Pacific Rubilaes delays Colombia FLNG export project

Canadian oil company Pacific Rubiales has decided to postpone its 0.5mtpa floating LNG export project planned for Colombia due to “unfavourable market conditions,” project partner Exmar LNG announced on 29 January.

Pacific Rubiales remains committed to the project and is currently evaluating different options, including the potential relocation of the project to an alternative site, the Belgian-based shipbuilder said in its fourth quarter 2014 financial results.

Pacific Rubiales still intends to take delivery of the purpose-built FLNG vessel sometime in the second half of this year, added Exmar, which will oversee operation and maintenance of the project. The initial start-up date was estimated in the first half of 2015.

A spokesperson for Pacific Rubiales confirmed the delay in the project, but did not provide further details when contacted by ICIS.

The FLNG barge has been under construction at Shanghai-based Wison Offshore & Marine’s fabrication facility in Nantong, China.

Toronto-headquartered Pacific Rubiales announced the scheme in 2011, with the original intention of monetising stranded gas located close to Colombia’s Caribbean coastline by small-scale LNG deliveries to power generators across the Caribbean and Central America.

Lack of demand from the region instead forced the company to change its marketing focus. In December 2014, Pacific Rubiales announced a four-year sales and purchase agreement (SPA) with Gazprom Marketing & Trading for offtake on a free on board basis from the FLNG project.

The SPA formalised an original agreement made in 2013. At the time, commercial terms for the contract were understood to have been based on a slope of between 13-14% to the international Brent crude oil benchmark. However, this could not be confirmed. James Fowler