SEMS Research Highlights 2015: A New Strategy Development Model to Support FLNG Implementation in Indonesia

Floating Liquefied Natural Gas (FLNG), a relatively new technology in LNG industry, appears as billion dollars attraction to uncover the massive proportion of stranded natural gas reserves. Apparently, one-third of the gas reserves in the world are located in offshore, which in many cases considered to be stranded. As the growing interest to exploit and trade all available gas reserves along with the opportunity to build the offshore LNG facilities, the FLNG gives an ideal solution. FLNG is a natural gas liquefaction and storage system which is placed directly above the gas source using technology that is installed in a ship. The entire value chain of the FLNG will be shorter than the LNG supply chain in general, since it omits the transportation of natural gas via pipeline to onshore plants.

Prelude FLNG Source:http://astorship.com/en/world-largests-prelude-flng-is-the-worlds-first-floating-liquefied-natural-gas-platform/

Despite its huge positive potential impacts offered, FLNG construction in Indonesia comprises number of risks and opportunities. One of major risks in the preparation to implement FLNG technology in Indonesia is how to meet the requirements of the local content percentage. In 2013, Indonesia’s Ministry of Energy enacted a regulation of minimum local content for equipment used in the energy industry. However, the current state of local industry capacity still requires significant new development in terms of technical, engineering, and security.

A coordinated effort between relevant actors to develop the industry of FLNG development, especially for the topside structure, is also in-line with the new focus of the Government on Maritime Sector Development. Therefore, a proper multi-actor roadmap is needed to address the complexity as well as ensuring that the overall strategies can be fully understood and well implemented by all relevant parties. This would allow the government to minimize the risk of delays in the implementation and achievement of the targets.

Technology Roadmapping is a method that has been used extensively to support the development of certain types of technology. Since this research took an industrial development for FLNG implementation as a focus of the study, the roadmap is considered appropriate because it has been widely used as a planning tool in some ministries in Indonesia. However, there is a saying that goes “planning without action is futile, action without planning is fatal”. We found that a roadmap is not enough to become a planning tool for the project in this type and scale.

We proposed the integration of Technology Roadmapping and Hoshin Kanri Strategic Deployment Management. Both methods have a similarity in the importance of interactions between stakeholders to support the development and deployment of strategies and policies. Hoshin kanri is incorporated in the roadmap making to provide a clear accountability arrangement and review of the strategies with the existence of clear documentation from planning to review stage.

The proposed integration model comprises four stages process including planning, visioning, strategy and roadmap development, as well as implementation and review. In the end, the planning process would produce two main outputs that become guides in the implementation of strategies. First, a roadmap that describe the strategic plan required at a certain time period. Second, an x-matrix that translates those strategies into tactics and detailed process to achieve each result or target.

This research has managed to find a novel approach to the development of the strategy, which is conducted by integrating the approach of Technology Roadmapping and Hoshin Kanri method and serves them as a strategic planning tool. We are integrating both methods to make a more detail strategy plan that includes strategy development, deployment to all parties, and a system of periodic reviews. To this extent, the research is believed could provide a novel implication by integrating the strengths of the two methods to provide the strategic framework for industrial development in the national sector.

This research is conducted by Akhmad Hidayatno, Aziiz Sutrisno, and Wulan Maulidiah