Partners in Venezuela's $2.9 billion Cristobal Colon liquefied natural gas export project have signed a preliminary development agreement.
State owned Lagoven SA 33%, Shell International Gas Ltd. 30%, Exxon Services Venezuela Inc. 29%, and Mitsubishi Corp. 8% late last month signed the agreement. The three international companies were chosen as joint venture partners last summer (OGJ, July 2, 1990, p. 31).
The contract calls for the partners to conduct studies of the project's economic feasibility. Subject to preliminary study results and negotiation of fiscal terms, the project then would proceed to a joint venture agreement with establishment of a joint venture company. That agreement in turn would require approval by Venezuela's congress. Partners then would complete feasibility studies and reach a decision on whether to proceed.
PROJECT DETAILS
The project calls for development of Rio Caribe, Mejillones, Patao, and Dragon gas fields in the Caribbean Sea off the northeast tip of Venezuela's Paria Peninsula, laying of subsea pipelines to shore and a trunk line across the peninsula, and installation of processing/liquefaction/tanker loading facilities at Mapire Bay along the peninsula's southern coast.
LNG capacity currently is planned at 4.6 million tons/year with exports planned to the U.S. and potentially Europe. It is expected to go on stream in 1997.
Twenty wells drilled over the years have proved reserves of about 5 tcf and probable reserves of about 11 tcf in the four fields about 24-27 miles offshore.
The Institute of Gas Technology's LNG Observer says gas in Rio Caribe field is very rich and will be used to make refrigerants for the liquefaction plant. Gas in the other three fields averages 97% methane.
Plans call for about 55 development wells to be drilled from four to eight platforms in about 394 ft of water to pay depths averaging 7,543-8,202 ft.
Initial production will be 735 MMcfd. Gas will be liquefied in two 2.3 million ton/year trains and shipped in three new LNG tankers.
The LNG Observer places the current wellhead price of Venezuelan gas at about 50/MMBTU. It's constrained by ample supplies of low cost hydropower. LNG Observer quotes Lagoven officials as forecasting Venezuelan gas prices at 50 to $1/MMBTU soon and shipping costs at another 40/MMBTU.
A price of $2.50/MMTBU for Venezuelan LNG landed on the U.S. East Coast would yield a wellhead netback of about 50/MMBTU, says consultants Jensen Associates.
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