Abstract

The 2^nd ASEAN Informal Summit Meeting in Kuala Lumpur, December 1997, declared ASEAN Vision 2020, called for cooperation to establish interconnecting arrangements for electricity and natural gas within ASEAN through the ASEAN Power Grid and a Trans-ASEAN Gas Pipeline. This declaration was followed by the Hanoi Plan of Action, which stipulated the need to institute a policy framework and implement modalities by 2004 for the realisation of the Trans-ASEAN energy network. The cooperation to fulfill the energy demand in this region by its internal resources is required because some countries have abundant energy resources, especially natural gas, while others have high energy demand. The 24^th ASCOPE Council Meeting in Kuala Lumpur agreed to establish the Trans-ASEAN Gas Pipeline Task Force whose function is to study the implementation of energy cooperation and related issues.

The study started with evaluation of the energy demand in every country up to the year 2020, based on predicted economic growth and energy mix including oil, natural gas, coal and hydro power. The study concluded that natural gas reserves in this region are sufficient to fulfill expected gas demand up to the year 2020. On the supply side, Indonesia has excess gas from Natuna and Sumatra, and Malaysia from the Sabah province. On the other hand, Singapore, Thailand, the Philippines and Malaysia (Peninsula) have gas shortages and will require gas imports from Indonesia, especially from East Natuna.

Based on the gas supply to demand balance, the study continued by evaluating pipeline interconnections which could support this balance. The study concluded there are 7 potential pipeline interconnections with East Natuna as the main gas supplier.

These pipelines connect East Natuna with the buyers in Singapore, Malaysia (Peninsula), Thailand, the Philippines and Vietnam.

The realization of this cooperation must incorporate cross border issues such as taxes, ownership, operational, technical specifications, transit provisions, commercial arrangements etc. It is agreed among the countries to draft MOUs which can cover all these issues. The MOU is not a legal commitment and is subject to economic review where the buyers and sellers have the right to evaluate whether it is economic to buy/sell gas to/from this region or to/from other regions. It is a challenge for Indonesia to sell gas from East Natuna to nearby countries and increase regional cooperation and to get national income from gas sales.