06-07-02 Indonesia and its Southeast Asian neighbours agreed to tap foreign investors to help them build $ 7 bn worth of natural gas pipelines linking the region's 10 countries to increase use of the fuel. The countries in the Association of Southeast Asian Countries, or ASEAN, signed an initial agreement to build 4,500 km in pipelines connecting countries in the region. The network may take more than 15 years to complete and has to overcome tax and security problems, as well as finding investors.
“Commercial development of energy, while expensive and requires massive investment in supply facility, is necessary to cope with the growing energy demand in the region,” said Vincent Perez, the secretary of energy at the Philippines. He spoke at the ASEAN Energy Ministers' meeting at Denpasar on Indonesia's Bali island.

Southeast Asia's lack of gas pipelines and receiving terminals has hampered growth in demand for the fuel even though the region has some of the biggest natural gas reserves, analysts said.Shell Group predicts Asia will benefit from the cheaper fuel as gas overtakes oil as the main energy source within 20 years.
The ASEAN Centre for Energy forecast that energy demand for eight of the countries in Southeast Asia including Singapore, Thailand, Indonesia, Malaysia, Myanmar and the Philippines will rise 59 % in the decade through 2010. The Link Indonesia, which owns the biggest gas reserves in Asia, is also the world's top LNG exports. The country has 100 tcf of natural gas still to find buyers, said Indonesia's Energy Minister Purnomo Yusgiantoro in Bali.

Boosting sales to its neighbours would earn Indonesia more revenue as LNG prices have fallen after demand from Japan, the top buyer, grew at slower rates because of a series of recessions in the world's second biggest economy. The Trans-ASEAN Gas Pipeline project would connect some existing pipelines that already supply gas to Southeast Asian countries.
Indonesia is pumping gas to Singapore along a 500 km pipeline from its West Natuna field, off the east coast of peninsular Malaysia. Malaysia's domestic pipeline network also connects to its southern neighbour, Singapore. There are also pipelines supplying gas from Myanmar's Yadana and Yetagun fields to Thailand. Next year, Singapore will also be getting some of its natural gas via a pipeline being built from Indonesia's Sumatra island.

ASEAN's 10 members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.