PDVSA, IOCs to build two LNG liquefaction plants

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Mar. 9 -- Venezuela's Petroleos de Venezuela SA has signed agreements with several international oil companies to form temporary consortiums for developing two LNG liquefaction plants.

"In these deals these companies become responsible for the engineering phase that represents a $200 million investment," said PDVSA board member Eulogio Del Pino at the signing ceremony.

The two groups will design, build, and operate two 4.7-million-tonne/year liquefaction plants at the Gran Mariscal de Ayacucho gas industrial complex in the northeastern state of Sucre, along with pipelines needed to supply them with natural gas.

PDVSA said the plants at Gran Mariscal, which it said would be the "most important gas industrial complex in Latin America," will process 28.8 tcf of natural gas from the Deltana platform and the Mariscal Sucre project in the Paria Gulf.

It said that $6.4 billion will be invested in the first liquefaction plant, while the consortiums will invest about $5.2 billion in the second facility. Both figures include extraction and pumping installations for developing the fields.

PDVSA will control both of the new companies with a 60% stake in each. One company is comprised of Galp Energia 15%, Chevron 10%, Qatar Petroleum 10%, and Mitsubishi and Mitsui jointly sharing 5%. The second company includes Galp Energia 15%, Energia Argentina 10%, Itochu 10%, and Mitsubishi and Mitsui 5%.

According to Ruben Figuera, PDVSA manager for joint ventures, the state firm plans to deliver 2.7 million tonnes/year of LNG starting in 2014 from each of the first two trains to "strategic markets" such as Argentina, the Caribbean, and Brazil, while 2 million tonnes/year from each train will be sold on the open market.

Delta Caribe Oriental
PDVSA said the accords announced this week are part of the process aimed at creating two joint companies for the Delta Caribe Oriental project.

Total investment in the Delta Caribe Oriental project will reach $19.6 billion, including development of offshore Blanquilla and Tortuga fields and a third train, which will send 3 million tonnes/year to the open market and 1.7 million tonnes/year to strategic markets, PDVSA said.

Partners in the $1.4 billion third train include Gazprom 15%, Petronas 10%, Eni SPA 10%, and Portugal's EDP 5%.

The new joint ventures are part of a strategy President Hugo Chavez's government developed to boost Venezuela's gas output to 11.5 bcfd in 2012 from 6.3 bcfd in 2007.

Contact Eric Watkins at hippalus@yahoo.com.

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