ASEAN to work with China, Japan for energy security

ASEAN to work with China, Japan for energy security

Agence France-Presse, Langkawi, Malaysia

Energy ministers of the Association of Southeast Asian Nations
(ASEAN) pledged on Thursday to intensify efforts to diversify
energy sources and cooperate with China, Japan and South Korea to
boost energy security in the region.

Due to East Asia's growing demand and depletion of fossil
fuels, ASEAN will forge a partnership with the three countries to
address concerns in energy security, natural gas development, oil
stockpiling and renewable energy, the ministers said in a joint
statement.

An energy policy governing group has been established to
provide direction for the cooperation, according to the statement
issued after a one-day meeting here to bolster regional energy
collaboration.

Malaysia's Energy Minister Leo Moggie said ASEAN ministers
agreed that their counterparts in China, Japan and South Korea
would join them formally for the first time at their next meeting
in the Philippines in May next year.

Moggie, who chaired the talks, said the global energy
environment is becoming much more challenging and less
predictable.

The region needs to cooperate with the three countries to
attract investment, funding and expertise to exploit untapped
energy resources including oil, gas and hydro-power, he said.

"It is a milestone achievement towards energy cooperation," he
told reporters after wrapping up the meeting.

"We need investment from outside to assist in the exploration
of our resources. Our three partners have the expertise and
financial strength."

Asked to comment on Japan's push for ASEAN to build oil
stockpiles, Moggie said the newly formed energy policy group
would study the issue and provide recommendations.

Japan floated the stockpile proposal as an emergency response
mechanism during a high-level official meeting in the Malaysian
capital last month.

Japan has a 170-day stockpile and South Korea 100 days, while
officials estimate most ASEAN countries have stockpiles of 35 to
40 days only.

During the talks here, Japan offered to provide soft loans and
technical know-how for the construction of stockpile
infrastructure in the region but not for the purchase of the oil
itself.

Oil from the Middle East accounts for some 90 percent of
imports for Japan, while Asia relies on imported oil for more
than two-thirds of its daily needs of more than 21 million
barrels.

Most ASEAN members, however, oppose large stockpiles as they
are expensive to maintain and could be potential targets for
terrorist attacks.

Hassan Merican, president of Malaysia's national oil company
Petronas told reporters that the time was not right for ASEAN to
stockpile oil.

"Stockpiles are costly to hold. Within ASEAN, there is a
petroleum security arrangement. ASEAN has a mechanism to support
one another in time of supply shortages," he said.

Hassan said Petronas would explore ways to cooperate with
China, Japan and South Korea in both downstream and upstream
activities to enhance energy security.

"There are already joint-ventures, not only in ASEAN but
outside the region," he added.

Guillermo R. Balce, executive director of the Jakarta-based
ASEAN Center for Energy, warned Tuesday that ASEAN must intensify
efforts to cut its reliance on oil since the 10 member grouping
would collectively be a net energy importer by 2020.

ASEAN must build greater dependence on renewable energy
resources such as hydro, wind, solar and bio-mass to ensure
energy security, he said.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand and Vietnam.