Houston-based Harvest Natural Resources Inc. is to sell natural gas to Venezuela's state oil firm Petroleos de Venezuela SA. The project will be implemented by the fourth quarter of 2003, gas will be sold to PDVSA primary for industrial use by aluminum and concrete plants.
An initial capital investment to build a 54 mile pipeline to deliver the natural gas to a PDVSA pipeline, modify the Uracoa field processing plant, and provide other infrastructure is expected to be $25 million in 2003. Further $21 million will be invested in 2004.Gas sales are expected to start at a rate of 40-50 MMcfd in fourth quarter of 2003 and gradually increase to 70 MMcfd in 12-18 months.
Terms calls for the delivery of up to 198 bcf of natural gas through July 2012 for $1.03 Mcf.
This contract prompted HNR's independent petroleum engineer to add 198 bcf of gas reserves to Benton-Vinccler's proved reserves. For HNR, this is a net addition of 158 bcf.