VENEZUELA'S LNG PROJECT PARTNERS SIGN AGREEMENT

Venezuela's long negotiated liquefied natural gas export project has a green light from project partners. Petroleos de Venezuela unit Lagoven SA, Shell International Petroleum Co. Ltd., Exxon Corp, and Mitsubishi Corp. late last month signed a joint venture agreement for their $4 billion project to develop gas fields off eastern Venezuela and export the gas as LNG, mainly to the U.S., by 2000. The partners in the Cristobal Colon LNG export project estimate preliminary investments of about

April 5, 1993

2 min read

Venezuela's long negotiated liquefied natural gas export project has a green light from project partners.

Petroleos de Venezuela unit Lagoven SA, Shell International Petroleum Co. Ltd., Exxon Corp, and Mitsubishi Corp. late last month signed a joint venture agreement for their $4 billion project to develop gas fields off eastern Venezuela and export the gas as LNG, mainly to the U.S., by 2000.

PARTNERS' OUTLOOK

The partners in the Cristobal Colon LNG export project estimate preliminary investments of about $200 million for appraisal drilling and development studies the next 2 years.

But before they proceed with further investments, the partners stipulate the applicable tax rate be cut from the current 60% to the 30% maximum corporate tax rate for activities other than oil and gas.

In addition, Venezuela's congress must approve the agreement, ensnarled in negotiations for more than 2 years.

Lagoven hopes approval will be received before congress ends in August.

PROJECT STATUS

Julius Trinkunas, president of Lagoven, said the group will have completed by mid-1993 its estimate of gas reserves in the Mejillones, Patao, Rio Caribe and Dragon fields north of Paria Peninsula in the Caribbean Sea.

To date, the group has acquired and processing 71,000 line km of seismic data.

The liquefaction plant planned for the Paria Peninsula would have capacity of 4.6 million metric tons/year.

Trinkunas said first commercial shipments of LNG would be sent to Europe or North America by the end of the decade.

Cristobal Colon interests are: Lagoven, 33%, Shell 30%, Exxon 29%, and Mitsubishi 8%.

Until the agreement was signed Mar. 25, the project was variously delayed by the outlook for U.S. natural gas prices and Shell's concerns that some of its gas technology might be available to competitor Exxon (OGJ, Feb. 8, p. 33).