News

6 November 2013

Gazprom Marketing & Trading and Pacific Rubiales Energy Corp. announce the execution of a Heads of Agreement for a five year LNG sales contract

Pacific Rubiales Energy Corp. 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 liquefied 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 138,000 m3.

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 are very excited by this partnership with Pacific 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.”

Pacific Rubiales, a Canadian company and producer of natural gas and crude oil, owns 100% of Meta Petroleum Corp., which operates the Rubiales, Piriri and Quifa heavy oil fields in the Llanos Basin, and 100% of Pacific Stratus Energy Colombia Corp., which operates the La Creciente natural gas field in the northwestern area of Colombia. Pacific Rubiales has also acquired 100% of PetroMagdalena Energy Corp., which owns light oil assets in Colombia, and 100% of C&C Energia Ltd., which owns light oil assets in the Llanos Basin. In addition, the Company has a diversified portfolio of assets beyond Colombia, which includes producing and exploration assets in Peru, Guatemala, Brazil, Guyana and Papua New Guinea.

Pacific Rubiales’ common shares trade on the Toronto Stock Exchange and La Bolsa de Valores de Colombia and as Brazilian Depositary Receipts on Brazil’s Bolsa de Valores Mercadorias e Futuros under the ticker symbols PRE, PREC, and PREB, respectively.

Gazprom Marketing & Trading Limited (“GM&T”) is a UK-registered wholly-owned subsidiary of OAO Gazprom (“Gazprom”), the world’s largest gas company by asset base, accounting for 18% of the world’s total natural gas reserves and about 15% of the world’s total natural gas production. GM&T is headquartered in London and was established in 1999 to optimise Gazprom’s energy commodity assets and downstream expansion through its global marketing and trading network. GM&T and its subsidiaries and branches in the USA, Singapore, France, Germany, UK and Switzerland employ around 1,000 people and operate in numerous international markets in energy commodities including LNG, natural gas, power, oil and oil products, carbon, LPG and renewables.
 

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LNG

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