Thailand, Malaysia plan gas pipeline

Thailand, Malaysia plan gas pipeline

BANGKOK (AFP): Thailand and Malaysia are planning a multi- million dollar pipeline project to supply both countries with gas from jointly-held offshore fields in the South China Sea, an official said yesterday.

State oil firms the Petroleum Authority of Thailand (PTT) and Petronas of Malaysia have agreed to purchase gas from the fields and are doing feasibility studies into a Trans-Thailand-Malaysia Gas Pipeline, a PTT spokesperson said.

Thai industry minister Korn Dabbarangsi said the pipeline would cost at least 10 billion baht (US$280 million), with Thailand and Malaysia holding 50 percent each in the project, the Thai daily Business Day reported.

The pipeline would run for about 250 kilometers (155 miles) from the offshore gas fields to a landing point in southern Thailand and onwards to northern Malaysia. Joint venture projects including gas separation and power plants are also planned.

Delivery of 600 million cubic feet per day of gas is expected to commence by the end of 2000, increasing to 1,200-1,500 within three years, according to the Thai Ministry of Industry.

Petronas and PTT have agreed an initial base price for gas from the project at $2.30 per one million British thermal units.

Feasibility studies by PTT and Petronas into the joint venture developments are expected to be finalized within three months, when both sides hope to sign memorandum of understanding to undertake them, reports said.

Gas reserves in the Thai-Malaysia "joint development area," which covers 7, 250 square kilometers (2,900 square miles) in three concession blocks in the South China Sea, are estimated to be 10 trillion cubic feet.

Companies operating the concessions are Petronas Carigali, a subsidiary of Petronas, PTT Exploration and Production International, and the Triton Oil Company of Thailand.