BOGOTA Oct. 12, 2007 (Dow Jones Newswire)
Colombian President Alvaro Uribe and his Venezuelan counterpart, Hugo Chavez, on Friday inaugurated a 224-kilometer natural gas pipeline that will link Colombia's Caribbean coast and the Venezuelan city of Maracaibo.
State-owned oil company Ecopetrol SA and its partner, Chevron Corp. (CVX), began pumping 50 million cubic feet of natural gas a day from the Ballena field in the northern tip of Colombia in La Guajira province to Maraicabo, through the new pipeline.
Ecopetrol and Chevron will raise exports to 150 million cubic feet a day in 2009 and 2010, and then reduce them to 100 million cubic feet in 2011.
Venezuela's state-owned oil company Petroleos de Venezuela SA, or PdVSA, will use the gas by injecting in its oil reservoirs to increase pressure and boost production. Venezuela also uses natural gas in its petrochemicals industry.
"This gas of Colombia, as far as we know will last for five years," Chavez said in a speech. "Then there won't be more gas there, though we hope they'll find more...but at that time we will be in condition to send gas to Colombia."
Venezuela needs to import natural gas despite its own huge reserves because it lacks infrastructure and sufficient investment in natural gas output.
After 2011, PdVSA intends to sell 150 million cubic feet of natural gas a day to Colombia for 16 years through the pipeline. The pipeline has a capacity of 500 million cubic feet a day.
The Venezuelan company built and will operate and maintain the pipeline. PdVSA spent $467 million to lay down the pipeline, Venezuelan oil Minister Rafael Ramirez said.
Colombia, Venezuela and Panama are planning to expand the pipeline toward Central America.
"Our technicians are working together with Venezuela and Panama to build a trans-Caribbean gas pipeline so that when we get the Venezuelan gas in Ballena in 2012 we could ship it to Panama and the rest of Central America," said Colombian Mines and Energy Minister Hernan Martinez.
Colombia is also planning to expand its gas network south to Ecuador to ship gas from Venezuela or from new reserves that may be discovered in Colombia, Uribe said.
Copyright (c) 2007 Dow Jones & Company, Inc.
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