Venezuela and Colombia Agree on Gas Pipeline

Venezuela and Colombia held an important bilateral summit last week in which they finalized agreements for a long-awaited gas pipeline, which will run between the two countries and could eventually provide access to markets in Asia.

Caracas,Venezuela, June 20, 2006—Venezuela and Colombiaheld an important bi-lateral summit last Thursday in Caracas,in which they finalized agreements for a long-awaited gas pipeline, which willrun between the two countries and could eventually provide access to markets inAsia.

Construction on the pipeline isset to begin on July 8th for the 230kilometer underwater gas pipeline, which will connect Colombian Punta Ballenasin the region of La Guajira, with the city of Maracaibo in the western Venezuelan state ofZulia.

Accordingto Rafael Ramirez, Venezuelan Minister of Energy and Petroleum,Colombia will initially beexporting gas to Venezuelathrough the pipeline in order cover the great Venezuelan demand, but that Venezuela willbe self-sustaining by 2008 and exporting natural gas by 2013.

“Inthe first instance the gas pipeline will allow us to import for Zulia, 150million cubic feet of gas daily and afterwards we can export to Colombia and Central America the same amount.”

The Colombia Universal, reported on Fridaythat Chevron Texaco had announced last week that they had finished drillingthree additional wells in La Guajira, which will ensure the existence of enoughColombian gas to fulfill Venezuela’s needs.

Meanwhile,the Bolivarian News Agency reportedthat the discovery of new Venezuelan natural gas reserves will incrementallymultiply the 26 billion cubic meters of natural gas that Venezuela is reportedto currently have on the market, and Venezuelan and Colombian authorities hopethat the pipeline will eventually be extended to the Colombian coast in orderto sell Venezuelan gas to China and other Asian countries.

Thepipeline was originally agreed upon in July 2004, but due to reccurring tensionsit was not finalized until last week. According to Iván Orellana, director of International Relations of theVenezuelan Ministry of Energy and Petroleum, the construction of the pipelinewill take exactly one year, and will cost $280 million, which will becompletely financed by the Venezuelan state oil company, PDVSA.

Venezuela is currently also pushing for the controversial GreatSouthern Gas Pipeline, which would run from Venezuelato Argentina,and would be the largest pipeline in the world. President Chavez sees the Southern Pipeline as central to his plans forthe alternative integration of South America.

TheGuajira gas pipeline was just one of a number of topics which were discussedand agreed to last Thursday between Venezuela’sChancellor Alí Rodríguez Araque and Colombia’s Carolina Barco at theSecond High Level Bi-national Commission meeting (COBAN).

Rodríguezcalled the meeting a “total Success” and stated, “We tackled a very fullagenda, that included trade exchange, energy aspects, physical integration, thefunctioning of bilateral mechanisms, aspects related with the environment andin conjunction with other aspects.”

Venezuela and Colombiaalso evaluated the route of an oil pipeline, which Venezuelais planning to build in conjunction with Ecopetrol and would run betweenCabrutas to Tumaco, Colombia,on the Pacificacoast. Venezuela’s oilminister Rafael Ramírez declared that this Project, “is very important for Venezuelabecause it is our outlet towards the Pacific and the expanding Asian markets.”

Bothcountries also ratified their commitment to fight against narcotrafficking,contraband, and crime along their 2,219 kilometer shared boarder.

“Weratify that we have a common problem, which we will only overcome throughcollaboration. The problem of theboarder is complex and that’s why we are working intensely in every aspect ofthat complexity,” declared Rodriguez.

Venezuela and Colombiaagreed to expand a gasoline supply project in the Venezuelan boarder states ofTáchira, Apure, and Amazonas, in order toattempt to combat the contraband of fuel in Colombian territory.

Because of Venezuela’s recent exit from theCommunity of Andean Nations (CAN), the Colombian minister of Foreign Relationsannounced that a commission of Venezuelans will be visiting Colombia in theupcoming days in order to agree on new bilateral trade rules between the twocountries during Venezuela’s five-year long official exit from CAN.