Colombia Reports

Colombia's state-controlled oil company Ecopetrol SA and its partner U.S.-based Chevron Corp. reduced shipments of natural gas to Venezuela as demand in Colombia increased, an Ecopetrol spokeswoman said Friday.

In Late October, Ecopetrol and Chevron reduced exports to about 70 million cubic feet a day, down from about 220 million cubic feet a day previously, said the spokeswoman, who requested anonymity.

The demand for natural gas increased in Colombia as several gas-fired power-generation plants boosted electricity production as a drought reduced the amount of water available in hydro-power plants' reservoirs.

Colombian hydropower plants account for about two thirds of the installed capacity in the country.

Ecopetrol's spokeswoman said the reduction of gas exports is independent of the diplomatic clash between the governments of both countries.

Ecopetrol and Chevron export natural gas from the Ballena gas field on in northern Colombia to Maracaibo in Venezuela through a 224-kilometer pipeline.

The Venezuelan state-owned oil company Petroleos de Venezuela SA, or PdVSA, spent US$467 million to build the pipeline to ship Colombian gas to Maracaibo. Venezuela needs to import natural gas, despite its own huge reserves, because it lacks the infrastructure and sufficient investment in its natural gas output. PdVSA injects the gas in its oil reservoirs to increase pressure and boost production. Venezuela also uses natural gas in its petrochemicals industry.

On Oct. 1, PdVSA's Vice President Asdrubal Chavez said the company was prepared to face a possible reduced supply of natural gas. (Dow Jones)

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