Petronas and PTT to remain buyers of Cakerawala gas

Nov 20, 2002 01:00 AM

The Carigali-Triton Operating Co is not looking for other buyers for its Cakerawala field's gas despite delays in the construction of the Trans-Thai Malaysia pipeline, a source close to CTOC said. CTOC announced earlier this month it had completed installing the Thai field's facilities, which is ready to produce 390,000 mm cfpd of gas as per the contract it had signed with the buyers of the JDA gas -- Malaysia's Petronas and the Petroleum Authority of Thailand.
But CTOC cannot proceed with production until the pipeline comes onstream, the source said. "Neither gas nor condensate can be produced until the pipeline is ready," he said.

The Cakerawala field lies in offshore Block A-18 in the Gulf of Thailand's Malaysia-Thailand Joint development Area. CTOC is the operator of the block. CTOC had signed a 20-year take or pay gas sales contract with Petronas and the PTT effective end-2002. However, delays in the pipeline construction has not deterred CTOC's commitment to the contract, the source said. "CTOC understands the sensitivity of the pipeline issue in Thailand...given the environmental concerns...and recognizes that the buyers are doing all they can to speed up construction of the pipeline."
Moreover, CTOC and the buyers have a long-term contract, while there are initial delays, CTOC is confident the pipeline would come onstream, he said.

With regard to the "take or pay" clause in the contract, the source noted the buyers would probably have to compensate CTOC but the terms of payment were yet to be discussed.
Meanwhile, the TTM pipeline construction, which is the responsibility of Petronas and PTT, is not likely to start before April 2003, a TTM official said. The 350 km pipeline is to connect the fields in the JDA to a gas separation plant in Songkhla in south Thailand and from there move gas to Kedah in north Malaysia.

The pipeline and GSP construction have faced innumerable delays due to environmental protests. The Thai Office of Environment Policy and Planning only recentlyapproved of the new pipeline landing point and GSP site. TTM has now initiated the process of land-acquisition, which could take 3-4 months before construction can begin.
Petronas Carigali and Triton Oil of Thailand have an equal stake in Block A-18. Triton Oil is jointly owned by BP and US' Amerada Hess.

Source: Platts
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