PRESS STATEMENT - APEC supports KADIN's proposal to speed up the implementation of the Asia Gas Grid

The APEC Partnership for Equitable Growth (PEG) issued a statement today supporting the call by Indonesian Chambers of Commerce and Industry (KADIN) to speed up the implementation of the Asia Gas Grid. This statement was issued following meetings with the energy leaders from China, Indonesia, India and OPEC, held in conjunction with the Second Indonesia International Oil & Gas Exhibition and Conference (IIOGE 2000). The meetings was attended by leading personalities including H.E. Dr Rilwunan Lukman, the Secretary General of OPEC, H.E. Dr Wang Tao, Senior Vice President of the World Petroleum Congress, the Minister of Mines and Energy of Indonesia, the Minister of Resources and Energy of India, and top CEOs from numerous oil & gas Companies including the China National Petroleum Company, Pertamina, BP-Amoco and others.

Dr Shafig Sit Abdullah, CEO of the APEC PEG echoed the call by the Chairman of the KADIN, Mr Aburizal Bakrie, on the immediate utilisation of Indonesia's hydrocarbon resource to help stabilise the country's economy amid globalisation and domestic economic pressures. "The point made by Mr Aburizal Bakrie is excellent. Proper implementation of the Asia Gas Grid to utilise the rich gas resource of Natuna will no doubt lift Indonesia from its current predicament and alleviate the financial burden of millions of Indonesians still hurting from the economic crisis," said Dr Shafiq.

"Indeed, globalisation will mean nothing good for Indonesia if the relevant parties do not take advantage of its supposed reduction of barriers to greater trade and investments. Given that Indonesia is in a process of recovery from the recent economic crisis and that China is in need for cleaner forms of energy to stave. Off a pollution crisis by 2005, the Trans Asia Gas Grid will achieve these two very important objectives with far reaching benefits to the billions of peoples of Indonesia, China and other Asian countries," added Dr Shafig.

The Trans Asia Gas Grid, spanning from Natuna Alpha D to the main coastal cities of China, was first introduced by the PEG in 1998 and was welcomed by the APEC Leaders at their summit meeting in Kuala Lumpur. President Ziang Zemin had spoken highly of the importance of this gas grid to help alleviate both the energy demand and pollution issues (as China is a signatory to the Kyoto Protocol) in the PRC.

"Significantly, the rich resource of Natuna Alpha D remains stuck in the ground at a time when Indonesia needs revenue and funding to recover economically. It is calculated that the sale of gas from Natuna through this pipeline alone will bring in an approx. US$ 30 - 35 billion over the next thirty years for Indonesia," added Dr Shafiq.

"Aside from the noble objective of spearheading Indonesia's economic recovery, it is important to note that the technology is available to implement this project and that the commercial considerations will yield positive returns to the investors. This gas grid is shorter than the Trans Siberian pipeline and will yield higher returns and greater spin-offs," said Dr Shatiq.

Discussion at the Roundtable also focused on the role of PEG and how the PRC and Indonesia should table the Trans Asia Gas Grid as a high priority item at the forthcoming APEC Leaders Meeting in Brunei later in November this year.

"It is vital that the different constituencies i.e. the seller of gas, the buyer of gas and the investors of the pipeline come together and work with the PEG, mandated by APEC Leaders to follow up on this project, in order to table the implementation plans sooner, and formally, for a decision when the APEC Leaders meet in Beijing in 2001," added Dr Shafiq.

"It is important to recognise that this Asia Gas Grid does not necessarily need the approval of APEC per se. It could well be primarily a bilateral arrangement between the PRC and Indonesia. It only happens that the blueprint and intellectual content for the feasibility studies rest with the PEG. But this does not guarantee APEC anything. APEC needs to move to remain relevant on even this project," stressed Dr Shafiq.

The PEG is a non-profit organization, modeled after smart partnership as the basis to move public-private sector initiatives within APEC forward. Formed in 1998, the PEG is headquartered in Kuala Lumpur and its founding patron is the Prime Minister of Malaysia, Dato' Seri Dr Mahathir Mohamad. (*)