Pacific Rubiales building Colombia LNG pipeline, will supply Gazprom

BOGOTA, April 11 Fri Apr 11, 2014 4:50pm EDT

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BOGOTA, April 11 (Reuters) - Toronto-listed oil company Pacific Rubiales said it will spend as much as $200 million to build its pipeline in Colombia to export liquefied natural gas (LNG), with a contract to supply Russia's Gazprom for five years from 2015.

Pacific Rubiales is Colombia's biggest private oil producer with average output in the Andean nation last year of 129,386 barrels per day and plans to export LNG using the 84-km (52 mile) 18-inch diameter pipeline from some time next year.

The pipeline, with 100 million cubic feet per day capacity, will run from La Creciente field in the northern province of Sucre which produces around 60 million cubic feet of gas a day, to the Morrosquillo Gulf on Colombia's Caribbean coast, Pacific Rubiales said this week. It is expected to cost between $150 million and $200 million.

"Colombia has sufficient natural gas reserves for the medium term and enormous potential in the long term," Pacific Rubiales said in a statement.

Pacific Rubiales has a contract to supply about half a million tonnes of LNG annually, roughly 24.4 billion cubic feet, to Gazprom from the second quarter of 2015 for five years which would occupy about a quarter of the pipeline's capacity.

Colombia produced an average 1.17 billion cubic feet of gas per day in 2013, according to the National Hydrocarbons Agency.

State-run Ecopetrol is also looking into the viability of building a gas pipeline that would be capable of moving gas both directions to allow for both exports and imports at different times, a company official said.

Ecopetrol produces some gas jointly with Chevron Corp in the north from onshore and offshore fields.

Pipelines are frequently bombed by left-wing FARC and ELN guerrillas that shut them down for several days. There were 259 attacks in Colombia last year, a 72 percent increase from 2012, defense ministry data showed. Analysts say the increase is a means for FARC to boost its bargaining power in peace talks with the government to end its five-decade conflict. (Reporting by Peter Murphy; Editing by Grant McCool)

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