ASEAN Gas Integration
27 Pages Posted: 30 May 2018
Date Written: May 30, 2018
The ASEAN region's most ambitious mega-project, the trans-ASEAN Gas Pipeline (TAGP) aims to connect the gas reserves of the Andaman Sea, Gulf of Thailand and South China Sea to the urban and industrial demand centres of Southeast Asia. The economics prospects for the TAGP are poor, dependent as it is on the uncertain development of the vast but costly reserves of the East Natuna basin. Developments in the past few years have made it apparent that the ability to directly import LNG has become a preferred option among ASEAN member countries. It facilitates access to gas supply quickly and at low cost, to meet the energy needs of the association's member economies. Thus the example of Singapore that has built LNG re-gasification facilities to reduce its reliance on piped natural gas imports from Malaysia and Indonesia illustrates these arguments. If it is not likely that the TAGP project as envisioned by ASEAN officials will be a major factor in CBI investment commitments in the region, the concept of LNG trading hubs which has received significant attention more recently, both in policy and industry circles, faces equally challenging hurdles.
Keywords: cross-border infrastructure; Liquified Natural Gas (LNG); gas trading hubs; regional economic integration
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