Transneft to help build 1,300 km of pipeline for Venezuelan oil project
MOSCOW. Sept 10 (Interfax) - Transneft , the Russian oil pipeline operator, signed a memorandum on long-term cooperation with Venezuela's PDVSA on cooperation in the construction of infrastructure related to the Junin-6 project in the Orinoco oil belt during this week's top-level Russian-Venezuelan talks.
Transneft spokesman Igor Demin told Interfax that the memorandum called for the construction of 1,300 kilometers of pipeline and the refurbishment of 170 km of pipeline by a joint venture involving the Russian company.
He said the infrastructure would be put in place to develop the Junin-6 block, which contains heavy oil that will require treatment.
A source close to National Oil Consortium, set up in October last year to develop oil and gas fields in Venezuela, said initial investment in the infrastructure was estimated at approximately $600 million and that the consortium would probably fund it.
Russia's state-owned Rosneft , which is part of the consortium, signed a memorandum on cooperation of its own with PDVSA, and the consortium signed a more specific memorandum on the formation of a joint venture to operate at the Junin-6 block.
National Oil Consortium includes Surgutneftegas , Lukoil , Gazprom Neft and TNK-BP besides Rosneft. The five members each have a 20%-stake.
PDVSA will have a controlling stake in the joint venture, which could produce 450,000 barrels of oil per day, Venezuelan Oil and Energy Minister Rafael Ramirez said on September 9. Investment in the development of Junin-6 is to total $30 billion over 25 years, Russian Deputy Prime Minister Igor Sechin said.
Sechin said the joint venture should be set up soon. "We are working very quickly and hope that the joint venture will be set up in the near future. There are procedures that we must get through," he said.
Sechin said the Venezuelan parliament must approve the creation of the joint venture. The finishing touches are currently being put on the documents and they will then be submitted to parliament, he said. "We expect the joint venture to start working before the end of the year," he said.