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.