GMT and Pacific Rubiales Announce the Execution of a Heads of Agreement for a Five Year LNG Sales Contract

abarrelfullabarrelfull wrote on 06 Nov 2013 12:41
Tags: colombia gazprom lng pacific rubiales s-america

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Pacific Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) (BOVESPA: PREB) and Gazprom Marketing & Trading Limited ("GM&T") are pleased to announce the execution of a Heads of Agreement ("HOA") for the negotiation of a five year Sale and Purchase Agreement ("SPA") for approximately 0.5 million tons per year of liquified natural gas ("LNG") FOB Colombia (Caribbean Sea) beginning in the second quarter of 2015. The HOA includes the key commercial terms of the SPA, which the companies will negotiate on an exclusive basis within the next nine months. As agreed under the HOA, Pacific Rubiales will procure an LNG Floating Storage Unit ("FSU") of a minimum size of 138,00m3.

Pacific Rubiales will source the feed gas for this project from its La Creciente Field in northern Colombia and is in the process of building an 88 kilometer, 18" diameter pipeline to the offshore floating liquefaction barge, which is currently under construction by Shanghai-based Wison (Nantong) Heavy Industry Co., Ltd, a subsidiary of the Wison Group.

Ronald Pantin, Chief Executive Officer of Pacific Rubiales, commented:

"The execution of this agreement is very positive for us as it underpins the commercial start-up of the world's first operational floating LNG production unit at a pricing formula linked to international crude oil markets."

Vitaly Vasiliev, Chief Executive Officer of GM&T, commented:

"We ar very excited by this partnership with Pacifc Rubiales which complements Gazprom's expanding LNG portfolio. We are pleased to bring the commercial and shipping solutions to what will be the world's first floating LNG liquefaction plant in operation."

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