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Scant details emerge on petroleum pipeline project

The Council of Ministers has granted Petrochemicals (Cambodia) Refinery Ltd two years to assess the feasibility of developing two pipeline projects in Cambodia. Bloomberg
The Council of Ministers has granted Petrochemicals (Cambodia) Refinery Ltd two years to assess the feasibility of developing two pipeline projects in Cambodia. Bloomberg

Scant details emerge on petroleum pipeline project

The Council of Ministers has granted a petrochemical company two years to conduct feasibility studies for constructing a network of oil and gas pipelines to crisscross Cambodia, but details about the pipeline project and the company set to carry out the study are about as murky as the liquid contents expected to flow through it.

According to a document dated April 26 and released by the Council of Ministers, Petrochemicals (Cambodia) Refinery Ltd will have two years to assess the feasibility of developing two pipeline projects.

The first is an offshore oil pipeline from the Gulf of Thailand to Preah Sihanouk province. The second is an onshore pipeline network to run across seven provinces: Preah Sihanouk, Kampong Speu, Phnom Penh, Battambang, Siem Reap, Kampong Cham and Kandal.

Council of Ministers spokesman Phay Siphan said yesterday he was unaware of the government granting permission to Petrochemicals (Cambodia) Refinery to conduct feasibility studies. However, he welcomed private sector input as a “good approach”, and looked forward to seeing the results being presented to the government.

Meng Saktheara, secretary of state at the Ministry of Mines and Energy, confirmed that the feasibility studies had been commissioned, but was unable to provide clear details on Petrochemicals (Cambodia) Refinery or its background.

“These feasibility studies are very much in the early stage. And we hope the company will present a simple and easy plan,” he said.

Commercial registration records of Petrochemicals (Cambodia) Refinery could not be located yesterday.

It remains unclear whether the company is related to Cambodia Petroleum Company, which announced in 2013 that it would build an oil refinery in Preah Sihanouk province capable of processing 5 million tonnes of crude oil. To date, the refinery has seen little progress.

According to Saktheara, once the feasibility studies are completed, Petrochemicals (Cambodia) Refinery will have six months of preferential bidding treatment on construction. He stressed, however, that the government was unwilling to offer exclusive rights for companies to develop pipeline infrastructure.

“The government does not want to give exclusive rights to anyone,” he said. “After a company completes a study, they are awarded preferential treatment, but they will not be awarded exclusive rights.”

While Saktheara doubted that the feasibility studies would yield concrete results, he said private sector input would help the government develop a national pipeline master plan, provided his ministry was given adequate funding.

“The government needs to have its own pipeline master plan,” he said. “That is why we needed the Council of Ministers to allow the Ministry of Mines and Energy to use the funds from the studies to develop a pipeline master plan.”

He added that a pipeline network was a stepping stone for Cambodia to create its own state-owned petroleum company.

Earlier this month, the Post reported that Kith Meng’s Royal Group was in talks with two foreign state-owned petroleum companies – Indonesia’s Pertamina and the China National Petroleum Corporation – to conduct feasibility studies for an oil pipeline that would run from Sihanoukville to Phnom Penh.

Saktheara confirmed that feasibility studies by Petrochemicals (Cambodia) Refinery Ltd were not related to the Royal Group’s initiative.

Danish petroleum expert Tommy Christensen, CEO of Go4 Bunker (Cambodia) Co Ltd, said that any pipeline plan needs to have a segregated approach, with separate lines for crude oil extracted from drilling platforms and for distribution of refined petroleum products.

Additionally, a risk assessment is required, “as this is not just about capital investment, but also about strategic control of Cambodia’s natural resources”, he said.

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