Brazil's Petrobras Plans Pipeline to Open Isolated Amazon Gas Field

LONDON (Dow Jones Newswires), Oct. 19, 2011

A natural gas field discovered more than 30 years ago deep in Brazil's Amazon rain forest could finally be linked to the outside world, according to plans detailed by federal oil company Petrobras.

Petrobras, as the energy giant is also known, has won regulatory approval for a 140 kilometer pipeline from the Jurua natural gas
discovery in Amazonas state to the Urucu oil-and-gas field, said Urucu general manager Luiz Ferradans during a site visit Monday.

Senior management still needs to give its final approval for the project, but site planning is already under way and the pipeline is
expected to be up and running by 2013, Ferradans said.

Jurua and newer prospects in the remote rainforest region such as Chibata have become commercially viable since Petrobras completed a pipeline linking the 25-year-old Urucu field to Manaus, the capital of Amazonas state, in 2009. That pipeline had been delayed for years over cost and environmental concerns, and Petrobras examined a number of alternatives over the years, including transporting the gas by barge, before finally winning approval for a pipeline.

Now that Urucu is in place, Petrobras will use it as a hub to connect production at new fields that could significantly boost the 3 million
cubic meters of natural gas which are transported every day from Urucu to Manaus. The pipeline can carry 5.5 million cubic meters a day, while new compression stations are being added to increase that to 7.5 million cubic meters a day, Ferradans said.

Tests on four renovated wells left from when Jurua was first discovered in 1978 on average produced between 600,000 and 800,000
cubic meters a day, Ferradans said.

Jurua is part of $3.4 billion which Petrobras will spend in an effort to tap reserves in this part of the Amazon, which were pegged at more than 800 million barrels of oil equivalent at the end of last year. The firm is carrying out early seismic surveys at some blocks in the Amazonas and Solimoes basins, and is drilling a second well at the Chibata oil discovery, about 34 kilometers from Urucu, Ferradans said.

Tests at the first Chibata well produced about 2,500 barrels of crude oil per day, about double the average production rate at Urucu's 60
production wells. In September, Urucu produced about 54,000 barrels of low-sulfur crude and more than 11 million cubic meters of natural gas per day, Urucu operations manager Joao Roberto said.

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