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Pacific Starts-up Electrical Line to Rubiales & Quifa Fields

Source: www.gulfoilandgas.com 1/20/2014, Location: South America

Pacific Rubiales Energy Corp has commenced start-up of its Petroelectrica Los Llanos ("PEL") electrical power transmission line, which connects the Company operated Rubiales and Quifa oil fields to Colombia's electrical grid.

This new 230 kilovolts transmission line runs 260 kilometers from the Chivor Substation, in the Boyaca Department, to the Rubiales field and will supply up to 192 megawatts per hour to two booster pumping stations at the ODL Pipeline, as well as substations at the Rubiales and Quifa fields. The PEL line operations have started with power supply to Rubiales and Quifa field and are expected to be fully commissioned by mid-2014 once the substations at the ODL Pipeline are complete. The Company has invested approximately U.S.$230 million in the construction of PEL, which is 100% owned by the Company and is held by Pacific Midstream Holding Corp. ("Pacific Midstream"), a 100% wholly owned entity.

The completion of the line construction was officially dedicated in a ceremony attended by Colombian Government and Company officials on Friday December 6, 2013.

Ronald Pantin, the Company's Chief Executive Officer, commented:
"This is a very important project for the Company as it is expected to reduce production costs at the Rubiales and Quifa fields by significantly lowering the electrical energy costs for oil production, currently generated by burning more expensive imported diesel fuel and oil field production. Cost savings are estimated at approximately Cdn.$100 million per year, on full commissioning.

"The Company plans to use PEL to supply the energy required to run its new CPE-6 and other future heavy oil field developments in the southern Llanos basin. Additionally, the project has the important benefit of reducing greenhouse gas emissions by an estimated 180,000 tonnes per year.

"This project illustrates the advantages the Company captures through its extensive investment in infrastructure, and its focus on managing and reducing its operating costs.

"Pacific Midstream, which currently holds the Company's ODL and Bicentenario oil pipeline interests as well as the PEL electrical power transmission line assets, is in the process of partially spinning out a close to 40% interest to a third party. Indicative offers of approximately $400 million have been received and the Company now expects to complete the sale in the first half of 2014, generating cash while maintaining the cost reduction and energy security benefits of the infrastructure assets."

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