Thailand and Malaysia agree to share gas in offshore area claimed by both

Oct 30, 1999 02:00 AM

Thailand and Malaysia agreed to share coveted natural gas reserves in an offshore area claimed by both Southeast Asian nations, an uncommon move in a region where territorial disputes often sour relations between neighbours. The deal between the two state petroleum companies was signed in the presence of Thailand's Prime Minister Chaun Leekpai and Malaysia's Prime Minister Mahathir Mohamad in Alor Setar, about 30 miles south of the Thai-Malaysia border.
The Malaysia-Thailand Joint Development Authority was set up in 1979 soon after both countries claimed the area in the Gulf of Thailand. Since then, complex negotiations between diplomats and officials of the state petroleum companies have led to the final agreement.

Among the hotly contested territorial disputes in Asia is that over the Spratly Islands. Six nations around the South China Sea have claims to the islands.
Relations between Singapore and Malaysia have also often turned icy over a Malaysian railroad facility in the tiny city state.

Malaysia and Thailand will invest about $ 800 mm in the first phase of the project for the Cakerawala gas field. Cakerawala, one of the first fields explored in the disputed area, is expected to be completed by 2001. Gas is expected to flow into pipelines to Thailand and Malaysia one year later. Pipelines from the offshore area will bring gas to Songkhla on Thailand's east coast and then flow to Malaysia through a pipeline connecting it to the northern state of Kedah.
The main partners in the project are Malaysia's Petronas, and the Petroleum Authority of Thailand. The reserves are about 187 miles from the Thai and Malaysian shoreline. Earlier about 300 villagers from the southern Thai border town of Sadao protested the planned project. They fear the project will hurt the environment and their lives.

Source: AP
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