Bangkok Post: PTT will adhere t

[suriya@xxxxxxxxxxxx]

April 15, 1998


                                     



                   ENERGY / YADANA GAS PURCHASES 

              PTT will adhere to
              contract 

              Pala denies any changes in light of
              lower demand 

              Boonsong Kositchotethana 

              The head of the Petroleum Authority of Thailand has pledged to
              honour the 30-year gas purchase contract made with the Yadana
              consortium, ruling out any lowering of the agreed gas delivery
              volume and the price.

              "We cannot change the established deal [for the Yadana gas
              supply from Burma]," PTT governor Pala Sookawesh said,
              countering suggestions that the Thai state oil company was
              moving to amend the contract because of lower gas demand in
              Thailand and the country's economic crisis.

              The contract signed in 1995 committed the PTT to taking an
              average of 525 million cubic feet per day (MMcfd) of gas from
              the group led by Total of France starting in July this year at the
              base price of US$3 per one million British thermal unit (BTU).

              Piti Yimprasert, president of PTT Gas, part of the PTT, was
              quoted as saying earlier that the delay in the construction of the
              Ratchaburi power house, which would use much of the Yadana
              gas, as well as the slower growth in the country's electricity
              consumption, might reduce immediate demand for Yadana gas to
              325-400 MMcfd.

              At least for the time being, it is clear that construction of the first
              two units of the Ratchaburi power plant will not be ready to take
              the Yadana gas in July as planned. This may also prompt the
              PTT to ask the Yadana developing group to delay in start-up of
              gas delivery beyond July, may be by one or two months, senior
              PTT officials said.

              Discussions are expected to be held with the Yadana group
              consisting of Total (holding a 31.24% stake in Yadana), the US
              energy firm Unocal Corp (28.26%), PTT Exploration &
              Production Plc of Thailand (25.5%) and Burmese state-owned
              Myanma Oil & Gas Enterprise (15%) about delaying gas
              delivery.

              However, under the accord with the Total alliance, PTT needs to
              gradually raise its offtake of Yadana gas to the plateau level of
              525 MMcfd only 15 months after the production start-up in
              August this year. There is an option for a 15% "swing" increase
              in the plateau level if PTT so required.

              The Electricity Generating Authority of Thailand has deliberately
              delayed the construction of 4,600-km Ratchaburi power station
              in anticipation of the delay in the completion of the Thai section
              of the Yadana gas line, stretching 260 km from the
              Thai-Burmese border at Ban I Tong, Kanchanaburi, to the plant.

              The commissioning of the first two 200-megawatt gas turbines of
              the Ratchaburi plant is now expected to come on line in
              September and October this year.

              Protests by environmentalists and non-government organisations
              in Thailand against PTT's Yadana gas line have delayed
              pipe-laying.

              The Kanchanaburi-Ratchaburi pipeline has faced opposition
              because a six-km section of the line will be laid through the fertile
              forest in Kanchanaburi. Opponents had in the past few months
              camped out at the forest, specifically at pipeline kilometre posts
              27 to 29, to obstruct the pipe-laying.

              The pipe laying contractor - the Thai-German joint venture of
              Tasco-Mannessmann - has now claimed an additional payment
              of US$40 million from PTT since it failed to make the
              arrangement for it to complete the works as scheduled. The
              claim would push the pipeline project cost beyond the budget of
              of 16.5 billion baht.

              On March 6, Thai police led by Kanchanaburi governor Direk
              Uthaiphol arrested anti-pipeline campaigner Sulak Sivaraksa and
              about 50 demonstrators, mostly students, who were blocking the
              pipeline construction staging a sit-in at the affected forest at KP
              28.

              The protesters were dispersed and local authorities moved in to
              secure the site. Mr Sulak started his sit-in protest shortly after
              Prime Minister Chuan Leekpai on February 29 gave a verdict
              that laying of the pipeline must continue and other
              conservationists be moved out from the protest site. 

              With the site cleared, the PTT's pipe-laying contractor is now
              catching up with the lost time and the state enterprise says it is
              reasonably confident of completing pipe-laying in July.




                                     




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