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Investment Analysis of LNG Storage Facility Development in Indonesia

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The gas industry has had remarkable growth in recent years due to cleaner combustion, and LNG stands at the top of the gas industry as its flexibility and transportability made it an attractive option. Indonesia that has geographical advantage provides natural advantage to become a central player in the global LNG market. However, investment decisions related to new LNG storage facilities are faced with uncertainties and challenges including volatile energy markets, fluctuating LNG prices, geopolitical risks, evolving environmental regulations, and technological changes. This study assesses the feasibility of developing an LNG storage facility in Indonesia. Commercially, it is feasible due to growing LNG demand and Indonesia’s strategic advantages. An LNG storage facility with 180.000 m³ capacity is feasible, showing an NPV of $33.7 million, an IRR of 10.96%, a payback period of 14.61 years, and a Profitability Index (PI) of 1.26. Increasing the tank capacity to 200.000 m³ improves feasibility with an NPV of $44.3 million, an IRR of 11.61%, a payback period of 13.67 years, and a PI of 1.32. Integrating with existing infrastructure further enhances feasibility, yielding an NPV of $77.7 million, an IRR of 14.10%, a payback period of 11.04 years, and a PI of 1.56.

Determining of Well Drilling Sequence for Investment Analysis using Monte Carlo Simulation in Upstream Oil and Gas Company in East Kalimantan, Indonesia

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Electrical construction company that experienced in making Well Head Control Panels (WHCP) has difficulties to decide acceptance of investment in WHCP contracts raised with their client in upstream oil and gas company. The difficulty mostly due to uncertainty of client well drilling sequence. The electrical construction company need to financial investment analysis includes material purchasing, shipping, fabrication and delivery of WHCPs need to be done to make sure they make a profit. It is crucial for electrical construction company used correct forecasting method to determine schedule of client’s request. Monte carlo forecasting method is used to predict the well drilling sequence. The well drilling sequence data for 12 months is used to determine 24 months well drilling sequence operation with result 179 wells with normal distribution and 167 wells with triangular distribution.

Strategic Business Development Plan for a New Cardiovascular Clinic (Case Study: PT Hasna Medika, Expansion in Bali Area)

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PT Hasna Medika is a company managing multiple cardiovascular health facilities such as clinics and hospitals in Indonesia. As of the writing of this research, the company has 5 cardiovascular clinics and 2 cardiovascular hospitals in Java. As a strategic partner of the BPJS Kesehatan or the national health coverage in Indonesia, Hasna Medika seeks to contribute to the improvement of heart health facilities in Tier 2 and Tier 3 cities throughout Indonesia, where they have a huge gap between the number of secondary healthcare facilities providing heart health services with the population needing it. Thus, the company is now looking to expand its business operation to the island province of Bali, where they have received support from the local cardiologists. Several locations have been proposed and Kabupaten Karangasem in the east of Bali has been chosen as the location for the newly planned heart clinic. The weighted score has shown that Karangasem has yielded the highest score of 3.05 after analysing several factors such as the chance to establish cooperation with BPJS, the ratio of secondary health facilities to the number of populations, the demography and availability of cardiologists in the area. Subsequently, the financial projections are supported by data based on the other existing Hasna Medika branches have shown a feasible project. NPV which is greater than 0 and IRR above the WACC are also obtained as indicators of project viability. That said, The US Index of 1.94 has also been calculated, which signifies a desirable and maximised loan financing. Lastly, a funding composition of 80 % loan and 20% equity has yielded maximum profit. The clinic is targeted to start construction next year in April 2023 and will take approximately 9 months until completion.

Strategic Investment Analysis for the Gas Station Projects Using Build Operate and Transfer (Case Study: PT Pertamina, Besakih Bali)

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One of deployment planning from Pertamina is Besakih area in Bali. In this simple requirement, Pertamina need a further study to plan which type of gas stations will be implemented, COCO (Company Own Compant Operate) or DODO (Dealer Own Dealer Operate). COCO was found to be the viable option because DODO facing a major challenge based on the PESTLE and SWOT which is an issue related to government attitude towards greener technology such as electric vehicle.  A several options for funding have been identified and well documented with several restrictions which are equity, loan, venture capital, and build operate transfer. If Pertamina need a new gas stations in terms of only 20% coming from capital (80% loan). Pertamina is not entitled to fund by venture capital as Pertamina is a state own company with rigid regulation. For the deployment of new gas station, the most expensive part is the land, therefore searching the solution through land funding is the most viable option. It was found that the strategy build, operate, and transfer (BOT) is a very interesting option. For the Pertamina, it erases the necessity for buying the land, on the other hand, for the land owner, it is better that their land could be useful for them in the next 15 years before they are getting all the facility transferred. The payback period is only 3,36 years with the IRR of 27,03% which is higher than the WACC. In case of Pertamina taking 80% loan and 20% equity, the NPV will return in the 5th year in start of the investment or 4th year in start of the operation. This strategy opens up new opportunities and solution for the business because it writes out land CAPEX necessity.