Malaysia calls for united SE Asian energy network

Malaysia calls for united SE Asian energy network

KUALA LUMPUR (AFP): Malaysian Deputy Prime Minister Anwar Ibrahim called yesterday for the development of a pan-Southeast Asian electricity grid as well as an integrated oil and gas pipeline to meet future energy needs.

Production areas would be connected with rapidly increasing demand centers under the scheme, he said in a speech to an Association of Southeast Asian Nations (ASEAN) energy business forum.

Anwar said energy operations should be extended across national boundaries in line with the concept of greater integration and stronger ties within ASEAN, which is to expand to 10 countries next month.

"As a long-term project, we should endeavor to make the region the regional energy center of excellence with a fully developed energy sector, including upstream and downstream activities," he said.

Anwar forecast that rapid growth of ASEAN economies would fuel energy demand. Energy use in the region currently stands at 140 million tons of oil equivalent (MTOE) a year, officials said.

According to an ASEAN study, energy demand in the region would more than quadruple from 110 million MTOE in 1993 to 460 MTOE in 2020, Anwar added.

ASEAN groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Myanmar, Cambodia and Laos will join the grouping in July, expanding the scope of a planned free- trade area to 500 million people.

In 1981, the regional grouping set up a forum made up of heads of power utilities to examine possible cooperative projects. Malaysia, Thailand and Singapore currently enjoy a power sharing agreement, in force since 1985.

Power utility giant Tenaga Nasional Bhd.'s chief Ahmad Tajuddin Ali said in a paper that the total capital expenditure required for power development in the region was estimated at about US$90 billion over 1997-2005.

He said ASEAN power generation capacity would increase by an average of 9 percent per year from the current 65 gigawatts to about 87 gigawatts by 2000 and 135 gigawatts by 2005.

Energy, Telecommunications and Posts Minister Leo Moggie said an obvious benefit of having a common connection was the sharing of reserve generating capacities to lower costs and ensure reliable supply.

"The power grid as well as the gas grid will allow for the expansion of energy trade in our region," he said, adding that the private sector could participate in the project to help translate the plans into reality.

Meanwhile, the head of national oil company Petroliam Nasional Bhd., Mohamad Hassan Marican, estimated the cost of a 10,000 kilometer (6,250 miles) gas pipeline across Southeast Asia at about $20 billion.

He said that since the mid-1980s, gas consumption in the region had been growing at an annual rate of 7.5 percent, compared to 4.7 percent for oil.

Known ASEAN gas reserves stand at 13.14 trillion cubic meters (438 trillion cubic feet) and are expected to last 47 years at current rates of production.

The reserves will increase further with the entry of Burma, Cambodia and Laos into ASEAN, Hassan said.

Hassan said gas production in ASEAN was mainly driven by demand from outside the region, in countries such as Japan, South Korea and Taiwan.

He said ASEAN producers dominate the world liquefied natural gas (LNG) market with Malaysia and Indonesia producing a combined 40 million tons a year, accounting for almost 80 percent of LNG imports by Japan, South Korea and Taiwan.

Hassan, however, said various challenges had to be resolved to realize the ASEAN gas grid, including pricing and funding for the project.