Consortium plans trans-Thailand crude oil pipeline to expedite Middle East exports to N. Asia

A tripartite international consortium is undertaking a $450 million joint venture to build an oil pipeline across southern Thailand to expedite shipments of Middle East crude oil to North Asia.

Aug 6th, 2002

By an OGJ correspondent

BANGKOK, Aug. 6 -- A tripartite international consortium is undertaking a $450 million joint venture to build an oil pipeline across southern Thailand to expedite shipments of Middle East crude oil to North Asia.

When completed in 2005, the pipeline will provide a short cut for crude oil shipments from the Middle East to North Asian countries, diverting oil traffic that normally goes through the congested Malacca Straits and at a lower transportation cost.

Talal al-Zawawi Enterprise LLC, a privately owned Omani investment concern and independent Thai oil firm Sukhothai Petroleum Co. each holds a 45% stake in the scheme, while the Canadian industrial group SCN Lavalin Group Inc. has a 10% share. SNC Lavalin would undertake engineering and construction of the pipeline and related facilities.

The companies have formed a joint venture firm known as Taksina Pipeline Co. to undertake the project, the first of its kind in Thailand, according to company executives.

Project details
The scheme essentially calls for laying a 46-in. pipeline 160 km from Satun on the Andaman Sea coast to Songkhla on the Gulf of Thailand coast.

It will include two storage terminals, each with crude storage capacity of 10 million bbl, on both ends of the pipeline that will be laid underground along Thai highways.

Also, there will be two single-buoy moorings installed about 15-20 km off the coasts, to facilitate loading and offloading of crude oil from 200,000-300,000 dwt very large crude carriers.

At the moment, only tankers with maximum capacity of 150,000 dwt are allowed to transit the Malacca Straits.

The pipeline would have crude oil throughput capacity of about 1 million b/d, compared with 12 million b/d of crude oil shipped through the Malacca Straits every day.

By using the pipeline, the shipment of crude oil from Middle East to countries such as Japan, South Korea, China, and Taiwan can be cut by about a few days.

Companies involved in oil shipments from the Middle East to North Asia are targeted as users of the pipeline and related facilities.

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