Why Is There a Cooking Gas Shortage in Venezuela? | Caracas Chronicles

Why has cooking gas become so scarce in Venezuela?

There are two types of cooking gas in the Venezuelan market, and they’re different in how they’re distributed: methane gas, which you find in pipelines, and propane gas, which is sold in canisters. 

There’s no shortage of methane gas, but when it comes to the latter, there’s an increasing shortage due to a number of factors: distribution practices, mishandling of the gas deposits, the decline of the industry’s infrastructure, and the loss of the original properties of gas, needed for the effective propane gas extraction.

 How, where, and how much propane gas is currently produced?

There’s usually water and gas in an oil deposit, and they’re extracted along with the crude oil; this gas is then treated in the extraction plant, where methane is separated from the natural gas fluids and then sent to the PDVSA Gas network. Those fluids are sent to the fractionation plant in the Jose Cryogenic Complex, in Anzoátegui, where propane is obtained. In fact, Jose is the only place in the country that’s dispatching right now, there are nine other plants that aren’t sending out any gas.

At the moment, propane gas is only being produced in the northern region of Monagas, in the vicinity of Santa Bárbara, Jusepín, and El Furrial. The national production of propane must be above 20,000 barrels per day. There’s been no production in western Venezuela since 2008.

How is it marketed, how does it reach the consumer?

Propane is sold in cylinders or canisters, and in bulk for large tanks that many buildings have.

How important is the use of this propane gas in Venezuela, in socioeconomic and geographical terms?

89% of the Venezuelan population uses propane gas for cooking, but there isn’t an infrastructure that carries gas pipelines to places like the Andes or the plains. This explains the need for adequate gas canister distribution: it’s what allows most Venezuelans to cook their meals.

The propane gas market has also been a victim to price regulations. The current price doesn’t even cover the production costs. In the region, a 10kg cylinder goes for around $15, while in Venezuela the price is regulated at $0.3. The shortage is creating a parallel market with a price that equals the international market price, similar to the pattern we’re seeing with gasoline.

Currently, the amount of propane available is enough to satisfy 65% of the country’s demand. So, four out of ten homes won’t have access to the canister they need. This will only get worse while propane production keeps decreasing and import isn’t reactivated.

Can’t gas be imported, like they did with fuel?

Yes, it can. That was done until mid-2019, but right now the government is focused on solving the fuel crisis and restarting the refineries. So far, there’s no evidence of plans regarding residential gas.

Is there a way to stop depending on this gas, or to stretch what little there is?

The only way to not depend on propane, or to at least lower the dependency, is to implement mass programs that shift people to methane, which is cheaper, efficient, and abundant. If more homes in the cities have access to methane, more propane will be available to supply places where it’s harder to install pipelines, like rural areas.

Another way is using the so-called virtual pipelines: distributing liquefied natural gas in specially designed tanker trucks. But this would mean building liquefaction facilities or importing liquefied natural gas.

How can we solve the problem?

As long as the country doesn’t make the necessary investments to build new methane gas distribution networks, we’ll have to import the propane gas needed to cover the deficit we have today and increase the prices so it becomes a viable business. We have to recover the extraction and fractionation plants of liquefied natural gas and look into new technologies, like virtual pipelines.

This post was originally posted on Caracas Chronicles – View Original Article

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About the Author

admin
Have lived and invested in Venezuela full time for the last eight years and visited for each of twelve years prior to that. Studied and closely followed developments in Venezuela since 1996.