ASEAN's Real Interest in Burma, Gas

[brelief@xxxxxxx]

Subject: ASEAN's Real Interest in Burma, Gas Pipelines

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INTERNATIONAL HERALD TRIBUNE, 
FRIDAY, JULY 5, 1996

ASIA / PACIFIC

Linking Up Southeast Asia
Pipeline Builders See Growing Opportunities

By Michael Richardson


SINGAPORE Growing demand for natural gas in
Southeast Asia is creating billions of dollars
of opportunities for companies involved in gas
pipeline construction. 

Energy ministers of ASEAN, the Association of
South East Asian Nations, meeting recently in
Kuala Lumpur, concluded that a long-touted
plan for a regional gas-transmission system
could now become a reality. 

One group of international consultants has
estimated that a pipeline linking all seven
ASEAN members   --  Brunei, Indonesia,
Malaysia, the Philippines Singapore, Thailand
and Vietnam -- would cost about $ 15 billion
to complete. It would run on the seabed as
well as on land, evolving largely in response
to market forces as countries make increasing
use of gas to fuel heavy industrial
enterprises such as cement and fertilizer
plants and pipe into homes for cooking. 

Companies involved in the manufacture and
laying of gas pipelines in Asia include
Bechtel Corp. of the United States, Bouygues
Offshore of France, PT Bakrie Pipe Industries
of Indonesia, NOVA Gas International Ltd. of
Canada and Nippon Steel Corp. of Japan. The
ASEAN energy ministers said that they had
agreed to encourage the private sector to
"participate in the linking of the proposed
Trans - ASEAN Gas Pipe System, which has been
found to be feasible." 

Opening the meeting, Anwar Ibrahim, Malaysia's
deputy prime minister, said that demand for
gas in the ASEAN market was forecast to rise
nearly sevenfold to 150 million tons of oil
equivalent a year in 2020 from 23 million tons
today. As a result, there is an increasing
need for a region wide pipeline, he added. 

The only international gas pipeline in
Southeast Asia now is between Malaysia and
Singapore. About 150 million cubic feet of gas
from fields off the east coast of peninsular
Malaysia is piped to Singapore daily under a
15-year contract that expires in 2007. The gas
is used for power generation. 

But Thailand and Burma have signed an
agreement to pipe gas from at least two major
fields in Burmese waters in the Gulf of
Martaban to the shore and then overland to
Thailand, where it will also be used to
generate electricity. The onshore section of
the pipeline will be approximately 260
kilometers (160 miles) in length and is
expected to be completed by mid - 1998. 

It will be "a critical piece of natural gas
transportation infrastructure that will play
an important role in increasing gas
utilization in Southeast Asia," said Harry Van
Zeist, vice president Asia Pacific of NOVA
Gas. NOVA and OGP Technical Services Sdn. of
Malaysia this year won the engineering
procurement and construction management
contract for the pipeline. 

Malaysia, which is the most advanced of the
ASEAN countries in making full commercial use
of gas, plans to complete a transpeninsular
pipeline by the year 2000, when an existing
network from the northeast coast down to
Singapore is extended up the west coast to the
border with Thailand. 

However, other ASEAN members are developing or
expanding their onshore and offshore pipeline
systems to tap newfound gas reserves, lessen
dependence on oil and coal, and exploit a
pollution-free fuel. 

Indonesia, for example, has said it will run
gas pipelines from fields in south Sumatra to
Batam Island near Singapore and to Java, the
country's most densely populated island and
main center for industry and commerce. 

All ASEAN countries, except Singapore, have
extensive gas reserves, most of them in
offshore fields that are already linked to
shore-based processing facilities by seabed
pipelines. 

The region wide pipeline project " will allow
ASEAN to share resources and use them
efficiently, " said Leo Moggie, Malaysia's
energy minister. "But this project can only be
implemented on a segment by-segment basis, as
and when the need arises. " 

Analysts said that development of Indonesia's
giant Natuna gas field in the South China Sea
was likely to hasten completion of some of the
main missing links in the regional gas grid. 
The Natuna field, being developed by
Indonesia's state petroleum company,
Pertamina, and Exxon Corp. of the United
States at an estimated cost of $42 billion is
scheduled to begin shipments of liquefied
natural gas to Japan, South Korea and Taiwan
by 2005. But Indonesia wants to pipe some of
the gas to a large LNG plant in Sumatra that
will be running short of gas for processing by
then. 

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