Petronas eyes stake in East Natuna?s gas

Malaysian state oil and gas company Petronas has voiced interest in acquiring a stake in the giant gas reserve in the East Natuna area in the South China Sea, as it considers the gas reserve will become the backbone for the future ASEAN gas grid, according Indonesian state oil and gas company Pertamina.

Pertamina?s president Baihaki Hakim said the interest had been expressed during the recent ASEAN Council on Petroleum?s (ASCOPE) Conference in Kuala Lumpur.

?We shall hold further discussions on the matter,? Baihaki told Petromindo.Com on Wednesday.

The D Alpha block, also known as Block A, situated east of the Natuna islands, is considered one of the world?s largest gas field with estimated gas reserves of 222 trillion cubic feet, including 46 trillion cubic feet of recoverable gas. But the field contains 71 percent of carbon dioxide, which complicates the development and increases costs.

ExxonMobil, through its subsidiaries Exxon Natuna Inc. and Mobil Natuna Inc., holds 76 percent interest in the block, with Pertamina holding the rest.

Malaysia has long been campaigning for the development of a gas grid linking the ten South East Asian nations grouped in ASEAN.

Mohd Farid Mohd Amin, chief coordinator of the trans-ASEAN Gas Pipeline taskforce, recently said the project was still on track despite the global economic slowdown.

He said during the ASCOPE conference that the 4,000 kilometer gas grid would be completed in 2015 at an estimated cost of US$7 billion, excluding drilling.

Aside from Malaysia, Thailand is also interested in the East Natuna gas project.

During the visit of former President Abdurrahman Wahid to Thailand in May this year, the Thai and Indonesian governments signed an agreement to revive the deal to pipe natural gas from the gas field to Thailand.

Under the joint Protocol Relating to Economic Trade and Tourism Cooperation, the two sides said a memorandum of understanding for the East Natuna gas will be finalized ?after 2003? and first gas is expected in 2013.

The two sides will establish a joint working group to study gas marketing, gas sources and the transportation of the gas via pipeline.

Thailand has long voiced interest in the project of importing gas from the East Natuna field but it dropped the plan in 1997 amid the economic crisis. (Alex/Godang)