WASHINGTON, April 5 (UPI) -- Investors intend to invest $3 billion to connect the Philippine Malampaya natural gas field and other ASEAN member countries whose oil and gas infrastructure have already been interconnected. Philippine National Oil Company (PNOC) President Eduardo V. Manalac announced on Apr. 2 that the gas pipeline is expected to connect through Brunei; Philippine infrastructure would benefit from whatever supplies other gas fields in the region could share such as the Natuna gas field of Indonesia. The proposed 621-mile long Malampaya-Brunei offshore gas pipeline will be part of the Trans-ASEAN Gas Pipeline (TAGP), which is envisioned to interconnect the gas infrastructure of the 10 ASEAN-member countries. Manalac said: "If we have to base the cost from the 311 mile pipeline that Malampaya has now, then the cost would reach up to $3 billion." Countries already sharing gas supply via interconnected pipelines are Malaysia to Singapore, Indonesia to Malaysia, Indonesia to Singapore, and Myanmar to Thailand. Manalac added that plans are also under way for importing liquefied natural gas (LNG) as of 2009 to 2010 and shipments or constructing storage facilities are under consideration.
Wood Group Chief Sir Ian Wood has urged U.K. Energy Minister Mike O'Brien to hold talks with Norwegian officials over the country's failure to award contracts to U.K. energy companies in the Norwegian sector of the North Sea. Under the recent U.K.-Norwegian agreement, there would be a single North Sea reserve with a single supply and services market that would ensure Norwegian gas supplies to the United Kingdom. Welcoming the signing of the agreement in principle, Wood said on Apr. 3: "The right words are in the document but the playing field is far from level. It's fairly evident that recent contracts are all largely going one way. Even Norway's leading energy writer has said that this is a one-sided deal and Norway won't continue to get away with it. There are a fairly significant number of projects and the clock is ticking on how long they can keep contracting and supply side contracts going one way." The Wood Group witnessed a 15 percent drop in profits in 2004.
Coal will continue to make up a significant proportion of China's energy needs for years to come. Wang Jiacheng, deputy director of China's Industrial Economics and Technical Economics Institute under the National Development and Reform Commission (NDRC), said on Mar. 30: "Development of coal and electricity is the core of the development of China's energy industry." China's consumption and production has reached record highs. Wang Jiacheng said consumption hit 1.97 billion tons of standard coal equivalent, a 17.4 percent increase. Coal use accounts for 68.7 percent of overall energy consumption. Domestic production meanwhile has reached 1.85 billion tons of coal equivalent, a 15.1 percent increase. Crude oil use accounts for 21.8 percent; natural gas accounts for 2.8 percent; water and hydroelectricity represented 6.7 percent. Jiacheng added: "China's energy structure centers on coal and will continue to do so."
Gaz de France has announced on Apr. 1 that the company has secured a liquefied natural gas deal at a British terminal. Gaz de France and National Grid Transco PLC subsidiary Grain LNG Ltd have signed a 20-year agreement to supply 2.4 million tons of LNG regasification annually at the Isle of Grain terminal in the United Kingdom starting in late 2008 or early 2009. The terminal at the Thames Estuary meanwhile is due to come online soon and has a capacity of 3.3 tons of LNG annually. The terminal is expected to increase capacity to 9.8 million tons annually in 2008. After the projects are completed, the United Kingdom will have 12 percent of the country's gas needs met; the U.K. currently has Europe's largest gas market and is expected to increase by 2 percent year-on-year, which will make the country a net gas importer as its North Sea gas production declines. Although an LNG source has yet to be determined, LNG will come from Gaz de France gas production.
Construction of the 620-mile long China-Kazakhstan oil pipeline is under way, according to official statements on Apr. 1 from China's largest oil producer, China National Petroleum Corporation (CNPC). CNPC spokesperson Li Runsheng said that pipeline construction began in September 2004 and the company expects to complete construction work by December 2005. CNPC, Kazakhstan National Petroleum and Natural Gas Company (KMG) signed an agreement on May 17, 2004 on a cross-border oil pipeline connecting Atasu in Kazakhstan to Alataw Pass of northwestern Xinjiang Uygur Autonomous region. Under the agreement, CNPC and KMG agreed to jointly construct the pipeline, which will have a capacity of 10 million tons of oil annually in its initial phase.
A gas pipeline connecting Iran and the Nakhchivan Autonomous Republic is expected to be completed in October. Iranian Ambassador to Azerbaijan Afshar Suleymani announced on Mar. 24 that construction of the pipeline is on schedule. Suleymani added the renovation work on the bridge connecting the Iranian Poldasht province and the Nakhchivan's Shahtahti village are also on schedule and the Iranian government has allocated $1 million in grants for this project. Suleymani further noted that Azeri-Iranian energy and transport cooperation are an ongoing success.
Closing oil prices, Apr. 5, 3 p.m. London
Brent crude oil: $55.97
West Texas intermediate crude oil: $56.60
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