25-11-04 The Thai government might need to review its ambitious southern energy land bridge project since the cost of the construction is being inflated by an increase by 50-60 % in steel prices, Energy Minister Prommin Lertsuridej said. Steel is expected to account for 60-70 % of the project's construction costs.
"Even though rising oil prices are a positive factor for the project, the review is needed to compare the pros and cons of hefty oil prices against higher construction costs," Dr Prommin said.

As well, he said, interest from Sinochem from China, one of three initial partners in the project, was waning. It could not guarantee the purchase of about 500,000 barrels of oil from the project. Under the agreement, Thailand, China and South Korea agreed to purchase 500,000 barrels each from the project.
However, he reiterated that the plan still was in place because two other companies had expressed interest in investing in the project, in addition to the South Korean and Japanese investors. They are China National Petroleum Corporation (CNPC), which operates oil refineries in northern China, and Sinopec, which runs oil activities in the south of the country.

The land bridge project, first proposed more than 10 years ago, is expected to get off the ground in 2005 and to be completed by 2007-08.
It involves a pipeline stretching between Phangnga and Nakhon Si Thammarat with the capacity to transport 500,000 to 2 mm barrels of oil, as well as related infrastructure.