By Fred Ojambo

July 2 (Bloomberg) -- Petroliam Nasional Bhd., Malaysia’s state-owned oil company, may begin exporting natural gas from Ethiopia in five years, when production starts at a plant it is building in the country, a Mines Ministry official said.

Fields being developed by Petronas in Ethiopia contain as much as 4 trillion cubic feet of gas, Eshetu Chala, senior economist at the Addis Ababa-based ministry, said in an interview yesterday in Kampala, Uganda. Annual production figures have yet to be determined, he said.

“After five years Ethiopia will become a producer of natural gas,” Chala said. “Our focus is on the export sector since the local market will consume little.”
Petronas paid $80 million in 2007 for the rights to develop the Calub and Hilala gas fields in Ethiopia’s Ogaden basin, according to the Reporter, an Addis Ababa-based newspaper. The Malaysian company may also build a gas-treatment plant and a gas pipeline to a port in neighboring Djibouti at a cost of $1.9 billion, the newspaper said.

“Drilling is going on, but the output capacity will be determined after an appraisal of reserves,” said Chala.

The Reporter said last month that Petronas suspended work in the Ogaden basin because of security problems. The suspension came after a British geologist was killed in April by bandits, it said. In May, the rebels said they had captured the Hilala gas field. The government denied the attack, saying the fighters were “fabricating rumors.”
Azman Ibrahim, a spokesman for Petronas in Kuala Lumpur, didn’t respond to a voicemail request for comment when called outside normal business hours. Rizan Ismail, Petronas’s country manager for South Africa, didn’t return a call seeking comment.
Rebels
Ethnic Somali rebels from the Ogaden National Liberation Front are seeking independence for the Ogaden region, an arid area twice the size of England largely inhabited by nomads. In April 2007, the group attacked a Petronas exploration site operated by China’s Zhongyuan Petroleum Exploration Bureau, killing nine Chinese workers and 65 Ethiopians.

Ethiopia has issued 16 natural gas concessions to nine companies, with Petronas the only one in a “more advanced” stage of development, Chala said. The country has six exploration basins covering 350,000 square kilometers (135,136 square miles), he said.

--With assistance from William Davison in Addis Ababa. Editors: Paul Richardson, Heather Langan.

To contact the reporter on this story: Fred Ojambo in Kampala via Johannesburg at pmrichardson@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net.