Venezuela's state oil company PDVSA and its Argentine counterpart Enarsa have signed an agreement to form a JV for the construction and operation of Venezuela's first LNG liquefaction facility, PDVSA said in a statement.
Related content
Companies / Entities
Keywords
Government/Regulations
LNG
Transportation
Upstream - Production
Research Reports
The liquefaction facility will be built at the Gran Mariscal de Ayacucho industrial facility in Güiria city in Sucre state and liquefy 4.7Mt/y.
A gas pipeline will be constructed to provide the facility with natural gas produced from block 2 of the Deltana platform offshore Venezuela, according to the statement.
US-based multinational Chevron (NYSE: CVX) has a 60% stake in Deltana's block 2, and PDVSA can buy an increased share in the block when commerciality is declared, BNamericas previously reported.
PDVSA will hold a 60% stake in the new LNG JV and Enarsa will have a 10% share. The remaining 30% will be held by "third parties," PDVSA said. The objective is to ship the gas to Argentina, which has faced increasing natural gas shortages.
An industry source, however, said that news about the potential third-party partner should be viewed with caution.
"Remember, PDVSA has a 100% stake in the Deltana-1 block, and we're still checking to verify the information about block 2," the source said.
PDVSA E&P vice president Luis Vierma, however, said in January 2007 that Chevron was interested in developing the country's first LNG train.
In addition to block 2, Chevron has a 100% interest in Deltana's block 3.
A conceptual offshore development plan was completed in 2007 on block 2, which includes the Loran natural gas field. Both block 3 and Loran could provide a supply source for Venezuela's first LNG train, Chevron said in a 10-K filing with US financial regular SEC in February 2008.
A Chevron spokesperson could not immediately comment on the PDVSA statement, and PDVSA and Enarsa declined to comment.
Enarsa and PDVSA have already launched a round for the construction of regasification facilities in Argentina's Bahía Blanca.
QUESTIONS REMAIN
While some analysts are skeptical about Argentina's plans to regasify LNG and Venezuela's plans to produce the fuel, other analysts have said that it would be possible on both ends.
"Obviously, PDVSA and Enarsa have made a lot of promises for projects that haven't materialized," Eurasia Group analyst Daniel Kerner told BNamericas last month.
"I don't think Venezuela has the expertise or capabilities actually to go ahead with the plan. It seems to me the Argentine government is also going to become less and less capable of engaging with this prospect as its fiscal situation becomes further compromised," Kerner said.
Venezuela also has a large domestic natural gas deficit and is currently importing gas from Colombia.
But "LNG is a real possibility for Venezuela," IDP's Venezuela analyst David Voght told BNamericas previously.
"The country's offshore reserves can more than support a first LNG train. PDVSA seems to have concluded that half of planned natural gas production from the reserves-rich North Paria offshore area will be earmarked for export along with production from the Plataforma Deltana offshore area," Voght said.
