Lower risk of product contamination
Less downtime and resulting in higher
availability of infrastructure
PORT OF KARIMUN
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VI. CLOSING
Take away’s
Deregulation of the Oil & Gas downstream industry still in progress
Permitting & licensing to be simplified
Increase in fuel consumption expected
Increase in product imports required to match future demand
Shortage of bulk tank storage facilities
Indonesia as alternative storage place for oil trading community
Demand for petroleum storage terminals
Demand for port facilities to feed terminals