The Thai Canal, also known as Kra Canal or Kra Isthmus Canal, refers to the idea of a large canal that would connect the Gulf of Thailand with the Andaman Sea across southern Thailand. It is envisaged that such a canal would improve transportation in the region, similar to the Panama Canal and Suez Canal.
A canal through the Kra Isthmus, which would shorten shipping times around Asia, was suggested as early as 1677. Thai King Narai the Great asked the French engineer de Lamar to survey the possibility of building a waterway to connect Songkhla with Marid (now Myanmar), but the idea was discarded as impractical with the technology of that time. In 1793, the idea resurfaced; the younger brother of King Chakri (Rama I) suggested it would make it easier to protect the west coast with military ships. In the early 19th century, the British East India Company became interested in a canal. After Burma became a British colony in 1863 with Victoria Point opposite the Kra estuary as its southernmost point, an exploration was undertaken, again with negative result. In 1882, the constructor of the Suez canal, Ferdinand de Lesseps, visited the area, but wasn't allowed to investigate in detail by the Thai king. In 1897, Thailand and the British empire agreed not to build a canal there, to protect the regional dominance of the harbour of Singapore.
The width of the Kra Isthmus at its minimum is only 44 km (27 mi), but the height of the interior mountain chain is 75 m (246 ft). Compare this to the Panama Canal: length of 77 km (48 mi), but highest point at the Culebra Cut was only 64 m (210 ft). The Panama Canal passes this point at a height of 12 m (39 ft) (canal bottom) and 26 m (85 ft) (water line), thus ships have to be lifted with locks to a height of 26 m (85 ft) above the ocean. The Suez Canal is 192 km (119 mi) long but passes entirely through a flat area (which was historically flooded by seas before).
The length on land of a proposed Thai canal could be anywhere between 50 and 100 km (30 and 60 mi) depending on the route chosen. At a depth of 25 m (82 ft) below sea level the width of the Kra Isthmus is about 200 km (120 mi).  At 50 m (160 ft) below sea level this becomes about 400 km (250 mi). 
Competition with Strait of Malacca
As of 2011, an estimated 15.1 million barrels of oil pass through the Strait of Malacca, which would be the canal's nearest alternative. Excluding port fees and tolls, it costs about US$0.00106 per ton-mile to operate a 265,000 DWT double-hulled tanker in 1995 dollars. Thus, assuming a one-way distance saved of 600 kilometres (370 mi),[note 1] about 6.5 barrels per ton of crude oil,[note 2] and adjusting to 2011 dollars, the Thai canal could hypothetically reduce the cost of crude by about US$0.09 per barrel, which, if the entire traffic of the competing strait were diverted, would reduce in annual oil shipping costs by US$493 million, disregarding canal fees and the return trip costs of the empty tanker.
In the 20th century the idea resurfaced several times again, now changing the preferred route to somewhere in southern Thailand, to connect Bandon Bay near Surat Thani with Phang Nga. A Japanese plan for a canal in 1985 would have used over twenty nuclear devices each roughly twice the explosive energy of the bomb dropped on Hiroshima. The latest proposed site is across Nakhon Si Thammarat and Trang Provinces. If finished, it is believed that the canal would bring an economic boost to the nearby area and the whole country. The canal would compete directly with ports in the Strait of Malacca area, including Port Klang and Singapore. As such, there is a long standing rumor in the region that Singapore and Malaysia have been trying very hard to prevent the construction of the project by bribing Thai officials to vote against the construction of the project in the Bangkok parliament. The conspiracy theory is widely believed given the incentive that both of these countries have in protecting their own economy and industries who stand to lose a substantial sum of business if the project was erected.
Canal opponents have raises the following objections to its construction: 1) A canal will divide the country physically and pose a security risk; 2) Demand for transit will not meet expectations; 3) The excavated soil needs to be dealt with; and 4) Environmental concerns. It was feared that a canal would separate the four southern-most provinces from the rest of the country and allow secessionist movements to develop.
This is also a reason for recent interest in the canal. The Strait of Malacca, just under 1,000 kilometres (620 mi) long, is narrow, less than 2.5 kilometres (1.6 mi) at the narrowest, and just 25 metres (82 ft) deep at its shallowest point. It is heavily used by oil tankers and bulk carriers. Some 80 percent of Japan's oil supplies pass through the Straits. Any planned canal in Thailand would mean that large ships could travel through the region from India and on to China and Japan without passing through the Strait of Malacca.
In 2005 an internal report prepared for U.S. Secretary of Defense Donald Rumsfeld was leaked to The Washington Times, spelling out China's strategy of underwriting construction of the canal across the Kra Isthmus complete with Chinese port facilities and refineries, as part of its "string of pearls" strategy of forward bases and energy security. The Chinese plan called for construction over ten years employing roughly 30,000 workers and costing between US$20–25 billion.
In early-2015, calls for yet another feasibility study of the canal have been put forward, a leading proponent being the Thai-Chinese Culture and Economic Association of Thailand (TCCEAT). Supporters of the canal believe that it would end Thailand's economic slump and make it a "global shipping and economic hub, rivalling the Panama Canal". On 15 May 2015, a memorandum of understanding was signed by the China-Thailand Kra Infrastructure Investment and Development company / 中泰克拉基礎設施投資開發有限公司 in Guangzhou to advance the project. On 19 May 2015 the Thai government denied reports that an agreement had been signed with China to construct the canal. The canal would take an estimated ten years to complete at a cost of US$28 billion. The idea of a Kra Isthmus canal has been vetted in modern times since the 1930s, but has never materialized due to high cost and environmental repercussions.
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- Source says 1,200-1,300 km, however this appears to be a round-trip value (i.e., includes the return trip). The transportation cost source used does not appear to include the cost per mile of empty tankers, so we'll ignore the second half of the round trip for now.
- Source says 272 gal per ton; knowing that 1 barrel is 42 gal, we get 272/42 ~= 6.48.
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