Colombia heavy oil pipeline starts operations

9/15/2009

Colombia heavy oil pipeline starts operations

Canadian heavy oil and gas producer Pacific Rubiales Energy announced Monday the start of operations of a pipeline tying Colobia’s Rubiales oil field to the national grid.

The Oleoductos de Los Llanos pipeline will transport heavy oil from Rubiales, in eastern Meta department, to the Monterrey station in Casanare department, where it will tie into the Ocensa pipeline, allowing transport of the crude to the Caribbean export terminal of Covenas.

The 235-km, 24-in. pipeline was built and will be operated by ODL, a special-purpose vehicle structured for the project, where Ecopetrol and Pacific Rubiales hold 65% and 35% interests, respectively.
   
Initial capacity of the underground pipeline is 60,000 bbl per day, which will increase to 160,000 bpd by the first quarter of 2010. Pacific Rubiales says that, with further investment, the pipeline may transport up to 260,000 bpd.

Total investment for the project was US$530 million, excluding financing costs. During the peak of activity, the project employed 4,685 workers, most of them from the areas neighboring the path of the pipeline.

The pipeline is a key component of the future development of hydrocarbons from the Llanos Orientales Basin.

“With the coming online of the ODL pipeline and the associated infrastructure field, we enter
into a new phase of the development of Rubiales, reducing significantly our
transport costs and eliminating the road transport restrictions,” said Pacific Rubiales CEO Ronald Pantin. “This pipeline will also play a key strategic role in the development of this
emerging oil basin.”

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