Natural Gas Pipelines- Domestic System
A lack of adequate domestic natural gas transport and distribution infrastructure has prevented Venezuela from fully exploiting its gas resources. In March 2004, PdVSA awarded three contracts to domestic companies for construction of the Central-Occidental Interconnection (ICO) pipeline. The 250-mile ICO will connect Venezuelas natural gas transport systems in the central and western parts of the country, supplying larger volumes of natural gas to western Venezuela for re-injection into oil fields. The first stage of the project will connect natural gas fields in Falcon state to the Paraguana refining complex, delivering 40-100 Mmcf/d. The second stage will connect the existing Ule-Amuay and Anaco-Barquisimeto pipelines. PdVSA announced that the ICO will begin operations in December 2005.
Natural Gas Pipelines- International Connections
In April 2003, Colombia and Venezuela agreed to build a $130 million natural gas pipeline between the two countries. The two signed a formal agreement in October 2004 to begin construction of the 130-mile project in early 2005. The pipeline will carry 150 Mmcf/d from Colombias gas fields in Punta Ballenas to Maracaibo in Venezuela, where PdVSA will use the natural gas for re-injection into its oil fields. However, the countries have stated that the flow of the pipeline might eventually reverse, once Venezuela has more fully developed its domestic natural gas reserves.
In December 2002, PdVSA, Royal Dutch Shell, and Mitsubishi signed a preliminary agreement to develop the Mariscal Sucre LNG project, located on the Paria peninsula in northeastern Venezuela. The upstream component of the $2.7 billion Mariscal Sucre consists of four offshore fields, Rio Caribe, Mejillones, Patao, and Dragon, with combined reserves of 10 Tcf and estimated production of around 1 billion cubic feet per day (Bcf/d). About 60 percent of this production would supply an LNG export terminal, with the rest going to the domestic market. However, in August 2005, PdVSA announced that it would develop Mariscal Sucre itself and, for the time being, not go forward with the LNG export terminal. PdVSA will initially develop the Rio Caribe and Mejillones fields for the domestic market. However, PdVSA maintains that there are sufficient natural gas reserves to support an LNG export terminal in later stages, incorporating the Patao and Dragon fields. Any such terminal, though, would likely not start operations before 2009.
Venezuela has recoverable coal reserves of approximately 528 million short tons (Mmst), most of which is bituminous. The country produced 7.85 Mmst of coal in 2003, while consuming only 0.06 Mmst. Most coal exports go to other countries in Latin America, but sizable amounts also go to the eastern United States and Europe. Venezuelas coal sector is dominated by Carbozulia, a subsidiary of PdVSA. The company operates in partnerships with foreign companies. The Guasare Basin, near the Colombian border, is the major coal producing region in Venezuela. Coal production has been limited during the last several years by infrastructure and transportation constraints, but there are plans for additional infrastructure investments to remove these obstacles. In 2005, Carbozulia formed a joint venture with Brazilian coal mining firm Companhia Vale do Rio Doce, dubbed Carosuramerica, to expand coal production in Venezuela to 10 Mmst by 2015. The plans include the construction of a railway linking coal mines to the coast (coal is currently carried via truck) and a new deepwater port.