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Title Asian Gas Grid still faces uncertainty (The Star-Malaysia) 2002.10.11

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Friday, October 11, 2002
Asian Gas Grid still faces uncertainty
By YAP LIH HUEY

There is still considerable uncertainty facing the Asian Gas Grid (AGG) project. According to David Kim Younghoon, international director for Asia Pacific Economic Cooperation (Apec) Business Advisory Council, industry players in Indonesia are keen on the project, but there are a number of players who are undecided at the moment.

Kim added that as the project would involve players from different Asian countries, it would be not be easy to integrate these players to focus on the project.

He said each member country seems to have its own agenda. Besides, the board members are also active businessmen in their own country, so there tends to be a delay in decision-making as other business interests became primary.

The AGG, if it becomes a reality, would be the world''s longest undersea gas pipeline spanning 5,000km from Indonesia''s East Natuna natural gas field to Shanghai. It would be linked via Malaysia, Thailand, Vietnam and Hong Kong. The AGG is estimated to cost US$8bil for the construction of pipelines and an additional US$15bil for operational purposes.

Construction of the pipelines is expected to start in 2004. It is scheduled to take 4 years to complete. The first output of gas is expected in China by 2008, in time for the Beijing summer Olympics. It is estimated that Indonesia would make US$2bil a year for the next 20 years out of AGG.

Kim sees the Chinese market as a vital and vivacious economy as it prepares for entry to the World Trade Organisation (WTO) and the forthcoming Olympics Games in 2008. This spells lucrative opportunities for the energy and related industries.

With the AGG in the picture, 40% of its gas could be transported to China and the rest, to other Asian countries such as Vietnam, Malaysia, Indonesia and Thailand.

The AGG idea was incorporated in 1999 and includes 5 Apec economies - South Korea, Taiwan, Hong

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