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Oil & Gas Journal

Eric Watkins
Senior Correspondent

LOS ANGELES, May 16 -- Portugal's Galp Energia and Venezuela's state-owned Petroleos de Venezuela SA (PDVSA) have signed five cooperation agreements concerning energy projects for oil, renewable energy, and natural gas, including two LNG liquefaction plants.

The agreements follow a memorandum of understanding the two companies signed last October and cover the creation of the LNG projects, joint work in the Orinoco belt, the purchase of oil, and development of wind farms.

The two companies will jointly develop two LNG projects in Plataforma Deltana and Mariscal Sucre fields. Each project will involve construction of a pipeline to carry gas from the fields to the liquefaction trains.

The liquefaction facilities will be installed at Gran Mariscal de Ayacucho industrial complex, at Guiria, in Sucre state. Each train will have the capacity to process a total of 6.5 billion cu m/year of gas to be sold on the international market as LNG.
For the two LNG projects, Galp and PDVSA will create two companies, owned 15% and 85% respectively. Under the agreement, Galp will receive 2 billion cu m/year of LNG from the companies, with first LNG expected before 2014.

Galp and PDVSA also signed an agreement for joint studies for the development, production, upgrade, and commercialization on the international market of crude oil produced on the Boyaca 6 Block in the Orinoco belt.

After completing the ongoing Boyaca 6 reserves certification process and concluding the joint studies in 2009, PDVSA and Galp will found a company to implement the project.

PDVSA agreed to sell 2-4 million bbl/year of oil to Galp at market prices, an agreement that can be renewed annually.

Galp and PDVSA also signed an MOU for development of four wind farms, having a total capacity of 72 Mw, in Guajira, Chacopata, and Nueva Esparta states.

Galp will provide training and technical assistance to the future operators of the wind farms and will secure the transfer of the technology associated with the project.

Contact Eric Watkins at hippalus@yahoo.com.