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Friday, May 11, 2007

Ambitious Pipeline - Why Build 312km when 100km Will Do?

This project on surface appears interesting but I suggest it will be a strategic error with grave consequences if we do not involve Thailand in an ASEAN project.

Thailand may not appear such an attractive place for investment right now but if we study the map of Thailand it seems that this project if done exclusively by Malaysia will become obsolescent just three years after investors decide to build a similar scheme just north of the border.
(click on Thailand map to check distances)

If this is solely a private investment, then taxpayers would not be concerned but if some of the RM24billion will involve taxpayers' monies we need to be concerned.

A JV with Thailand would require a pipeline only about 100km long and that means the investment could be reduced to perhaps 60% of the RM24b or RM14.4b and the cost of pumping the oil would also be reduced to one-third the distance.

If we study the map of Thailand again, a possible route for the Thai-Malaysia JV could start in Perlis and end south of Songkhla, subject to deep-water facilities.

This new route will also preserve much of the pristine forests in the north of Malaysia and with the shorter route it will be easier to safeguard. Plus Kota Bahru will be spared from any major oil spills.

As global warming increases, the passage to the Far East via northern Europe will also be see more ships sailing that way and avoiding the Malacca Straits for a few months and this can happen within the next 10 years.

Introducing more economic activities in south Thailand of the non-tourist type may improve the political situation there and create more economic benefits. Hopefully the Thais will then stay on their side of the border and we will have fewer refugees fleeing the unrest.

Such a joint venture will be a "win-win" solution for everyone.

Graphics: Thanks to http://www.maps-thailand.com/ and malaysiakini


A Voice (of Another Brick in the Wall) said...

I would partly agree with you. Thailand have been dreaming of a kra canal for decades. The way I see it, it is just a question of time to see the financial, geoglobal and socio-political issues sorted out.

From perspective of only transport to short circuit the distance from South China Sea to Straits of Malacca, it is too grandiose. But if Kelantan were to start producing its off shore gas/oil, it would be truly relevent. Off course, the so-called Kelantan reserves has never been really known publically in certain circle.

In addition, the perennial concern from the rising risk of the Straits of Malacca busy sea lane is one favourable factor.

At the end of the day, what is the project vialibity and the umbers?

As for my political conspiracy mind ..., I smell a political fund raising exercise for the grand design to begin a political dynasty in the LKY mould.

I wouldn't discount today's Langkawi meet has this thang in mind. Spore has always been known to circumvent any possibility for a Canal of Kra to materialise.

PeterP said...

Sorry the second para should read

The cost of our proposed pipeline is as usual out of this world.

PeterP said...

China is planning a pipeline (Sino-Burma Oil Pipeline)linking Myanmar's deepwater port of Sittwe with Kunming in China to help import oil and bypass the Straits of Malacca.

The cost of our pipeline is as usual out of this world.

A white elephant of the future ??