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PTT ordered to suspend construction of pipeline

The Nation
January 9, 1998


Pennapa Hongthong, Nantiya Tangwisutijit

Prime Minister Chuan Leekpai yesterday ordered the Petroleum Authority of
Thailand to suspend construction of the Yadana gas pipeline for at least
three days after a meeting with conservation groups and PTT executives.

The premier intervened in the dispute as the two sides were set to clash at
the pipeline site in Kanchanaburi forest land.

Construction work was about to reached the area where conservation groups
have camped in an attempt to save the forest from what they claim is
irreversible damage.

At the meeting with Chuan were PTT governor Pala Sukhavet and Piti
Yimprasert, president of PTT Gas; Pipop Thongchai and Pinan Chotirosseranee
from Kanchanaburi; lawyers from both sides; and officials from the
Environmental Policy and planning Office.

A team of 10 lawyers was appointed by Chuan to investigate the gas sales
agreement between PTT and international gas developers in Burma. The team
will meet today at Government House to study the controversial agreement.

Environmental groups earlier accused PTT of misleading the public by
claiming it faced compulsory fine it the project was delayed. The groups
found a clause in the contract which stipulated that PTT could be granted a
waiver on the fines if the delay was caused by "acts of government".

Pipop Thongchai, a leader of the protesting groups, said a delay would be
considered a force majeure event if it was caused by the government acting
to settle disputes between PTT, conservation groups and villagers affected
by the project.

The clause also included other events such as civil disturbances,
blockades, strike and natural disasters.

PTT admitted that the interpretation of the contract by Pipop was correct.
It had not disclosed the condition to the public earlier because it
considered government interference unacceptable to the international
business community.

PM's Office Minister Suphatra Masdit was yesterday given responsibility for
settling the issue. She said construction of the pipeline from kilometre 15
to 27.5, which is in the forest, would be suspended from today while the
lawyers discussed the contracts.

They are expected to finish, secretary-general of the Office of the Council
of State, was to chair the committee and renowned environmental lawyers
Panas Tassaneeyanon was appointed vice chairman. PTT and conservation
groups each selected another four lawyers for the committee.

The committee will consider at least four contracts -- the Export Gas Sales
Agreement signed on February 1995 between the PTT and gas developer groups;
the Production Sharing Contract dated July 9 1992; the Memorandum of
Understanding of the same date relating to the Yadana Gas Project; and the
contract between PTT and the pipeline construction company.

The Yadana gas project was approved by the Chuan government in 1992 to
allow PTT to import gas field in Burma -- the Myanmar Oil and Gas
Enterprise, Total Myanmar Offshore Co and PTTEP International Limited,
which is PTT's private investment arm.

Songkiet Tansamrit, PTT corporate relations department director, said the
authority would follow the government's order and temporarily suspend
construction until the lawyers could reached a conclusion.