SE Asian oilseeds market perks up

SE Asian oilseeds market perks up

KUALA LUMPUR (Reuter): A proposed 10,000-km gas grid linking members of the Association of Southeast Nations (ASEAN) would cost in excess of US$20 billion, said Hassan Marican, president of Malaysia's Petroliam Nasional Bhd

The pipeline network would involve "an investment of more than $20 billion," Hassan said in reply to a question at the ASEAN Energy Business Forum.

But, it was not yet clear how viable the project was for investors from the private sector, he said.

"While private investors have the capability and capacity to implement the project, ultimately they will have to look at the bottomline.

"And to provide a high return to satisfy their needs, consumers will have to pay higher prices, especially in terms of electricity tariff," the Petronas chief executive said.

The development of the Asean Gas Grid will also need to consider the tolling or throughput charges for cross border transmission, he said.

The various countries' fiscal regime must take into consideration the different taxes, duties and subsidies that exist today, he said.

"All this will have a major impact on pricing if the grid is to progress beyond the conceptual stage.

"Perhaps, the possibility of an open access system as practised in North America, or a single price formula for regional gas, could be studied," said Hassan.

Currently, Asean gas reserves stand at 438 trillion cubic feet and are expected to last 47 years at the current rate of production.

However, this figure is set to increase further with the inclusion of the reserves of the soon-to-be Asean members Laos, Myanmar and Cambodia.

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