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.