The Australian Pipeliner: What is the role of the ASCOPE Gas Centre?

Allen Beasley: The ASCOPE Gas Centre was established in March 2005 in Malaysia and will function as a reference centre on all matters relating to the gas industry in the ASEAN region. The centre is an initiative of the ASEAN Council on Petroleum (ASCOPE), which consists of the National Petroleum Companies of the Members of ASEAN – Brunei Darussalam, Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Gas markets are growing strongly in the ASEAN region, especially for power generation, and one of the important roles of the Centre will be to undertake studies and provide independent advice for the implementation of the Trans ASEAN Gas Pipeline and related infrastructure projects.

AGC represents an exciting opportunity for ASEAN regional cooperation in the gas sector, including the sharing of best practice industry strategies, information and development of regional cooperative programs. The Centre will further enhance ASEAN’s technological capability in the gas industry through effective collaborative research and development, staff development and training. AGC will consist of a relatively small core group of industry professionals, complemented by industry secondees from member companies who will work on specific projects at the Centre.

The Centre has been established within the grounds of Petronas Research and Scientific Services at Bangi, about 24 kilometres south of Kuala Lumpur City and will be funded by Petronas, Malaysia’s National Petroleum Company, for the first five years of its operations.

TAP: What activities are currently underway at the Centre?

AB: The ASCOPE Task Force responsible for the Trans ASEAN Gas Pipeline Project has identified two important projects which are now being addressed by AGC:

• Development of recommendations on gas transit policies and arrangements between countries in the ASEAN region, including an examination of third party access to spare pipeline capacity
• Technical harmonisation including areas such as gas quality, pipeline design/construction, integrity management, health safety and the environment.

As an immediate priority, AGC is working with its members to develop an agreed five-year Business Plan. This will allow its members to be directly involved in the setting of AGC’s priorities and program development. The mix of projects is likely to include economic, technical and collaborative research and the identification/communication of best practice methods across the gas chain.

TAP: What are the similarities with your role in APIA and what lessons can be applied?

AB: Given the role of pipeline infrastructure in delivering gas to ASEAN markets - as demonstrated by the active pursuit of the Trans ASEAN Gas Pipeline and other developments - I anticipate that infrastructure issues will be a central consideration in the future work of the Centre.

The really exciting thing about this part of the world is the great opportunities and prospects for natural gas - ranging from maturing markets to emerging markets. There are very strong moves towards bilateral gas trade between ASEAN countries and - like Australia - pipelines are expected to play an ever-greater role in energy security and reliability in this region. Many of the issues that emerge in the integration of gas markets and infrastructure are under active consideration - including energy policy, new technology, research, standards and harmonisation of technical issues such as gas quality. The industry participants are committed to discussing and resolving issues at an early stage and this is one area where AGC will play a crucial role. Although there are some important differences from my previous role at APIA - for example the much greater role played by off-shore pipelines in the ASEAN region - many of the principles and some of the issues are remarkably familiar. I am still on a steep learning curve on the specifics of this region, but I am already finding it a remarkably informative and rewarding experience.

TAP: What are some of the challenges in co-ordinating between nine member countries rather than working within one?

AB: In some ways my Australian experience – dealing with as many as eight states and one national government on some issues – has prepared me for the work that lies ahead in this region!

I think it is always important to recognise and respect the sovereign role of governments. I have been impressed by the high level of industry based cooperation and dialogue - most notably through ASCOPE and its Committee. I regard this focus on the energy business as a very positive attribute for the region which will make the work of the Centre highly relevant to the future gas market and infrastructure needs of the region. ASCOPE has a very strong track record on consensus based decision-making. I look forward to adding value to this philosophy through AGC’s pro-active efforts which will concentrate on identifying the issues, assessing the options and coming to clear recommendations in consultation with members.

TAP: How long term is ASCOPE thinking, and how do they see the state of pipelines at the end of this period of time?

AB: One of the key drivers will be the development of the Trans ASEAN Gas Pipeline which is envisaged to take place progressively over the period until 2020. The planning work for this project is already well underway and shows the determination of countries in the ASEAN region to ensure long-term security and reliability of gas supply.

With the prospect of the TAGP becoming a commercial reality over the next 15 years it is really impressive to see that countries in this region are already discussing many of the emerging issues. This includes the threshold issues involved in the integration of single-supply single market arrangements into the multiple supply - multiple customer arrangements generally expected to be a feature of the Trans ASEAN Gas Pipeline.

TAP: What can Southeast Asia learn from other parts of the world, and vice versa?

AB: There is a genuine openness in the relationships between national petroleum companies in this region. This includes a desire to build on the strengths, capabilities and experience already gained as a result of the considerable amount of pipeline and gas infrastructure development that has been successfully completed and is being operated in ASEAN.

Topics such as operational practices, research, the environment, safety and training are not only of interest to ASCOPE – they are relevant and of interest to the gas industry around the world. One of the key areas AGC shall be investigating will be the development of value adding relationships with the wider international gas and infrastructure industry. The gas industry in this region has much to offer the international community in terms of experience in professional practices and programs and the people here already have a strong international focus. Notwithstanding the very clear need for the gas industry to focus on commercial matters, there are important areas where information exchange and collaboration can benefit all participants by reducing risks and reducing costs.

TAP: What opportunities are there for Australian pipeline companies in the region?

AB: Australian pipeline companies have been involved in a number of very significant projects in this region over the years. The GDP growth rate of ASEAN countries is averaging around six percent per annum. Given the role of natural gas in power generation alone, pipeline infrastructure can be expected to grow strongly over the next few years.

Many pipeline related projects have been recently completed, are underway or at the advanced design/engineering stage. This includes a range of onshore and offshore projects. In many cases more detailed information is readily available on the website of major owner/developer companies. Furthermore, many organisations have developed detailed planning and policy documents which are publicly available and provide useful information on potential longer-term projects.

One AGC initiative – in association with the Malaysian Gas Association and PetroMin - was the inaugural Asian Pipeline Industry Conference and Exhibition which was held in Kuala Lumpur on 27 and 28 September. The program included an impressive list of international and local speakers who were warmly received by all delegates who attended.