France's Total SA (TOT) is heading up a $1.2 billion natural gas project in southern Argentina that will start producing some 6 billion cubic meters per day in 2015, ramping up to 10 million.
In partnership with Wintershall AG and Pan American Energy LLC, Total was announced as the lead in the project by Argentine officials earlier this week.
The partners will drill three wells off Argentina's southern coast of Tierra del Fuego, going as deep as 5.5 kilometers in the Vega Pleyade field. Total is the operator with a 37.5% stake, while Wintershall will also hold a 37.5%, with PAE holding 25%.
The initial investment will be around $1-$1.2 billion. Total SA will invest $850 million.
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Production is slated to begin in the third quarter of 2015 with around 6 billion cubic meters a day at first-about 5% of Argentina's gas output--and eventually up to 10 million cubic meters per day.
At full production, it would bring TOT's overall production in the area to 18 million cubic meters/day.
"At a time when energy demand is growing in Argentina, this latest development confirms Total's commitment to helping to secure long-term gas supply for the country," stated Ladislas Paszkiewicz, senior vice president, Americas at Total Exploration & Production. "Bringing the Vega Pleyade field on stream will also help Total to achieve its production growth target for 2017."
The project will require the construction of a 50-meter-deep drilling platform and 77-kilometer gas pipeline connecting to the shore. The platform is expected to take 20 months to build and will arrive in Argentina in the first quarter of 2015.
The venture will also increase the Carina field production, which currently is 8 million cubic meters a day. Output is set to rise by 1.5 million cubic meters a day in 2014's second quarter.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More