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BP: June 2, 1998 : PTT goes it alon



June 2, 1998


                                     



                ENERGY / DEVELOPING SOURCES FOR THE
                                 FUTURE 

              PTT goes it alone
              on Ayutthaya gas
              line

              Joint venture talks threaten to delay
              construction schedule 

              Boonsong Kositchotethana

              The Petroleum Authority of Thailand (PTT) has dropped a plan
              to form a joint venture with private business to lay a
              12-billion-baht natural gas pipeline from Ratchaburi to
              Ayutthaya.

              The pipeline was earlier planned to be the first candidate for
              liberalising the gas transmission business, which has long been
              monopolised by the state oil company.

              Now the PTT has decided to handle the project alone, saying
              this would allow it to meet the pipeline completion deadline in
              2000.

              Given the long time involved in negotiating joint-venture contracts
              under the State Enterprise Joint Venture Act, PTT would have
              been unlikely to meet the deadline under its original plan, PTT
              Gas president Piti Yimprasert said yesterday.

              The pipeline, 30-36 inches in diameter and 150 kilometres in
              length, would run from the Ratchaburi power plant, now under
              construction, to the Wang Noi power station in Ayutthaya. Both
              plants are gas-fired and operated by the Electricity Generating
              Authority of Thailand (Egat).

              The line would form an extension to the 260-km Thai section of
              the gas transmission system from the Yadana field off the coast
              of Burma. The Thai section runs from Ban I-Tong,
              Kanchanaburi, on the Burmese border, to Ratchaburi.

              Though he acknowledged the budgetary constraints, Dr Piti said
              PTT would need to secure funds "by all means" to ensure that
              the pipeline could be built on schedule.

              "It's not that we were against the joint-venture scheme," he said.

              There is an urgency to complete the Ratchaburi-Wang Noi
              pipeline which would provide an additional outlet for Burmese
              gas that the PTT has contracted to purchase.

              Furthermore, he said, the new line offers greater security of gas
              supplies to the country, especially in case of disruption of
              deliveries from fields in the Gulf of Thailand, source of most of
              the country's indigenous gas.

              Natural gas from the Yadana field is due to start flowing in July
              or August, with production reaching 525 million cubic feet
              (MMcfd) 15 months after.

              In 2000, gas from Yadana will be supplemented by deliveries
              from the Yetagun field off Burma, with a contractual flow rate of
              200 MMcfd.

              Dr Piti said the design of the Ratchaburi-Wang Noi line had been
              completed and PTT would soon issue invitations to bid for the
              supply and laying of the line.

              The PTT said it had no objection to private participation in its
              new gas transmission projects. The private sector would provide
              part of the financing needed to get the projects off the ground at
              a time when the PTT budget is being squeezed.

              The PTT has already made a joint-venture deal with Thai Po,
              Thai Romo and B8/32 Partners Co - the concession holders of
              the Benjamas and Tantawan gas fields - for the offshore
              Benjamas-Tantawan gas line. The concession holders have
              agreed to invest 65% in the pipeline with PTT paying 35%. 




                                     




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Last Modified: Tue, Jun 2, 1998