PGN Business and Operations Update

Government Regulations DOWNSTREAM PIPELINE GAS PRICE Households & Small Costumers (stipulated by Regulatory Body) EMR Ministerial Regulation (PERMEN ESDM) Industry and Electricity Provider • No. 58/2017 Gas for Transportation • (stipulated by Minister)stipulated Weighted Average of End User = Cost of Gas + Infrastructure Management Cost + Trading Cost Infrastructure Management Cost Toll fee stipulated by regulatory body Gas distribution setup by: IRR 11%, 60% utilization/gas allocation & project economics Liquefaction Compression Regasification Infrastructure Management Formula = Cost of Service / Volume Cost of Service are: • Asset value • O&M • G&A • Gas Losses LNG/CNG storage & transportation Insurance ⚫ Fee • Tax and levy Trading Cost Implementation • Maximum 7% of cost of • gas Industry and Electricity provider • The maximum percentage should be shared B2B in extended gas supply chain gas price stipulated by Minister of EMR • Prevail for 5 years and open to be evaluated per annum • 18 months grace period from date of signatory (27 December 2017) EMR Ministerial Regulation (PERMEN ESDM) No. 4/2018 Transmission Segment . • Based on: gas source, market and gas infrastructure condition Segment evaluation and appointment stipulated by regulatory body Masterplan of Natural Gas Transmission and Distribution Network Facilities and Supporting Infrastructure for Gas Utilization . Minister allow consumer to build and operate an own pipeline gas and facility with consideration of gas source, availability infrastructure and unavailable demand for 5 years • The consumer will not be given gas transportation special right . • Transmission Transporter should acquired business permit including owning pipeline and facility Special right of new transmission segment will be awarded in tender mechanism or minister appointment • Downstream Gas Business Distribution and Trading Area The holder of distribution network special right will be given distribution and trading area including gas allocation from tender proposal • The special right exclusively for 30 years for new area and 15 years for existing infrastructure owner • Area tender mechanism will consider existing infrastructure and consumer Special right holder can cooperate with other to directly selling gas to end user in sub trading area Non Pipeline Trading Trader using CNG and LNG mode should acquire business permit and owning or controlling the asset • Asset categorized as LNG receiving terminal, regasification unit, compression and decompression facility, gas filling station or else • . Non Pipeline Transportation and Storage Permit for transportation and storage including: CNG or LNG transportation, CNG or LNG storage Business licencee have to own or control the facility 14

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