ASEAN gas grid project develops slowly
ASEAN gas grid project develops slowly
Cameron Dueck, Reuters, Singapore
Southeast Asian states are slowly putting together the pieces of a US$6 billion gas pipeline network that will harness the region's rich reserves and alleviate dependence on imported oil.
The Trans-ASEAN Gas Pipeline plan, linking supply to demand centers in Malaysia, Singapore, Indonesia, the Philippines, Myanmar, Vietnam and Thailand, was first proposed in 1996 with a $15 billion price tag.
Five years on, the plan has been downsized and proposed investment slashed by more than half. ASEAN states are due to sign a memorandum of understanding for the proposal in July 2002.
Analysts and industry officials say regional demand, driven by gas-fired power generation, should be strong enough to create many of the smaller spurs and links by 2007. But political and economic issues could delay completion for decades.
"The main idea for the grid is to supply gas to power plants within the region," said Guillermo Balce, executive director of the ASEAN Centre for Energy (ACE) in Jakarta.
"The bigger links will take some time to develop, towards 2010 or even later. Especially because the key to the major links is East Natuna," Balce told Reuters.
The Asia-Pacific region contains 10.33 trillion cubic metres of proven gas reserves, or just under seven percent of the world total, according to the 2001 issue of the BP Statistical Review.
Malaysia and Indonesia hold the largest single reserves at 2.31 and 2.05 tcm respectively, making up about 42 percent of the regional total.
"Southeast Asia is a self-contained market for supplies and consumption of gas. It is a region where there is not one major gas supply field. Each market has its adjacent supply," said Gavin Thompson, Asia Pacific energy consultant with Wood Mackenzie in Edinburgh.
Initial Trans-ASEAN pipeline plans five years ago were greeted with skepticism as more of a politically-led drive rather than a sound economic and commercial plan.
But single pipelines have sprouted up as gas markets have developed, laying the framework for a region-wide gas grid to grow organically.
Under the new plan, seven pipeline projects are slated for commissioning between 2002 and 2016 with Indonesia's Natuna gas fields in the South China Sea playing a central role.
Major links would include a line from East Natuna to Erawan, Thailand via the Joint Development Area (JDA) in the Gulf of Thailand and a pipeline from East Natuna to Kerteh, Malaysia via the West Natuna field.
West Natuna also will be connected to Malaysia via a pipeline to the offshore Duyong gas facility. The JDA is slated to link to Vietnam's Block B gas field in the Gulf of Thailand.
The longest development would be a 1,540-kilometer pipeline from East Natuna to the main island in the Philippines, Luzon, via Sabah in East Malaysia and the Malampaya field off the Philippine island of Palawan.