PDVSA Initiates Production At Dragon Field

(Energy Analytics Institute, Piero Stewart, 25.Aug.2013) – Development of the offshore fields Dragon, Patao, Mejillones and Rio Caribe located in the Northern Paria Pensula will allow for initial production of 200 MMcf/d of gas and 20 Mb/d of condensates which will be destined initially for the Venezuelan domestic market, PDVSA said.

Completion of the DR 5A well located in the Dragon field in Sucre state will result in 75 MMcf/d of production. When combined with production from the DR 11, DR 9 and DR 8 wells, the Dragon field will be able to produce 300 MMcf/d.

PDVSA also expects to develop the Patao field.

“We are focused on exploring the first two fields, Dragon and Patao, which will produce 600 MMcf/d,” Ramirez said. “The Mejillones and Rio Caribe fields will produce 650 MMcf/d.”

The Rio Caribe field will produce condensates as well, Ramirez said.

All of the production from Mariscal Sucre project will be shipped to Güiria.

“Gas from Mariscal Sucre and Cardon IV offshore will be destined to fulfill demand in the domestic market,” Ramirez said.

The Deltana Platform project was originally called Cristobal Colon, which was under ExxonMobil’s leadership, and contemplated a gas extraction export plant. The Venezuelan government has assumed leadership of the project and the initial production from Mariscal Sucre will be destined for the domestic market while initial production from Platforma Deltana will be destined for liquefaction, Ramirez said.

Venezuela’s gas importation agreement with Colombia expires in August 2014, the minister said.

“We have plans to start exporting 100 MMcf/d of gas to Colombia in September of 2014,” Ramirez said.

“Venezuela has gas pipelines that span the entire East-West direction of the country, we will be open to export gas to whomever we like,” Ramirez said. “Be it with gas from fields with partners such as Rosneft or Chevron in Deltana Platform.”

Ramirez said that shale gas had changed the gas export market.

“We envision completion of a 4.7 million ton per year liquefaction plant and we have already have agreements with countries in the Caribbean as well as with Brazil and Argentina,” Ramirez said.

Principal Objective

The primary objective is to build the necessary infrastructure that will allow for transport of 600 MMcf/d from the Patao and Dragon fields offshore to the Internal Market Gas Conditioning Plant (PAGMI by its Spanish acronym) located within the Gran Mariscal Sucre Industrial Complex (CIGMA by its Spanish acronym) in Güiria. The offshore gas will be used by thermoelectric plants, residential, commercial and industrial (especially petrochemical) sectors.

Dragon-CIGMA Pipeline

The Dragon-CIGMA 36-inch diameter gas pipeline will span 103 km (99.8 km subsea offshore and 3.2 km onshore.

The Mariscal Sucre Project

Phase I: 600 MMcf/d of production to come from Dragon-Patao fields.

Phase II: 650 MMcf/d of production to come from Rio Caribe-Mejillones fields. This will require a separate pipeline.

Summary: Dragon-Patao fields

Fields: 4 Geographic extension: 906 km2 Type of wells: Vertical Average production/well: 75 MMcf/d Platforms: 4 Gas pipelines: 247 km Initial production: 2014 Water depths: 300-500 feet

Summary: Venezuela’s Projects for Offshore Gas Production 2013-2019

Year —– Gas production (MMcf/d)

2013 —– 0

2014 —– 252 (Dragon)

2015 —– 600 (Dragon and Cardon IV Perla)

2016 —– 600 (Dragon and Cardon IV Perla)

2017 —– 1,191 (Dragon, Cardon IV Perla, Rio Caribe and Patao)

Note: Under Phase I, Dragon-Patao fields will produce 600 MMcf/d. Under Phase II, the Mejillones-Rio Caribe fields will produce 650 MMcf/d and 24 Mb/d of condensates from Rio Caribe. Also, Deltana Plataforma gas will also be sent to CIGMA, according to Ramirez.

“We are signing deals with gas consuming nations (Caribbean, Brazil and Argentina) for the supply of gas to these nations in the future,” Ramirez says. “All gas from Mariscal Sucre will be for the internal market,” Ramirez says. “Gas for export will come from Platforma Deltana.”

“We have invested $1.8 bln on activities offshore in Mariscal Sucre. The investment in Mariscal Sucre could surpass $4 bln,” Ramirez said. “We are in discussions with Rosneft for assistance to develop Mejillones and Rio Caribe.”

According to Ramirez, Venezuela pays between $3/MMcf and $4/MMcf for gas from Colombia and expects to charge same price to Colombia when it begins to export gas to its neighbor in 2014.

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