Venezuela, Panama, and Colombia Inaugurate Gas Pipeline Construction

Caracas, Venezuela, July 10, 2006—On Saturday, the presidents of Venezuela, Hugo Chavez, of Colombia, Alvaro Uribe, and of Panama, Omar Torrijos, inaugurated the construction of a gas pipeline, which will run from Colombia’s Guajira region to the Venezuelan city of Maracaibo in Zulia state. The pipeline will have a length of 225 kilometers and will at first supply Venezuela with Colombian gas and will later reverse direction for gas exports to Colombia’s pacific coast.

Once completed in May 2007, the pipeline is designed to transport 150 million cubic feet of gas per day (mcf/d) to Venezuela, to cover Venezuelan demand for natural gas. However, once Venezuela’s own gas production and transportation capacity increases so as to be self-sufficient, around 2011, 200 mcf/d will be transported to Colombia. Later, the pipeline will be extended towards Panama, when the total transport capacity increases to 1,000 mcf/d.

Venezuela’s President Chavez, called the pipeline “a central nerve, a locomotive for integration” and emphasized that Panama is being incorporated into the project. Chavez also reiterated his support, first expressed a few weeks ago in Panama, for Venezuela to construct a refinery in Panama.

Colombia’s President Uribe also praised the project, saying that this kind of agenda is “giving fruits for a deeper integration [of Latin America].”

After making the first soldering of the pipeline, the presidents signed a memorandum of understanding that committed them to continuing the connection to Panama. Panama’s President Omar Torrijos thanked his hosts for the invitation and said that this project is “a commitment with our peoples, in order to pay off the social debt.”

The pipeline’s total cost will be $335 million, of which 10% will be dedicated towards investments in the regions around the pipeline, in the areas of health, education, culture, and sports.

Also, the project will create an estimated 6,000 jobs in Venezuela and 4,000 in Colombia, according to Chavez.

Along with the gas pipeline, Venezuela and Colombia will lay a fiber optic cable, so as to improve communications between the two countries.