ASEAN plans pan-Asian pipeline

Over the next couple of decades, the state-owned oil companies of the Association of Southeast Asian Nations ASEAN plan to link together thousands of kilometres of pipe -- both underwater and on land -- to form a massive natural gas pipeline.
Backers hope the project will be a major boost to ASEAN integration and eventually extend beyond Southeast Asia, possibly to China and India. While requiring a huge amount of coordination to build, the pipeline would ensure a constant supply of natural gas for the region.
But political unrest in Indonesia and border disputes between Thailand and Myanmar threaten to derail the grand vision, and no one knows if the pan-Asian pipeline will become a reality or remain in its current, fragmented state. Much of the gas that will be tapped to feed the giant energy grid is in Indonesia, where separatist rebel activity threatens the economic viability of the project. On April 7 a grenade thrown by separatists exploded near a gas extraction installation in Lhoksukon, about 1,750 km northwest of Jakarta, setting it on fire.
"Our own perception is that these political instabilities are just ripples," said Guillermo Balce, the head of the ASEAN Centre for Energy in Indonesia. "The countries of Southeast Asia, politically, are in harmony because they have to be, especially at the economic level," he said.

But while ASEAN members Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam have agreed to the project in principle, there is no set timetable for its completion. Meantime, estimates on its cost fluctuate between $ 15 bn and $ 30 bn.
About 2,540 km of cross-border pipeline is already in place between Malaysia and Singapore, Myanmar and Thailand, and Indonesia and Singapore. The first gas to travel through a $ 1.5 bn, 640 km pipeline went from Indonesia to Singapore in January. Another pipeline from Indonesia to Singapore is under construction at a cost of $ 1.2 bn.
Yet the exact length of an eventual trans-ASEAN pipeline isn't known. And no one has estimated how much extra pipe -- feeding off the main line -- will be needed to service the domestic markets in each nation.
The current links, the beginning of the pipeline project, have evolved from bilateral agreements, said Dr. Mohd Farid Mohd Amin from Malaysia's state-owned Petronas. "The future challenge will involve multilateral arrangements" that are far more complicated because three or more nations have to agree, said Amin, who is in charge of implementing the project.
Amin and others believe a coordinated and constant gas supply will greatly enhance security in Southeast Asia, but that there's a long way to go before the dream becomes a reality. "It's good from a world peace point-of-view, but it needs to be economically viable," said John Vautrain, a US-based energy consultant, adding that such projects usually succeed only if private energy companies back them. So far, none has.

And then there are the issues of control and sovereignty. Countries will have to agree to play host for huge amounts of natural gas bound for somewhere else -- and many may seek to become centres of regional gas distribution.
"The biggest impediment is that everyone wants to be a hub," said energy consultant Sharon Siddique. "That's the crux of the issue and not everybody is going to be a hub." Another problem, she said, is the issue of demand. Asia is currently facing a power glut, unlike three years ago when the pipeline project first began to be taken seriously.
According to Siddique, the recent security problems in Aceh have highlighted further problems. She said that in the past oil companies liked to believe they were untouched by trouble in the region. But ExxonMobil recently had to stop production during uprisings in the troubled Indonesian province. Border tensions, especially between Myanmar and Thailand, need to be quelled and the question of continuing sanctions against Myanmar for its human rights record needs to be answered before the pipeline project can flourish, she added.