Thailand, RI to revive E. Natuna gas, pipeline deal
Thailand, RI to revive E. Natuna gas, pipeline deal
SINGAPORE (Dow Jones): The Thai and Indonesian governments
have agreed to revive a deal to pipe natural gas from the East
Natuna Sea to Thailand, according to the Thai Foreign Ministry.
In the joint Protocol Relating to Economic Trade and Tourism
Cooperation, released Monday, the two sides said a memorandum of
understanding for the East Natuna gas will be finalized "after
2003," and first gas is expected in 2013.
The two sides will establish a joint working group to study
gas marketing, gas sources, and transportation of the gas via
pipeline, the protocol said.
Officials from PTT Gas, a unit of the Petroleum Authority of
Thailand, and Exxon Mobil Corp. couldn't immediately provide more
details. The East Natuna project was shelved after the Asian
financial crisis began in 1997.
Exxon Mobil, through subsidiaries Exxon Natuna Inc. and Mobil
Natuna Inc., holds a 76 percent interest in the Natuna D-Alpha
Block. Indonesian state oil and gas company Pertamina, which
holds the rest, markets the gas.
Total gas reserves for Natuna D-Alpha are estimated at 222
trillion cubic feet, while estimated recoverable hydrocarbon gas
reserves are around 46 trillion cubic feet. But the field
contains as much as 72 percent carbon dioxide, which complicates
development of the project and increases the cost.
Pertamina president-director Baihaki Hakim told Dow Jones
Newswires Friday that his company might link a deal to process
crude at Thai refineries to an East Natuna gas sales agreement.
Monday, Indonesian President Abdurrahman Wahid and Thai
Premier Thaksin Shinawatra said at a joint news conference that
an agreement in principle has been reached for Thailand to refine
crude for Indonesia.
According to the original MOU, signed in 1997, Thailand
planned to pipe an initial 500 million cubic feet a day of Natuna
gas from 2005, doubling to 1.0 billion cubic feet a day in 2008.
PTT planned to bring the gas via a 1,538-kilometer submarine
pipeline to the Ratchaburi gas-fired plant.
After the Asian financial crisis dramatically reduced
Thailand's energy needs, PTT and the Electricity Generating
Authority of Thailand delayed several projects, including the
East Natuna deal. The Ratchaburi plant is now fed by gas from
Myanmar.
In 1995, Exxon committed to invest US$40 billion in the East
Natuna field. Exxon and Mobil - which had not yet merged -
considered producing liquefied natural gas from the field, using
Mobil's offshore LNG technology.