[Date Prev][Date Next][Thread Prev][Thread Next][Date Index ][Thread Index ]

Opponents bare cheap gas options (r)



Opponents bare cheap gas options

BY JAMES FAHN

Feb. 17, 1998
The Nation

THAILAND doesn't need to buy natural gas from Burma's Yadana field because
plenty of other clean and cheap sources of energy are available, pipeline
opponents said Monday. 

The Petroleum Authority of Thailand (PTT), meanwhile, began talks with the
Electricity Generating Authority of Thailand (Egat) following the latter's
admission that the power plant being built to burn the Yadana gas will not
be completed on time. 

"We're going to talk with Egat and see how long the delay is," said Anon
Sirisaengtaksin, the PTT's deputy president in charge of natural gas
transmission and marketing. "If the delay is just a few days, then it
should not be a problem. If it's a few months, then there could be problems."

Egat, whose budget is under strict supervision by the IMF, is facing
financial liquidity problems and may not be able to accept the loans needed
to finish the mammoth power plant until after the fiscal year ends on Sept
30, according to Pipob Udomittipong of the Kalayanamitra Council. 

The pipeline, meanwhile, is due to start delivering gas by July 1, and the
PTT claims it will have to pay huge fines if it is not ready to accept
delivery by that date. 

Speaking before a national committee set up to review the controversial
pipeline project, Pipob also raised questions about the price of the gas. 

Back in 1994 when the Yadana gas sales agreement was signed, PM's Office
Minister Sawit Bhotiwihok was quoted as saying the price was US$2.52 per
million British thermal units (mbtu), said Pipob. He added that due to
inflation, the cost had now risen to US$3/mbtu, as acknowledged by Piti
Yimprasert, the PTT official who oversees natural gas development. 

But Pipob noted that the original price was still more expensive than the
$2.30/mbtu rate later negotiated for gas from the Thai-Malaysia Joint
Development Area (JDA). 

The discrepancy is all the stranger, added Witoon Permpongsacharoen of the
environmental group Terra, because Thailand was the only possible customer
for the gas from the Yadana field, since no other surrounding countries
needed it and it was not economically feasible to liquefy it and ship it to
a distant market. 

"Back [in the early 1990s] when Thailand was trying to decide whether to
purchase gas from Malaysia or Burma, then-minister Korn Dabbaransi said it
was better to buy from Burma because we had more power over them in
negotiating the price and the date of purchase," said Witoon. "Malaysia
offered to sell the JDA gas at the price of $2.50, but Thailand wanted it
to be reduced to $2.30, so why didn't we make the same demand from Burma?" 

However, committee chairman Anand Panyarachun said that at the time he
served as prime minister in 1991-92, purchasing gas from the JDA was a
questionable proposition because Malaysia, having plenty of gas reserves of
its own, was in no hurry to sell it to Thailand. 

"Thailand needed a definite supply of gas and, during the Anand I
administration, it was not possible to say we could definitely use the JDA
gas," Anand explained. 

The PTT's Anon said that the JDA gas cost $2.30/mbtu back in 1995-96, but
since then it had risen with the price of inflation. He also claimed that
the $3/mbtu Yadana price referred to gas that had already been transported
from the Andaman Sea to the Thai border. 

But Pipob quoted Piti as saying the $3/mbtu rate did not include the cost
of transporting it via pipeline to the Thai border. 

"We are not confident that the Yadana gas is being purchased at the
cheapest price possible," he said. "We want the PTT to provide clearer
information on this point.'"

Pipob also quoted Egat statistics to show that demand-side management (DSM)
could reduce energy demand by over 1,700 megawatts over the next five years
and is much cheaper than increasing power supply through the purchase of
natural gas. The Ratchaburi power plant will eventually use both coal and
gas to produce 4,600 megawatts. 

Even if DSM is not factored in, Pipob said, there are plenty of gas
reserves in the Gulf of Thailand and the JDA to meet Thailand's future
energy demand, projections of which have been reduced due to the current
economic malaise.