Venezuela and Colombia Inaugurate New Bi-National Pipeline

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Researched by Industrial Info Resources (Sugar Land, Texas). On October 12, 2007, Alvaro Uribe, Colombia’s President, and Hugo Chavez, his Venezuelan counterpart, inaugurated the construction of a bi-national natural gas pipeline that demanded a $467 million investment and links both countries. In the future, the 500 million cubic feet per day pipeline is planned to reach Ecuador, Bolivia and Peru. This first leg of the pipeline is 224-kilometers long and connects Colombia's Caribbean coast and the Venezuelan city of Maracaibo, Zulia State, Venezuela. Ecopetrol SA, Santa Fe de Bogota, Colombia, and PDVSA, Caracas Venezuela, began pumping 50 million cubic feet of natural gas a day from the Ballena field in the northern Colombian province of La Guajira, through the new pipeline that will also be operated by Chevron Corporation (NYSE:CVX ). In December, 2003, an agreement was signed between ChevronTexaco's Colombia subsidiary, ChevronTexaco Petroleum Company, and Ecopetrol, to extend an already existing contract and continue natural gas production activities in the northeastern coastal region of the country. After the extension agreement, ChevronTexaco continued to have its participation beyond 2004. Experts from Venezuela and Panama are already working to build the trans-Caribbean pipeline sector so that in 2012 Venezuelan gas in Ballena can be shipped to Panama and the rest of Central America.

PDVSA will inject the gas in its oil reservoirs in order to increase pressure and boost production, especially in the petrochemical industry. It is necessary for Venezuela to import natural gas because it lacks infrastructure and investment in natural gas output.

Ecopetrol and Chevron’s exports will be elevated to 150 million cubic feet a day in 2009 and 2010, and then reduced to 100 million cubic feet in 2011. PDVSA plans on selling 150 million cubic feet of natural gas a day to Colombia for 16 years after 2011. The proven gas reserves in the area are estimated to last five years; however, more are expected to be found within the next few years.

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