Energy and infrastructure project developer Sycar has signed a Memorandum of Understanding (MoU) with Petróleos de Venezuela (PDVSA) for the development of a floating liquefied natural gas (FLNG) project
Sycar has applied with the US Office of Foreign Asset Control for a license to engage in the liquefaction and export of LNG from Venezuela, which is currently under US sanctions.
The FLNG is to be located in the Complejo Petroquímico José Antonio Anzoátegui (CJAA), located in Barcelona, Anzoátegui state, in Venezuela, where existing infrastructure will allow for fast-track development.
The MoU, if approved, will allow Sycar to secure a long-term gas supply agreement (GSA) for volumes of natural gas to be liquified and exported as LNG to the regasification projects that Sycar is currently developing in Latin America as well as Europe.
Sycar said that preliminary studies indicate favourable metocean and oceanographic conditions for the proposed FLNG vessel to operate.
Sycar will now work with Venezuelan authorities on the FLNG project and to obtain regulatory and environmental permits and a marine concession.
Economic mismanagement of the country’s resources have led to hyperinflation and state producer PDVSA has fallen under US sanctions aimed at weakening the authoritarian regime of President Nicolas Maduro. The sanctions have contributed to a further decline in hydrocarbon production.
Venezuela is an OPEC member, and estimates peg its oil and gas reserves as the biggest on the planet. OPEC production statistics for September 2022 put Venezuela’s oil production at a meagre 666,000 barrels/day, down from 723,000 the previous month.
But Russia’s war in Ukraine has moved nations to seek sources of hydrocarbons to replace widespread Western sanctions against Russian energy, with the Biden administration easing some Venezuelan sanctions earlier this year.
A recent Reuters report said the government of Trinidad and Tobago has requested the United States to authorise Venezuelan gas imports that would be used to restart a liquefaction train in the Caribbean nation. If US authorities grant a license, the gas will be imported mainly from Venezuela’s Dragón field on the country’s eastern coast which has up to 4.2 trillion cubic feet of gas reserves.
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