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Gas bubbles and oil pools: mainly a buried treasure

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A scent of natural gas in Thailand's political air now contains a whiff of oil as well.

For the nation's energy future, the smell of oil may be sweeter.

Last year Thailand turned on its first pipeline of natural gas from an offshore well and discovered its first oil in an onshore strike as well.

So far, euphoria surrounding this buried treasure outpaces the reality of full production. But it is clear that Thailand may soon carry the unique distinction in Asia of being both a major energy producer and a food exporter.

At present Thailand must pay $3 billion a year for its oil -- all imported -- using up all the money from its top three foreign exhange earners: tourism, rice exports, and tapioca exports. Of all developing countries, Thailand ranks as the sixth-biggest oil importer.

By 1986, however, the country expects to reduce oil's role in total energy use from 75 percent to 46 percent, mainly with 526 million cubic feet of gas a day. The first 100 million cubic feet began flowing last November from a Union Oil platform through the longest submarine pipeline in the world (265 miles) into two power stations in Chonburi Province south of Bangkok. By the end of this year at least 200 million cubic feet will flow.

Thailand sits on one of the world's largest gas bubbles. Of 87 wells drilled in the Gulf of Thailand, 47 have found gas. According to the Petroleum Authority of Thailand, probable and proved reserves amount to 16.5 trillion cubic feet, perhaps the fifth-largest pool in Asia. More strikes are expected. Yet only one well is flowing with an agreed-upon price ($2.20 per 1,000 cubic feet at the wellhead). The Thais, having weathered the oil crisis well up to now, know they can afford to sit on the gas a while longer, and they have proved tough negotiators. Still, a deal with Union Oil is expected soon for several of its other 10 wells.

However, Texas Pacific Company Thailand Inc., owned by Canada's Seagram Co. and having found about half the reserves in deeper and more distant wells, has been left clutching the air. Talks on price are stalled.

''They have been talking to the press more than us,'' says Tongchat Hongladromp, governor of the Petroleum Authority of Thailand. ''We do not need TP's fields.''

By next year Texas Pacific may have to decide whether to sell out its concession after spending a decade and at least $125 million on exploration. Last year it joined with a Thai firm, the PSA Group, to propose a $3.2 billion project to liquefy the gas for export, which would be the largest single investment in Thailand's history.

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