Venezuela ends gas imports after Perla startup
With the startup of the Perla gasfield, Venezuela has halted gas imports from Colombia and plans to reverse the flow of gas through the Antonio-Ricaurte pipeline
“From 1 July this year, Venezuela is no longer importing gas from Colombia. Colombia asked for Phase II in the agreement, which provides for the export of gas from Venezuela to Colombia from 1 January 2016, and Venezuela agreed”, Anton Castillo, the head of Venezuela’s state-owned PdV Gas, told Petroleum Economist.
The Perla gasfield, which was developed by Repsol and Eni with PdV entering the project at the production phase, is the first offshore gasfield brought into production in Venezuela. Castillo called it a “historic event for Venezuela”.
Output from the field is expected to ramp up to 450m cubic foot/day (cf/d) by the end of this year as more of the planned 27 wells at the field are brought into production. The partners plan to continue increasing production to 800m cf/day in 2017 before hitting a peak of 1.2bn cf/d by 2020. PdV is paying $3.69/m cf to the project partners for Perla gas, which is low compared with current Asian or European prices, but around a quarter higher than the US Henry Hub benchmark at time of press.
The new production is a major step forward for Venezuela’s long-struggling gas sector. The last president, Hugo Chavez, had outlined grand ambitions for gas-rich Venezuela to become a major regional and global gas player through a series of ambitious pipeline and liquefied natural gas projects. But the country hasn’t been able to turn its huge reserves into new production. A string of major offshore gas projects have been in limbo as PdV has struggled to attract investors into the sector.
As a result, production has been flat for several years at around 2.8bn cf/d, down from a peak of 3.5bn cf/d in 2007. The production decline has been crippling for Venezuela’s power grid, with many parts of the country experiencing persistent outages. Shortages have forced Venezuela to import gas from Colombia through the 225-km Antonio-Ricaurte pipeline since 2008 – PdV had initially planned to start exports to Colombia in 2012 – and the country has had to burn valuable diesel to keep electricity flowing.
Castillo says that, in addition to the exports, Perla production will allow gas-fired power generation to grow, replace diesel generators and feed petrochemicals plants.
PdV plans to export around 40mn cf/d to Colombia when gas starts flowing early next year, though it is not clear who will be buying the gas on the Colombian side.
Unlike in the country’s major Orinoco heavy-oil projects, where PdV has had difficulty enticing investors and bringing new projects online, Repsol and Eni were allowed to take the lead in developing the complex and costly Perla gasfield, which many analysts say helped the project succeed.