Pipeline construction delays Peroa, Cangoa startup

Petrobras has postponed start of production at the offshore Peroa-Cangoa natural gas field until the end of 2Q 2006, citing a lack of transport capacity for the fuel.

Offshore staff

(Brazil)- Petrobras has postponed start of production at the offshore Peroa-Cangoa natural gas field until the end of 2Q 2006, citing a lack of transport capacity for the fuel.

The development project includes a fixed unmanned platform on Peroa and a 50 km underwater pipeline from the platform to an onshore gas processing plant in the town of Cacimbas, Espirito Santo state.

The pipeline causing the production delay is the 128-km Vitoria-Cacimbas pipeline that Petrobras started building but was forced to stop construction of in 4Q 2005. The two Spanish companies contracted for the construction, Masa and Dragados, abandoned the project due to adverse financial conditions.

This is the second postponement for the project, which was originally supposed to start in October 2005. The entire supporting infrastructure is ready except for the pipeline.

A spokesman for Petrobras reported that, "the platform has been tested and all the rest of the infrastructure is ready. The information I have is that production could start before the end of the first quarter, but to be safe we are announcing startup by the end of the first half."

A tender to hire new contractors for the pipeline has started, but there were no details provided as to when the tender would be completed.

The company originally budgeted $278 million in the development of the field and supporting infrastructure, excluding the Vitoria-Cacimbas pipeline. This line is the shortest stretch of the 1,400 km Gasene gas pipeline project that would link the gas-rich southeastern coastal region of the country with the northeastern interior.

Peroa and Cangoa are two fields close to each other at water depths of approximately 67 m in the Espirito Santo basin. Gas was first discovered in Cangoa in 1998 and in Peroa in 1996. The two fields together have estimated reserves of 15 bcm of gas, which is 5% of Petrobras' total gas reserves of 296 bcm as of the end of 2005.

1/31/06

More in Company News