ASEAN set to become an energy hub

Nov 19, 2009 01:00 AM

by D. Arul Rajoo

ASEAN is set to be become an energy hub, with more shipments of oil and gas while China and Japan explore possibilities of building storage facilities in Southeast Asia to enhance their energy security. ASEAN secretary-general Surin Pitsuwan said both countries, as well as South Korea who are ASEAN's dialogue partners, have energy insecurity every time tension arises in the Middle East where most of their energy supplies comes from.
"They feel insecure, so they want to build storage and reserves facilities here. Japan is thinking of building storage facilities east of Strait of Malacca, not the west because that is the choke point," he said, citing the 50,000 ships that passed through the narrow strait annually.

Speaking on ASEAN as an energy hub at the Ninth ASEAN Council on Petroleum Conference and Exhibition here, Surin said China, which is expected to overtake Japan as the dominant liquefied natural gas (LNG) buyer, was said to exploring plans to invest in such facilities island off Australia. According to him, Chevron, which is going to build the Gorgon LNG project in Australia, the world's biggest new development, had stated that the deposited gas could power one mm people for 800 years.
"The line of communication and supply north of Australia will go through Southeast Asia. So commercially, financially and business-wise, it will be a strategic move to make ASEAN an energy hub," he said.

According to reports, PetroChina will become the largest buyer of gas from Gorgon, receiving 2.25 mm tpy of gas from the project for 20 years. Surong Bulakul, chief executive officer of Thai Oil Company, said ASEAN could become an energy trading hub, with Malaysia, Thailand and Singapore having the adequate facilities and experiences to undertake the task.
"For LNG, ASEAN is the centre of supply that comes from Middle East, Australia and those produced in the region, but the demand is not from here," he said.

Merry Marteighianti from Indonesia's Pertamina said there are currently 12 bilateral pipeline connections made up of 3,000 km in the region and being part of the Trans-ASEAN Gas Pipeline (TAGP) project.
She said the first was the 5-km Malaysia-Singapore link completed in 1991, while among others are the Yadan and Yetagun of Myanmar, which are connected to Ratchaburi in Thailand, West Natuna in Indonesia and Singapore and the Trans Thai-Malaysia Gas Pipeline and Gas Separation Project.

On criticism that some member countries like Myanmar are selling gas under the TAGP to outside buyers such as China while some are restricting to domestic use, Marteighianti said it was up individual countries.
"It depends on individual countries where to sell... maybe they want security. We can propose but cannot interfere," she said.

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