Asia 'progressing' in gas development

Asia 'progressing' in gas development

SINGAPORE (Reuters): Asia is progressing well in developing
its gas resources, despite last year's economic crisis, the head
of Unocal Corp said in an interview.

"The economic downturn stopped things for a while, but things
are definitely happening and it will pick up as the economies
pick up," Roger Beach, Unocal chairman and chief executive
officer said in the interview on Monday.

Unocal is one of the most active oil companies exploring for
oil and gas in Asia. It supplies two-thirds of Thailand's natural
gas and last week announced the first discovery of crude in the
Gulf of Thailand.

Beach said Thailand and Singapore were in the forefront of
Asian gas demand and Vietnam was progressing quickly towards a
gas market.

Thailand's state-owned upstream firm PTT Exploration and
Production said earlier this month it expected the country's
natural gas demand to grow five to six percent in the next few
years from the current 1.8 billion cubic feet per day (cfpd).

Unocal has a major shareholding in the Yadana gas field
offshore Myanmar, which is geared to supplying gas to Thailand.

Singapore has signed long-term gas purchase agreements with
suppliers in Indonesia in a bid to switch to gas for power
generation and away from fuel oil.

"I think Vietnam will be another Thailand, they're very
progressive," he said.

Beach said Vietnam had gas supply available but not enough
demand. But it was a matter of the government deciding its choice
of fuel to use in their increase in power demand.

"If they decide on natural gas, a lot of gas could flow into
Vietnam in about five years time," Beach said.

BP/Amoco Plc, Norway's Statoil and India's ONGC Videsh Ltd
[ONGC.BO] are currently in final negotiations with Vietnam over
gas supply to the country.

Beach said India and Bangladesh have the potential for cross
border gas sales from Bangladesh.

But it was a question of convincing the government it had
sufficient proven reserves to develop its exports.

"Before 2008, I expect to see gas flowing from Bangladesh to
India," Beach said.

He said there was a huge demand in New Delhi from the power
industry, which was currently supplied mostly by naphtha.

"If we ran a pipeline from the Bangladesh border to Delhi we
could serve them natural gas and back out that more expensive
naphtha," Beach said.

Beach said Unocal wanted its corporate production in the next
five years to rise 12-14 percent per year on a compound growth
basis from a current level of around 485,000 barrels per day of
oil equivalent (boe).

The company's ability to meet that target depended on being
able to make a success of at least three of its four major
deepwater projects around the world -- East Kalimantan, Gulf of
Mexico, offshore Brazil and offshore West Africa.

Beach said the company was planning annual capital investment
of $1.2 billion to $1.4 billion each year for the next few years.