Venezuela natural gas pipeline explodes after PIGAP II rupture

An explosion at a 20-inch pipeline that provides natural gas to the PIGAP II gas reinjection plant in northern Monagas state in Venezuela was the result of a "terrorist attack," the country's oil minister said, with one analyst saying natural gas and crude oil production has been reduced as a result.

"PIGAP II currently has 20% of its original capacity because the gas injection projects for the artificial lift of crude were discontinued and, as a result, northern Monagas is producing crude well below its potential which reached 1 million b/d," Einstein Millan, a Venezuelan natural gas specialist, said.

The PIGAP II gas reinjection plant helps produce crude oil at El Furrial fields operated by state-owned PDVSA. The pipeline also serves Spain's Repsol in Quiriquire.

"In addition to the gas coming from El Furrial, this plant was also collecting gas from Repsol's projects in Quiriquire," Millan said. "Although I do not know exactly the magnitude of the accident, I can say that it will temporarily affect natural gas production." Repsol was not immediately available for comment outside business hours.

Venezuela has the world's largest reserves of crude oil but production has been decimated by economic collapse. The OPEC's member's production was only 550,000 b/d in February, according to the latest S&P Global Platts survey.

The explosion and subsequent fire at the pipeline on March 20 was due to the rupture of a gas line at PIGAP II, according to statements by local authorities in Monagas.

Natural gas production at El Furrial was 412 MMcf/d and at Quiriquire 150 MMcf/d, according to PDVSA reports in February.

Venezuela's oil minister, Tareck El Aissami, told state television that the explosion was the result of "a terrorist attack" against a PDVSA gas pipeline. There were no reports of injuries, he said.

PIGAP II is located in the El Tejero of Monagas state and began operating in 2001 with an installed capacity to handle 1,300-1,800 MMcf/d to recover 300,000 b/d of light crude from El Furrial.

El Furrial's average production was 44,000 b/d in February, according to PDVSA reports reviewed by Platts.