ASEAN to sign gas pipeline project pact in July: Report

Members of the Association of South-East Asian nations (ASEAN) are expected to sign an agreement in July to realise its Trans Asean Gas Pipeline project which will link gas supply centres to demand within the region, Malysia's newspaper New Strait Times reported on Friday.

The South-East Asian states are putting together the pieces of a RM22.8 billion (US$1 = RM3.80) gas pipeline network that will harness the region?s rich reserves and alleviate dependence on imported oil.

An official of the Philippines Department of Energy said Asean members will sign the agreement when their energy ministers meet in Bali.

?A special task force has been set up to make sure everything is ready to sign a memorandum of understanding when the Asean Ministers on Energy Meeting convenes in July,? he said.

It was reported last month that ASEAN members were working on a framework to cooperate on the Trans Asean Gas Pipeline project. The ASEAN Council for Petroleum (ASCOPE) is overseeing the project which will develop energy supplies for the region.

At its meeting in Kuala Lumpur in November last year, Ascope indicated the Trans Asean Gas Pipeline would be completed by 2005. All Asean members are represented in Ascope.

It is understood that the proposed 10,000km grid comprises five main components to connect Malaysia and Thailand; Indonesia and Malaysia; Myanmar and Thailand; Indonesia and Singapore; and Malampaya and Sabah.

About 2,540km of ASEAN cross-border pipelines are already in place between Malaysia and Singapore, Myanmar and Thailand, and Indonesia and Singapore.

The link-up was first used last January when gas from Indonesia was transported to Singapore via a US$1.5 billion Indonesia-Singapore pipeline.

The Trans Asean Gas Pipeline plan ? linking supply to demand centres in Malaysia, Singapore, Indonesia, the Philippines, Myanmar, Vietnam and Thailand ? was first proposed in 1996 with a US$15 billion price tag. Five years on, the plan had been downsized and proposed investment slashed by more than half.

The Asia-Pacific region contains 10.33 trillion cu m (tcm) of proven gas reserves, or just under 7 per cent of the world?s total, according to the 2001 issue of the BP Statistical Review.

Malaysia and Indonesia hold the largest single reserves at 2.31 and 2.05 tcm respectively, about 42 per cent of the regional total.

Under a plan, seven pipeline projects are slated for commissioning between 2002 and 2016 with Indonesia?s Natuna gas fields in the South China Sea playing a central role.

Major links will include a line from East Natuna to Erawan, Thailand via the Joint Development Area (JDA) in the Gulf of Thailand and a pipeline from East Natuna to Kerteh, Malaysia, via the West Natuna field.

West Natuna will also be connected to Malaysia via a pipeline to the offshore Duyong gas facility. The JDA is slated to link Vietnam?s Block B gas field in the Gulf of Thailand.

The longest development will be a 1,540km pipeline from East Natuna to Luzon, the Philippines via Sabah in East Malaysia and the Malampaya field off the island of Palawan in the Philippines.

Malaysia and Indonesia will also be linked by a short line from Duri, South Sumatra to Malacca, and also by one from Pauh to Arun, Indonesia.

East Natuna, the largest gas field in South-East Asia with estimated gas reserves of 46 trillion cu ft (1.3 tcm), is the key to the future of the Trans Asean grid.

East Natuna reserves include a high content of carbon dioxide, which has to be pumped back into the ground after separation, making gas recovery expensive.

Regional state energy companies, such as Malaysia?s Petronas and Indonesia?s Pertamina, will also play a major role in turning the Trans Asean plan into a reality.(*)