Baker Hughes signed two agreements in Caracas aimed at rebuilding Venezuela's natural gas infrastructure, the company announced Monday. The main one is a strategic alliance with PDVSA, Lindsayca and Fulcrum LNG, Inc. Baker Hughes also recently signed a separate memorandum of understanding with New Stratus Energy Inc. to support the development of future oil and gas prospects in the country.
What the alliance covers
The alliance combines three sets of capabilities. Baker Hughes brings its equipment and technology for oil and gas field development, gas infrastructure and LNG. Lindsayca, a Houston-based engineering and construction firm that has worked in Venezuela since 1986 through its Lindsay C.A. unit, brings four decades of in-country engineering and fabrication experience. Fulcrum LNG brings midstream and LNG project development, financing and market access, using the same open-access model it applies to gas infrastructure projects on the Gulf Coast. The companies said the goal is to process, transport, commercialize and export Venezuela's natural gas for the first time.
A framework, not a signed project
The alliance is a cooperation framework rather than a committed project. Any specific development under it still needs its own definitive agreement, internal approval from each company, and compliance with U.S. sanctions and export control rules, including authorization from the Treasury Department's Office of Foreign Assets Control.
The near-term and long-term plan
Fulcrum LNG chief executive Jesus Bronchalo called the PDVSA alliance "a historic opportunity to maximize the use and value of Venezuela's natural gas resources." In the near term, Bronchalo said Fulcrum will work with PDVSA to identify and build the infrastructure upgrades PDVSA needs to meet its own gas requirements, while looking for ways to supply gas to Venezuela's domestic market to support power generation. Over the medium and long term, the company plans to evaluate financing new open-access midstream and LNG infrastructure that would give PDVSA and other producers a way to sell their gas.
Baker Hughes chairman and chief executive Lorenzo Simonelli said the goal of the partnerships is an integrated gas value chain that turns Venezuela's gas resources into reliable domestic supply, with the potential over time to export the country's first LNG.
The New Stratus Energy deal
Under the separate memorandum of understanding, Baker Hughes will support New Stratus Energy's development of future oil and gas prospects in Venezuela. The company said it will apply its subsurface, drilling, production, processing, digital, emissions-abatement, power generation and LNG technology to the work, aiming to get more oil and gas out of the resources New Stratus develops and to speed up future projects.
Baker Hughes' history in Venezuela
Baker Hughes has worked in Venezuela's energy sector for more than 60 years. Its installed base in the country includes more than 1,200 oil production systems, what the company calls the largest artificial lift footprint in Venezuela, a sizable flexible pipe network, and about 240 turbomachinery units spread across 23 sites.
