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The action takes place in the Gulf of Siam (also called the Gulf of Thailand), bordered by the Malay Archipelago on the west and Cochin-China (part of Indochina) on the east; the ship sails out of the Meinam River (better known today as the Chao Phraya) that flows by the city of Bangkok at the very north of the gulf. (When Conrad took command of the Otago in 1888, he, too, sailed from Bangkok.)
The ship sails down the Cochin-China coast, and Leggatt makes his escape to the island of Koh-ring, off the coast of Cambodge (Cambodia or Kampuchea).
The shipboard setting emphasizes the isolation of the crew, as does the description of the gulf, which opens the story; the captain has left his friends behind, and he's the only stranger aboard. It's also noteworthy that so much 'of the story-in particular, Leggatt's arrival and escape-occurs at night, the time for dreams, the domain of the unconscious.
To further the association, both Leggatt and the captain wear sleeping suits.