Venezuela's Ypergas joint venture has started gas production on its Yucal Placer gas fields in northern Guárico state and signed a long-term gas sales agreement with state oil company PDVSA, Ypergas said in a statement.
The project is the first privately operated project to produce and commercialize gas on a large scale in Venezuela.
Ypergas started production at 1.7 million cubic meters a day (mcm/d) on Friday, and will increase that to 3mcm/d by the end of this year, Ypergas partner Repsol YPF said in a separate statement.
This first phase of the project requires US$130mn investment.
In this phase, the Ypergas partners will carry out 3D seismic over a 330 square km area, drill five wells, and install a gas processing plant and a 42km pipeline that will deliver the gas to PDVSA's Anaco-Caracas-Barquisimeto system.
The second phase will increase output to 8.5mcm/d by 2007.
The Yucal Sur and Norte fields have possible reserves of 3.78 trillion cubic feet, which will be distributed to the domestic and industrial internal market through the installation of pipelines and via bottling centers.
French company Total and its partners acquired a 35-year concession for the Yucal gas fields in June 2001. Total owns 69.5% of the concession; other partners are Spain's Repsol-YPF (15%), and Venezuela's Inepetrol (10.2%) and Otepi (5.3%).