Peace hopes surround SE Asian gas pipeline

Peace hopes surround SE Asian gas pipeline

SINGAPORE (AP): Its supporters say it has the potential to
bring peace and stability to Southeast Asia, but critics call it
a pipe dream.

Over the next couple of decades, the state-owned oil companies
of the Association of Southeast Asian Nations plan to link
together thousands of kilometers of pipe - both underwater and on
land - to form a massive natural gas pipeline.

Backers hope the project will be a major boost to Asean
integration and eventually extend beyond Southeast Asia, possibly
to China and India. While requiring a huge amount of coordination
to build, the pipeline would ensure a constant supply of natural
gas for the region.

But political unrest in Indonesia and border disputes between
Thailand and Myanmar threaten to derail the grand vision, and no
one knows if the pan-Asian pipeline will become a reality or
remain in its current, fragmented state.

Much of the gas that will be tapped to feed the giant energy
grid is in Indonesia, where separatist rebel activity threatens
the economic viability of the project.

"Our own perception is that these political instabilities are
just ripples," said Guillermo Balce, the head of the Asean Center
for Energy in Indonesia. "The countries of Southeast Asia,
politically, are in harmony because they have to be, especially
at the economic level."

ASEAN countries Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand and Vietnam have
agreed to the project in principle.

But there is no set timetable for its completion, and
estimates on its cost fluctuate between $15 billion and $30
billion.

About 2,540 kilometers of cross-border pipeline is already in
place between Malaysia and Singapore, Myanmar and Thailand, and
Indonesia and Singapore.

The first gas to travel through a $1.5 billion, 640 kilometer
pipeline went from Indonesia to Singapore in January. Another
pipeline from Indonesia to Singapore is under construction at a
cost of $1.2 billion.

The exact length of an eventual trans-Asean pipeline isn't
known. And no one has estimated how much extra pipe - feeding off
the main line - will be needed to service the domestic markets in
each nation.

The current links, the beginning of the pipeline project, have
evolved from bilateral agreements, said Dr. Mohd Farid Mohd Amin
from Malaysia's state-owned Petroliam Nasional Bhd.

"The future challenge will involve multilateral arrangements"
that are far more complicated because three or more nations have
to agree, said Amin, who is in charge of implementing the Asean
project.

Amin and others believe a coordinated and constant gas supply
will greatly enhance security in Southeast Asia, but that there's
a long way to go before the dream becomes a reality.

"It's good from a world peace point-of-view, but it needs to
be economically viable," said John Vautrain, a U.S.-based energy
consultant, adding that such projects usually succeed only if
private energy companies back them. So far, none has.

There is talk that the pipeline will reach into India and
China but Amin said "the main priority is to try to get the gas
to Asean nations first."

That might require a degree of political will that doesn't
currently exist in Southeast Asia.

"It's easy to agree on something that's not going to happen
tomorrow and that you don't have to do anything about today,"
Amin said.

And then there are the issues of control and sovereignty.

Countries will have to agree to play host for huge amounts of
natural gas bound for somewhere else - and many may seek to
become centers of regional gas distribution.

"The biggest impediment is that everyone wants to be a hub,"
said energy consultant Sharon Siddique. "That's the crux of the
issue and not everybody is going to be a hub."

Another problem, she said, is the issue of demand. Asia is
currently facing a power glut, unlike three years ago when the
pipeline project first began to be taken seriously.

Siddique said that in the past oil companies liked to believe
they were untouched by trouble in the region. But Exxon Mobil
Corp. (XOM), citing security concerns, recently had to stop
production during uprisings in the Indonesian province of Aceh.

Border tensions, especially between Myanmar and Thailand, need
to be quelled and the question of continuing sanctions against
Myanmar for its human rights record needs to be answered before
the pipeline project can flourish, Siddique said.