Thailand to settle Burma gas disput

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Subject: Thailand to settle Burma gas dispute


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Financial Times 30/07/99

Thailand to settle Burma gas dispute
By Ted Bardacke in Bangkok
 .......................................................
The state-owned Petroleum Authority of Thailand (PTT) has agreed to pay
about $5lm to a consortium developing the Yadana offshore natural gas
field in Burma for gas it had agreed to buy last year but did not take,
according to officials close to the deal.
The agreement, which resolves a long-standing dispute between PTT and
the consortium led by Total of France, Unocal of the US and the
state-owned Myanmar Oil and Gas Enterprise, reduces PTT's liabilities
for gas deliveries in 1998 from an original $62m but maintains the
structure of the purchase contract with the $1bn project.  Thus PTT will
continue to be responsible for 1999 payments even though it may not be
able to receive the gas until sometime next year. PTT was required to
take at least 65m cubic feet per day of gas beginning in August of last
year but so far has only taken 5m cubic feet per day due to delays by
the Electricity Generating Authority of Thailand in the construction of
the Ratchaburi power plant which will use the gas.  It is unclear when
the Ratchaburi plant, which is subject to a politically explosive
privatisation process, will be commissioned.
Delays in the payment by PTT have been holding up a riumber of projects
inside Burma, particularly a muchneeded combined power plant and
fertiliser production facility being developed by Unocal and Mitsui of
Japan. Although the financially strapped Burmese government does not
have the money to build the facility, lenders backed by the Yadana
consortium have indicated a willingness to finance the project once a
steady stream of cash from the gas project was secured.  Cash flow is
likely to remain elusive until Ratchaburi is completed and PTT has an
end source for the gas.




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Financial Times 30/07/99 

Thailand to settle Burma gas dispute 
By Ted Bardacke in Bangkok 
 ....................................................... 
The state-owned Petroleum Authority of Thailand (PTT) has agreed to pay about
$5lm to a consortium developing the Yadana offshore natural gas field in Burma
for gas it had agreed to buy last year but did not take, according to
officials
close to the deal. 
The agreement, which resolves a long-standing dispute between PTT and the
consortium led by Total of France, Unocal of the US and the state-owned
Myanmar
Oil and Gas Enterprise, reduces PTT's liabilities for gas deliveries in 1998
from an original $62m but maintains the structure of the purchase contract
with
the $1bn project.  Thus PTT will continue to be responsible for 1999 payments
even though it may not be able to receive the gas until sometime next year.
PTT
was required to take at least 65m cubic feet per day of gas beginning in
August
of last year but so far has only taken 5m cubic feet per day due to delays by
the Electricity Generating Authority of Thailand in the construction of the
Ratchaburi power plant which will use the gas.  It is unclear when the
Ratchaburi plant, which is subject to a politically explosive privatisation
process, will be commissioned. 
Delays in the payment by PTT have been holding up a riumber of projects inside
Burma, particularly a muchneeded combined power plant and fertiliser
production
facility being developed by Unocal and Mitsui of Japan. Although the
financially strapped Burmese government does not have the money to build the
facility, lenders backed by the Yadana consortium have indicated a willingness
to finance the project once a steady stream of cash from the gas project was
secured.  Cash flow is likely to remain elusive until Ratchaburi is completed
and PTT has an end source for the gas. 
  
  
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