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Venezuela : Venezuela tries to dig out of power crisis.

Venezuela lacks sufficient operational thermal power generation capacity to offset the looming shutdown of more than a third of the country's total power supply, putting some strategic oil operations at risk.

Concerns are growing at the energy and mines ministry that the potential loss of the hydroelectric supply by early May could impact state-owned oil company PdV's operations that account for nearly all of Venezuelas revenue.

PdV's 940,000 b/d CRP refining complex on the Paraguana peninsula to date has not recovered from two blackouts in January 2016 and October 2015 that forced the facility to shut down completely for over a combined two weeks.

The CRP, which includes the 305,000 b/d Cardon refinery and nearby 635,000 b/d Amuay refinery, is currently operating at about 55pc of nameplate capacity, according to oil union officials on site.

State-owned utility Corpoelec boasts 17.6GW of installed thermal power generation infrastructure, around half of total power generation capacity.

Only 17GW of Corpoelec's power generation assets currently are operational, including 6.5GW of thermal capacity. A further 3GW of thermal capacity is "operational with limitations" because of natural gas and diesel supply shortfalls, the electricity ministry tells Argus.

But 8.1GW of Corpoelec's thermal assets are currently down because of equipment breakdowns the utility is "struggling" to repair with technical assistance from Cuban power experts and the Venezuelan army and navy, the ministry said.

Corpoelec also has not said when it expects to restart the crippled units.

The utility is earmarked to receive the lion's share of over 500mn ft3/d of gas that PdV has been buying from the Cardon 4 offshore gas joint venture run by European firms Repsol and Eni. Cardon 4 includes the 17 trillion ft3 Perla field that is currently producing around 500mn ft3/d.

PdV has prioritized Cardon 4 supply for the CRP and state-owned petrochemicals producers in Zulia state. Some of the gas is also reaching Corpoelec thermal power generation assets in Zulia, Falcon, Carabobo, Miranda and Vargas states, the electricity ministry said.

But projects to establish gas supply to newer Corpoelec plants has encountered delays because of sharply lower export income and shortages of key materials including steel pipe, pumps, compressors and other imported equipment, the electricity ministry said.

PdV subsidiary PdV Gas, which is responsible for building the infrastructure Corpoelec needs to receive Cardon 4 gas, declined to comment.

But the energy ministry said PdV's gas deliveries to Corpoelec have not increased as expected because the utility has been unable to overcome operational and infrastructure problems that hamper its ability to bring on more thermal capacity.

"PdV has the gas supplies but Corpoelec so far has been unable to increase thermal power generation at the plants that need the gas," an energy ministry official said.

Corpoelec in the past month has redoubled efforts to complete repairs at the chronically troubled 2GW Planta Centro thermal complex on the Carabobo state coast near PdV's 146,000 b/d El Palito refinery, and at the 1.43GW Termozulia complex near Maracaibo.

Electricity minister and Corpoelec chief executive Luis Motta Dominguez said yesterday that a new turnkey 600MW gas/diesel-fueled generation complex built alongside Planta Centro by China's state-owned CMEC will be commissioned by mid-2016.

But Corpoelec has "no chance at all" of restarting 6GW of thermal assets by end April to offset the increasingly likely shutdown of 6GW of hydropower capacity at the 10GW Simon Bolivar complex on the lower Caroni River in Bolivar state, the Corpoelec operator at the complex tells Argus by telephone.

The Guri reservoir that supplies the complex already has dropped below the critical level of 244m above sea level that triggers turbine safety protocols, the official said.

Two of 20 turbines at the complex were already shut down since early last month because of equipment breakdowns.

But Corpoelec will be forced to suspend six more turbines if Guri drops to 240 masl, a level that could be reached by 27 April, according to the electricity ministry's estimates based on the reservoir's depletion rate of one meter every seven days since January 2016.

Corpoelec deployed laborers with shovels and picks at the reservoir over the weekend to dig trenches near the water intakes for the turbines at greatest risk. Motta says dredging is also underway.

"Motta hopes that digging ditches will increase water velocity into the turbine water intakes, but it's all a show to distract the public's attention from the reality that Corpoelec has no operational capacity to compensate for the loss of 6GW of hydropower generation," the Corpoelec operator told Argus.

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Publication:Mena Report
Geographic Code:3VENE
Date:Apr 5, 2016
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