Gas Sector Dynamism Consolidated In Colombia

Instant Max AI

(Promigas, 14.Sep.2020) — The 2020 Natural Gas Sector Report presented by Promigas provides a concrete overview of Colombia in terms of reserves, investments, energy security, networks and transportation, as well as the effects of the Covid-19 pandemic.

Some highlight include:

— Colombia has 54 trillion cubic feet of natural gas reserves.

— Ten million users connected at June 2020.

— SPEC has regasified 572,901 cubic feet of LNG as backup for the energy system, thereby preventing rationing and guaranteeing electricity supplies.

— 373 kilometers have been added to the gas pipeline transportation network, making a total of 7,639 kilometers and incorporating new gas reserves in Sucre and Córdoba, with a view to guaranteeing energy supplies for industry on the Caribbean coast and in Antioquia.

According to the document, the transportation and distribution sectors have felt the biggest impact of the Covid-19 pandemic, with contract volume, prices, portfolio, collections, provisions and subsidies all affected. In order to face up to the situation and stimulate sector dynamics, natural gas production and transportation companies have granted consumers relief by temporarily renegotiating contracts with marketers.

Referring to potential natural gas reserves in Colombia, the report states that the country has 54 trillion cubic feet (TCF) of potential natural gas reserves, 30 TCF offshore that will mature between 2024 and 2028 and the remaining 24 TCF in Non-Conventional Deposits (NCD) in the mid-Magdalena region, Cesar-Ranchería, and Catatumbo.

Projected investments in the National Hydrocarbons Agency (ANH) invitation to participate in four NCD pilot programs are equivalent to $100mn each. If this energy potential were to materialize, it would be equivalent to sixteen times the current proven reserves of 3.2 TCF, thereby guaranteeing self-sufficiency in natural gas for around 130 years.

The report refers to one area where Colombia has become a benchmark in the natural gas industry in Latin America, namely the coverage figure for residential users. The country has the highest number in the region, with coverage growing from 12% to 71% in a mere 25 years and with 86% of those users being in the lower income brackets. Promigas President, Eric Flesch, says that “this is equivalent to a great social revolution that can be exported, and it makes us feel very proud”.

There has been a 5% increase in the number of natural gas users in Colombia since 2015 and, according to the Ministry of Mines and Energy, the landmark figure of ten million natural gas users was reached on 23 June 2020. According to figures for 2019 in the Sector Report, 751 municipalities have a natural gas service and the only provinces not yet covered are Vichada, Guainía, Vaupés, Amazonas, and San Andrés and Providencia.

A further important use of natural gas, and one that helps to conserve the environment, is Vehicular Natural Gas (VNG), which is used in the mass transportation systems in Medellín (Metroplus), Cartagena (Transcaribe), Palmira (Tupal), Barranquilla (Coolitoral and Sodetrans), Cali (MIO), Manizales (Serviturismo) and Bogotá (Transmilenio). And every day more and more heavy cargo vehicles have turned to this fuel, which reduces CO2 emissions by 30% and particulate material emissions by 95%.

As far as energy security is concerned, the country boasts the only Liquefied Natural Gas (LNG) regasification terminal, Sociedad Portuaria El Cayao (SPEC), which had regasified 572,901 cubic meters of LNG by early September 2020. SPEC has been key to ensuring that thermal generators can successfully cope when hydrology levels are low, such as during the first half of this year when reservoir levels fell to 32%, the lowest for 25 years.

Because of the backup provided by the SPEC regasification terminal, Colombia is no longer faced with the possibility of rationing and the costs that this would imply for various sectors. This ratifies the leading role that Promigas plays in consolidating the natural gas sector, as does the system reliability resulting from the construction in the last five years of 304 of the 373 km of gas pipelines that are part of the country’s total 7,639-km network.

Notable achievements include the Horizontal Crossing of El Dique Canal, the longest in Latin America and eighth longest in the world; this major work in the hydrocarbons industry is 3.4 km long and at a depth of 112 meters, and Colombian engineering was employed throughout. This investment by Promigas provides the country with the necessary infrastructure to exploit the potential that exists in its natural gas deposits, since it enables new gas reserves in Sucre and Córdoba to be incorporated into the network.

Promigas is a long-term player with a strategic vision for developing Colombia’s energy sector, an example of this being the recent announcement of the new Jobo-Transmetano gas pipeline project under the “Open Season” regulatory arrangement, which will allow agreements to be made between agents.

This scheme would enable a robust infrastructure to be developed for connecting new sources of natural gas to markets in the interior by providing further natural gas transportation system reliability and diversifying long-term supply sources.

“The Jobo-Transmetano Gas Pipeline is necessary infrastructure that will provide the country with a reliable, efficient, stable, opportune and long-term solution and reinforce transportation infrastructure to the interior, where 62 per cent of domestic demand is, by means of an open-access gas pipeline. We have faith in Colombia and remain committed to investing so that natural gas can reach more users, industries and regions”, said Promigas President, Eric Flesch.

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