Pacific Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) (BOVESPA: PREB) acting through its wholly owned subsidiary Pacific Stratus Energy Colombia Corp. ("PSE"), announced Thursday the signing of a natural gas Liquefaction, Regasification, Storage and Loading Services Agreement with Belgium based Exmar NV ("Exmar").
The Agreement calls for Exmar to build, operate and maintain a Floating Liquefaction Regasification & Storage Unit ("FLRSU") to be located on the Colombian Caribbean coast. The Agreement grants PSE exclusive guaranteed rights to supply and liquefy up to 69.5 MMcf/d over a 15 year period, under a tolling structure. The FLRSU will have a storage capacity of 14,000 m3 (+/- 0.5 million tonnes per annum) of LNG and will be able to accommodate alongside a 140,000 m3 LNG Floating Storage Unit ("FSU"). Commercial Operations of the FLSRU are estimated to start in the fourth quarter of 2014.
Ronald Pantin, Chief Executive Officer of the Company commented: "We are very excited with this Agreement as it opens new markets and fast-tracks monetization of the Company's extensive natural gas reserves. This leverages the Company's strategy to explore and develop its large gas resources in northern Colombia, and also reinforces our view that Colombia has enough gas resources to become a reliable LNG supplier for the region."
As part of the project, PSE will build an 88 km, 18" diameter pipeline from its producing La Creciente Field to the Caribbean coast with an initial design transportation capacity of 100 MMcf/d. Gas for the project will be sourced from La Creciente Field.
With this project, the Company will be initially targeting markets of Central America and the Caribbean, aiming to replace fuel oil and diesel currently used for power generation. The project will also open potential industrial and residential market opportunities for natural gas in these countries, while putting in place new incentives to explore and develop the large undiscovered natural gas resources in Colombia.