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Asean nations prepare to implement

Subject: Asean nations prepare to implement regional natural gas grid  project

This article puts the Yadana pipeline in the context of the Asean nation's
energy plans.

-Simon Billenness

Asean nations prepare to implement regional natural gas grid project

Planners hope eventually to extend the network to other big consumers in
Taiwan, China, Japan and South Korea. 

November 16, 1998

MANILA -- A task force headed by Malaysia will be set up to implement a
project linking several Southeast Asian natural gas fields to a grid
supplying principal customer centers in the region.

At the end of a meeting of Asean's Council on Petroleum, officials pledged
full support for promoting and achieving the Trans-Asean Gas Pipeline.

Asean -- the Association of Southeast Asian Nations -- comprises Singapore,
Malaysia, Indonesia, Thailand, the Philippines, Vietnam, Myanmar (Burma),
Laos and Brunei.

The initial concept calls for integrating the gas pipeline project with a
Trans-Asean Electricity Grid to form the Trans-Asean Energy Grid. Planners
hope in time to extend the gas network to take in other big consumers in
Taiwan, China, Japan and South Korea.

Project critical

"The project is a critical part of Asean's efforts in the development and
utilization of natural gas to reduce the region's dependence on imported
energy and allow for more diverse sources of primary energy," said a
spokesman for Malaysia's state energy monopoly Petronas.

"The task force is expected to incorporate the concept of an integrated
energy grid in developing and implementing the work programs for the
proposed project," it said.

The meeting, chaired by Hassan Marican, Petronas president and chief
executive, also agreed that the council known as Ascope be restructured to
become more business-oriented to face a challenging economic environment.
The new focus will be on Asean's pursuit of energy self-sufficiency.

Ascope's secretariat will be moved to the Malaysian capital, Kuala Lumpur,
from Jakarta, Indonesia, for the next five-year term. The next annual
meeting will be held in the Philippines in November next year.

Indonesia and Brunei are significant oil and gas producers in the region,
with smaller amounts coming from Thailand and Malaysia. The Philippines is
constantly exploring for more.

More pipeline deals

Malaysia has a new pipeline deal with Thailand. Singapore Power recently
signed a framework accord to import natural gas from Indonesia's Sumatra.
Most will be supplied by Gulf Indonesia Resources Ltd., an arm of Gulf
Canada Resources Ltd. In a deal worth billions of dollars, the company
plans to sell about 325 million cubic feet a day of gas from three
concessions in Sumatra to Singapore via a spur from the trans-Sumatran

The spur will be constructed by state utility Perusahaan Gas Negara and
largely financed by the Manila-based Asian Development Bank.

A 420-mile gas pipeline between Thailand and Myanmar was completed last
June. It links the Yadana gas fields in the Gulf of Martaban to western
Thailand's Kanchanaburi province and a power plant outside Bangkok.

France's Total began the project in 1992. It was joined by Unocal Corp. of
Los Angeles in 1993, despite calls by human rights activists to scrap the
pipeline. Unocal estimates peak export capacity of about 525 million cubic
feet a day.

Investment initiative

At a meeting in Japan last month, Asia-Pacific energy ministers endorsed an
initiative to promote investment in natural gas infrastructure. The United
States co-sponsored the move with Japan.

"At a time of the Asian financial crisis, this is not the time to turn away
from the movement for more open, transparent markets that have been the
cornerstone of growth, especially in this region," said U.S. Secretary of
Energy Bill Richardson. "Investing in energy will help the region out of
the financial crisis."

A report presented to the session warned that energy production among many
Asian countries would not keep pace with rising demand, and could increase
the region's dependence on imports.

A range of difficulties must be overcome, analysts said. Pipeline standards
and operating specifications differ among countries in the region, as do
regulations on amount carbon dioxide permitted and delivery systems.

John Akehurst, managing director of Australia's Woodside Petroleum Ltd.,
said an Asian gas grid requires a "high level of business confidence
together with close regional alignment."