Offshore production in Perla Field expected to reach 1,200 MMcf/d
Italy’s Eni (ticker: E) announced that it has started production on the first phase of its offshore operations in the Perla gas field, approximately 50 kilometers (about 31 miles) offshore in the Gulf of Venezuela. The field is the largest offshore field in Latin American and the first to be brought to production, according to Eni. In the project’s final phase, Eni expects production of 1,200 million standard cubic feet per day (MMcf/d)
Located in the Cardón IV Block, Perla holds 17 trillion cubic feet (Tcf) of gas, which corresponds to 3.1 billion barrels of oil equivalent (BOE), with additional potential, according to the company. The reservoir is located at approximately 3,000 meters below sea level, at a water depth of 60 meters. The best wells are estimated to produce over 150 MMcf/d.
The project is planned in three phases in a 50/50 joint venture with Repsol (ticker: REP) called “Cardón IV S.A.” The first phase will have a production plateau of about 450 MMcf/d, increase to 800 MMcf/d in phase two, and finally increase to 1,200 MMcf/d in the third and final phase. Phase 2 is expected to be finished in 2017, while the final phase is slated for completion in 2020.
Eni says the development plan includes four light offshore platforms linked by a 30 inch pipeline to a Central Processing Facility (CPF) located onshore at Punto Fijo and 21 producer wells. The company was able to complete the first phase of the project in just five years by using pre-pack modules in the construction of its onshore gas treatment trains, thus minimizing the time needed to build the project.
The CPF currently has two treatment trains with the capability of handling 150 MMcf/d and 300 MMcf/d each. The Eni JV signed a Gas Sales Agreement with the Venezuelan Ministry of Petroleum and Mining (PDVSA) for all three phases of the project, until 2036. The gas will be mainly used by PDVSA for the domestic market, according to Eni.
Meeting domestic demand
Recently, Venezuela has struggled to meet demand for its domestic gas markets. Last month, PDVSA announced that it would not renew a contract to import gas from neighboring Colombia after erratic flows from the pipeline, reports Reuters.
The contract between PDVSA and Colombia’s Ecopetrol (ticker: EC) was for 50 MMcf/d, but supply fell to 20 MMcf/d in May. Colombia has said in the past that it wanted to reduce exports to Venezuela to ensure it could meet its own fuel demand.
Venezuela has substantial gas reserves offshore in the Caribbean, but has been unable to development due to a lack of foreign interest. Many foreign companies view PDVSA’s pricing offers as unfavorable for gas extraction, likely inflated due to the country’s high subsidies. The International Monetary Fund estimates that Venezuela needs a $120/barrel price to break even on its oil production.