Malaysia and Thailand Sign Historic Gas Sales Agreement

Strategic Insights -

The Malaysian national oil company, Petronas, and the Petroleum Authority of Thailand (PTT) have signed a gas sales agreement with the developers of Block A-18 in the Malaysia-Thai Joint Development Area (JDA) to purchase natural gas from the JDA's offshore block. The agreement was witnessed by Prime Minister Dr. Mahathir Mohamad and his Thai counterpart, Chuan Leekpai, in Alor Setar, Kedah state. This historic deal is a major step towards realising the Trans-Asean Gas Grid and marks a significant milestone in the joint development of hydrocarbon resources in the overlapping areas of the two countries.

Key Takeaways:

  • The gas sales agreement was signed between Petronas and PTT with the developers of Block A-18 in the Malaysia-Thai Joint Development Area (JDA) to purchase natural gas from the JDA's offshore block Block A-18 covers an area of approximately 7,250 km².
  • The production sharing contractors for Block A-18 are a Petronas subsidiary, Petronas Carigali (JDA) Sdn Bhd (50 percent participating interest), Triton Oil Company of Thailand (JDA) Ltd (49.5 percent), and Triton Oil Company of Thailand (0.5 percent).
  • The agreement requires the sellers to deliver gas at an initial daily contractual rate of 390 million standard cubic feet per day for a 20-year plateau to the year 2022.
  • The gas will be delivered via a 270 km 34-inch offshore pipeline between JDA and Songkhla, and a 90 km 36-inch onshore pipeline from Songkhla to Kedah in northern Malaysia.
  • The Cakerawala Gas Field will be developed as the Phase One Gas Project with a planned start-up date in the second quarter of 2002.
  • The total investment for the Phase One Gas Development of the Cakerawala Field in the JDA is estimated at US$800 million.
  • Petronas and PTT also signed a Master Joint Venture Agreement, outlining possible future cooperation between the two parties in southern Thailand and northern Peninsular Malaysia.
  • The signing of the agreements marks the culmination of efforts by the Malaysian and Thai governments to jointly develop the hydrocarbon resources in their overlapping areas.
  • The Trans-Asean Gas Grid project will link and expand the Association of Southeast Asian Nations (Asean)'s existing and future gas infrastructure to meet the region's increasing energy requirements.

Statistics:

  • The gas sales agreement covers a contractual period of 20 years, ending in 2022.
  • The daily contractual gas delivery rate is 390 million standard cubic feet per day.
  • The total investment for the Phase One Gas Development of the Cakerawala Field is estimated at US$800 million.
  • The Cakerawala Gas Field is expected to be developed as the Phase One Gas Project with a planned start-up date in the second quarter of 2002.
  • The gas will be delivered via a 360 km pipeline, consisting of a 270 km 34-inch offshore pipeline and a 90 km 36-inch onshore pipeline.

Sources:

  • (Bernama)
  • (Asia Pulse Pte Ltd)
  • COMTEX (http://www.comtexnews.com)