Joint venture partners planning a $5.6 billion LNG export project in Venezuela have signed a project agreement in Caracas.
After several years of negotiation, the four partners agreed to formalize the project and establish a jointly owned company, Sucre Gas SA, to develop gas fields off Venezuela's northeastern coast, lay pipelines, build an onshore liquefaction plant, and market the LNG internationally.
Project partners are state oil company Petroleos de Venezuela SA unit Lagoven SA 33%, Shell Gas Venezuela BV 30%, Exxon Co. International 29%, and Mitsubishi Corp. 8%.
VENEZUELAN MILESTONE
It is the first time that Pdvsa and international partners have reached the stage of setting up a joint company to carry out what the Venezuelan company cans a "strategic project." Venezuela's congress last year approved the joint venture as well as two other projects involving heavy oil. Due to low oil prices, however, the heavy oil projects are moving along at a snail's pace.
Gas supplies averaging 960 MMcfd will come via two pipelines from four fields that lie about 40 km north of Sucre state in 100 m of water. Rio Caribe, Mejillones, Patao, and Dragon fields were discovered by Pdvsa in 1978 82 (OGJ, Aug. 16, 1993, p. 28). Shell said the project will require 10 tcf reserves for the planned 30 year production period. The partners target exports of 6 million metric tons/year of LNG.
The liquefaction plant, located on the Paria Peninsula, is scheduled to begin commercial operation around the turn of the century. Plans also can for construction of five or six LNG carriers to transport the project's LNG supplies. Export markets have yet to be decided, but Europe and the U.S. are most likely.
Shell said 70% of project investment capital would be raised from international financial institutions. The remainder would be provided on a pro rata basis by the partners. More than $200 million has been invested in the project thus far, mostly by Lagoven.
