Venezuela President Hugo Chavez Signs Agreements For Natural Gas Joint Venture

This is from Petroleum World:

Puerto La Cruz, Venezuela
Petroleumworld.com, Sept 22, 2008

Venezuela signed various agreements Friday on the Delta Caribbean offshore natural gas blocks and Mariscal Sucre LGN Gas (CIGMA) project, located in Guiria, Sucre State with foreign oil companies from the U.S., Asia and the Middle East that will guaranty the gas resources needed to develop the CIGMA venture.

President Hugo Chavez and officials from PDVSA, signed various memorandum of understanding agreements for joint-ventures companies that will produce gas in two trains in the CIGMA LNG Project and offshore exploration agreements that will produce gas to be pipe for LNG trains in the CIGMA LNG project.

The joint ventures involves a first LNG train producing 4,7 millions of tons from the CIGMA project with Deltana platform gas, with an expected investment of USD $6.4 millions. In this venture, PDVSA with a 60% stake will work with Galp Energy with 15%, Chevron with 10%; Qatar Petroleum 10%, and Japanese companies Mitsubishi Corp and Mitsui & Co.with 5%. The train is expected operational in 2013.

The second train will also produce 4,7 millions of tons and PDVSA with 60% is to work with Portugal's Galp with 15% stake, Mitsubishi and Mitsui 5%, as well as Itochu 10% and Argentina's Enarsa 10%. An investment of USD$ 5.2 millions is expected and the train will also be operational in 2013.

The memorandum of understanding for the exploration for gas in the two areas awarded, La Blanquilla and La Tortuga with and investment expected of USD$ 5.7 millions, was sign to form a joint venture with PDVSA that will hold a 60% stake, Russia's Gazprom will own 15%, Italy's Eni will participate with 10%; Malaysia's Petronas, will hold 10%; and Portugal's EDP, will control 5%.

Blanquilla and Tortuga areas are located in the Caribbean sea around 60 nautical miles North and West respectively of the island of Margarita, just off the Venezuelan coast. The exploration of these blocks is expected to cost USD$700 million.

The gas to be produce in this blocks is to supply natural gas to a CIGMA liquefaction plant and petrochemical complex and would require an investment of roughly USD$19 billion.

Venezuela said it has proven natural gas reserves of 180 trillion cubic feet, and potential reserves an additional 166 trillion cubic feet, half of that located in off-shore fields.

The CIGMA gas initially would seek to supply the needs of the local economy, and the rest will be exported to markets in Japan, South America, the Caribbean, Europe and Asia Venezuelan President Hugo Chavez said during the ceremony.

Story by Elio Ohep, editor of Petroleumworld
Petroleumworld 19 09 08