On July 27, OOO VNIIGAZ (a wholly owned subsidiary of OAO Gazprom) has inked with Petroleos de Venezuela S.A. (PdVSA) a Contract stipulating VNIIGAZ to devise a General Scheme for the gas industry development in the Bolivarian Republic of Venezuela.

The General Scheme will help build a mid- and long-term development strategy for the Venezuelan gas industry.

The parties intend, in particular, to assess the status and potential of the country’s mineral resource base development, gas demand forecasts as well as projections in the gas production, transmission, distribution, underground storage and processing sector.

The Contract signing is a crucial step for deeper co-operation between Gazprom and Petroleos de Venezuela S.A. within the Memorandum of understanding signed in January 2005.

Reference:

Being the second-largest in the Western Hemisphere after the USA, Venezuela’s proved natural gas reserves account for 4.1 tcm. Venezuela annually produces some 30 bcm/y of gas (mainly associated petroleum gas) that is in full consumed by domestic consumers. The country doesn’t import gas. The share of natural gas, oil and hydropower in Venezuela’s primary energy mix makes up 41, 38 and 21 per cent, respectively. The length of the country’s gas pipelines totals 5,000 km.

Although the monopoly right to produce natural gas is being held by the Venezuelan state-run oil and gas company Petroleos de Venezuela S.A. (PdVSA), a limited number of joint ventures created between PdVSA and foreign investors have been licensed to do it, as well.

In 1999, the Venezuelan Government enacted the Gas Law stipulating the inflow of foreign investment into the domestic gas industry.

In January 2005, OAO Gazprom and Petroleos de Venezuela S.A. signed a Memorandum of understanding that outlines joint businesses in the energy sector: exploration & development of gas fields, development of oil & gas transmission infrastructure, gasification, processing of natural gas, introduction of innovative technology and staff training. The parties also agreed to explore the potential for natural and liquefied gas shipments from Venezuela to third countries.