Venezuela focuses on Mariscal Sucre and Deltana Shelf projects

Sep 04, 2002 02:00 AM

Venezuela’s oil company subsidiary PdVSA Gas is directing its efforts to the development of its Mariscal Sucre and Deltana Shelf offshore projects, as well as to projects such as the Western Cryogenic Complex, the interconnection of the Central and Western transport systems, the interconnection with the Colombian Guajira and the Fibre Optics project. Over the next five years, investments in gas for some $ 10 bn are expected by the Venezuelan gas sector.
At present, the sector in the country is dedicated to the development of non-associated gas exploration and production strategies, with the main objective of increasing gas availability in the country. In this direction, Petroleos de Venezuela, the national energy company, is encouraging initiatives that promote the development of reserves on land and offshore.

Venezuela recently established the legal, fiscal and pricing bases that will enable private sector participation in the exploration and production of non-associated natural gas, as well as in the rest of the gas business chain. In this sense, and with the aim of increasing production from its already abundant gas reserves, last year the Venezuelan Ministry of Energy and Mines awarded E&P licenses for six free-gas areas.
Additionally, the Venezuelan government signed agreements with private companies for the accelerated development of offshore gas reserves in the east of the country. In this manner, agreements were reached with British Gas, ChevronTexaco, Statoil and TotalFinaElf, which established the terms and conditions to begin the process of license awarding for 3 blocks.
A framework agreement was also signed with Shell and Mitsubishi on the Mariscal Sucre project. PdVSA meanwhile, using its own efforts, stimulates production at its main gas production and transformation centre, located in Anaco, State of Anzoategui.

PdVSA Gas, the state-owned gas company, plans investments of over $ 10 bn in a five-year horizon, principally on the Anaco Development, Deltana Shelf, Central-Western Interconnection, Western Cryogenic Complex and Mariscal Sucre projects. The company also has under study projects such as an interconnection with Colombia, an optical fibre network, expansion of transport systems, and the construction of a pipeline to the Island of Margarita, in the Caribbean.
The upgrading of the infrastructure at Anaco, the country's main gas centre, becomes the prime objective in the corporate determination to add new free-gas volumes to reserves and to maximize the production of non-associated gas for the purpose of meeting national market needs.
Investments required by the Anaco Development project are estimated to be in the order of $ 2.9 bn which will go to well drilling and workovers, as well as other production-related operations. With an area of 8,280 sq km, Anaco must also centralize and automate 7 operation centres, 55 production stations, 28 compression plants and 9 water injection plants.

Mariscal Sucre project
This project entails the development of free-gas fields located offshore north of the Paria Peninsula, in the State of Sucre, together the processing of the gas in a liquefaction plant to be built on shore, as well as its export to the more attractive regional markets in the form of LNG. Additionally, the supply of major unprocessed volumes to the internal market is also being considered.
After a pains-taking and transparent partner selection process, the government signed a framework agreement with Shell Gas & Power and Mitsubishi. The document defines the share ownership of the partners as 30 % for Shell and 8 % for Mitsubishi, while the government retains 60 %, with the remaining 2 % being reserved for national investors.

The development plan contemplates the production of 1,050 mm cfpd, of which 750 mm cfpd would go to the liquefaction plant, with the remaining 300,000 mm cfpd potentially being supplied to the internal market. The liquefaction plant in question would be built to the south of the Paria Peninsula, and have a4.7 mm tons processing capacity and include all installations required for gas treatment and liquefaction, including LNG storage and shipping. Additionally, installations for the treatment of the gas to be supplied to the internal market, and for the stabilization, storage and shipment of condensate, have been foreseen.
Taking into consideration the considerable potential of the gas resources to be found North of Paria, the Gulf of Paria and the Deltana Shelf, it is felt that the Mariscal Sucre project could provide the basis for the development of a large gas, petrochemical and petroleum industrial complex on the Paria Peninsula.

Deltana shelf
With the aim of increasing free-gas reserves, PdVSA Gas carries out offshore drilling in marine areas located more than 250 km from Venezuela's Delta Amacuro coast, near the Trinidad & Tobago border. Exploration investment is estimated at $ 375 mm, and will be carried out over two years. A dozen exploration and outpost wells are to be drilled by the floating platform "Pride Venezuela". which can operate in water depths between 150 and 1,500 feet and drill wells up to 25,000 feet deep.
The exploration drilling of the Dorado 1X well identified multiple prospective reservoirs, rich in free gas and condensate, one of which tested at an average of 62 mm cfpd of natural gas and 1,600 bpd of 54 degrees API condensate, thereby proving the area's high potential. A second well is currently being drilled.
The Venezuelan Energy and Mines Ministry expects to complete the process of awarding the first three blocks in late November or early December next, and has already signed an understanding agreement with British Gas, Statoil and ChevronTexaco.

Central-Western Interconnection
The Central-Western Systems Interconnection project has the aim of linking the Central-Western Transport System (in Moron, Carabobo) with the Ule-Amuay Transport System (in Rio Seco, Falcon) for the purpose of supplying unfilled gas demand in western Venezuela (estimated at 450 mm cfpd), as well as liberating liquids for export and boosting regional development in the pipeline's area of influence. Investment in this project is estimated at $ 430 mm. The project consists of the construction of a 298 km and 30-inch diameter gas pipeline and the installation of a new compression plant with a 60,000 HP nominal capacity in Moron.

Western Cryogenic Complex
This project arises as an alternative to optimise the natural gas processing scheme in the west of the country. The construction of the Western Cryogenic Complex implies disbursements estimated at $ 470 mm and entails: decommissioning the current Lamar Liquido, TJ-2,TJ-3, and NGL I and II extraction plants (Zulia), the construction of a cryogenic plant with a 950 mm cfpd capacity, together with the construction of a new 35,000 bpd natural gas liquids fractionation train at the Ule Complex.
With the coming on stream of this Complex, the company expects to increase its production of ethane and natural gas liquids (NGL) to 64,000 bpd of NGL and 35,000 bpd of ethane. Additionally, it will enable it to reduce the system's operation and overall maintenance costs, as well as expanding the gas business in the region. This last consideration is of major importance, as the new production scheme, not only meets all of Pequiven's ethane requirements for its olefins complex, it also liberates a considerable volume of propane that could be exported.

Transport systems
Venezuela has 5,000 km of gas pipelines divided into 4 transportation systems. Due to the growth of the sector and local market requirements, the construction of a further 1,000 km of pipelines, with an investment of $ 1.3 bn is foreseen, together with a further $ 1 bn investment in expansions of the existing systems. For several years now, the feasibility of building an underwater pipeline to Margarita Island in the Caribbean has been studied. The aim is mainly to supply the electricity generation sector there.

Colombia interconnection
PdVSA Gas, Ecopetrol and ChevronTexaco recently completed a joint study that shows, from legal, technical and economic points of view, the feasibility of building a pipeline from the Colombian Guajira to Maracaibo and its area of influence in western Venezuela. The project involves the construction of a pipeline which would transport between 150 and 200 mm cfpd of natural gas from fields operated by Chevron-Texaco in an association with Ecopetrol in the Colombian Guajira.

Fibre optics
The fibre optics project being put forward by PdVSA Gas entails the installation of a national telecommunications network that will provide an interurban transport and interconnection service ("carrier's carrier") to local telephony, cellular, data transport, cable TV and Internet suppliers currently operating in the country. The fibre optics network would make use of the strip of land adjacent to PdVSA's hydrocarbons pipelines, the third-party use of which is restricted.
The investment required by the project is in the order of $ 150 mm, and contemplates the installation of 2,000 km of optic fibre cable, some 1,200 km of which would correspond to the PdVSA pipeline routes. PdVSA Gas will soon initiate a competitive process to select partners expert in telecommunications that are willing to enter into a joint venture with PdVSA Gas, in which the participating partners would supply the capital required, and PdVSA Gas would contribute the right to install such an optic fibre network in the rights of way corridors adjacent to its pipelines.

The Venezuelan national oil company, PdVSA is valued at $ 150 bn and is the largest Latin American petroleum company and one of the ten largest companies in the world. Venezuela is the fourth largest petroleum exporting country in the world, oil production is Venezuela’s principal economic activity.

Source: Dow Jones
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