Colombian & Venezulean Presidents Agree on Pipeline

The respective presidents of Colombia and Venezuela, Alvaro Uribe and Hugo Chavez, agreed Wednesday to develop a natural gas pipeline connecting the two countries. Investment is to be US$120mn, Colombia's government news service reported. The line will initially take gas from Colombia's Ballenas offshore field 200km to Lake Maracaibo in Venezuela, but once Venezuela develops its gas reserves, the flow will reverse to meet Colombian demand at a time when the country's reserves are expected to have almost run out. The flow will switch in 7-10 years, according to estimates.

The line could also continue from Colombia to Central America, where it would be part of the Plan Puebla Panama regional integration program. Relevant authorities from Colombia and Venezuela will meet soon to define the necessary technical and commercial details for construction to start.

Project partners are presently Colombia's state oil company Ecopetrol, its Venezuelan counterpart PDVSA, and the US' ChevronTexaco, which operates the Ballenas field. Colombian gas transporter Promigas has proposed to enter the ownership of the project, Promigas CEO Antonio Celia told BNamericas. Promigas controls some two thirds of Colombia's gas transport infrastructure and wants to bring its expertise to the ownership and operations of the bi-national pipeline.

Among a host of other agreements between Uribe and Chavez were the construction of a multi-use pipeline from western Venezuela across Colombia to the Pacific coast, and increased cooperation between PDVSA and Ecopetrol in oil and gas exploration, seismic studies and infrastructure. A technical delegation from PDVSA research unit Intevep will visit Bogota May 20 to establish cooperation mechanisms regarding hydro-treatment, refinery development, and the production and transport of heavy crudes.

In the power sector, the presidents agreed on encouraging Venezuelan participation in Colombian hydroelectric projects, and applauded the agreement by which Venezuelan utility Cadafe will supply electricity to Puerto Carreno in Colombia's Vichada department. A service contract between Cadafe and Colombia's energy solutions planning and promotion institute (Ipse) for the interconnection is scheduled to be signed in May.

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