ENRON PLANS TO TRANSPORT COLOMBIAN GAS

Enron Corp., Houston, has agreed to play a leading role in Colombia's first big gas transportation project. Under a 15 year transportation services contract between Enron affiliate Centragas, Barrancabermeja, Colombia, and state owned Ecopetrol, Enron is to build, own, and maintain a 357 mile, 18 in., gas pipeline to be laid beginning later this year between Ballena on the country's northern coast and Barrancabermeja in Central Colombia.

May 23, 1994

2 min read

Enron Corp., Houston, has agreed to play a leading role in Colombia's first big gas transportation project.

Under a 15 year transportation services contract between Enron affiliate Centragas, Barrancabermeja, Colombia, and state owned Ecopetrol, Enron is to build, own, and maintain a 357 mile, 18 in., gas pipeline to be laid beginning later this year between Ballena on the country's northern coast and Barrancabermeja in Central Colombia.

The agreement reserves for Ecopetrol 100% of the pipeline's initial capacity for 15 years following start of commercial operations late in 1995. Initial capacity of the pipeline hinges on final system specifications, but it is expected to be at least 100 MMcfd.

Enron is to provide only transportation services. It will not sell gas from the line.

The $190 million pipeline system is to move to the Barrancabermeja area gas produced jointly by Ecopetrol and Texas Petroleum Co. in Chuchupa field in Guajaira department. Buyers for the gas include a refinery in the region, unspecified power generators, and local distribution companies to be formed by Ecopetrol.

Enron intends to hold a 50% interest in the pipeline and is seeking equity partners for the remaining interest. In addition, Enron has agreed to arrange project financing and provide management and procurement services during construction and management and technical services after start of commercial operations.

Enron's subcontractors on the Ballena Barrancabermeja pipeline are Techint International Construction Corp., Buenos Aires, one of the world's largest pipeline construction contractors; and Promigas SA, Colombia's largest gas pipeline company. Techint is the project's turnkey construction contractor, while Promigas will provide field construction management services and operate the line.

Pipeline construction is to begin in 4 6 months, after Enron finishes arranging project financing and Ecopetrol has acquired all right of ways and environmental permits.

Overseas Private Investment Corp. agreed to insure the project against political risks such as currency inconvertibility and expropriation of assets.