The case for a new LNG import terminal on Colombia's Pacific coast

Colombian state-run energy company Ecopetrol has received 10 bids for new LNG import capacity, six of which are proposed for the Caribbean region and four for the Pacific coast. 

One of the areas that stands to benefit is Colombia's southwest, which currently relies on piped gas from Cartagena and La Guajira – more than 1,000km away – to meet local demand.

Edison Ruíz, a legal adviser to Buenaventura's city hall, tells BNamericas why a regasifciation terminal on the Pacific coast is crucial to the subregion's economic development.

BNamericas: What has happened with the Pacific regasification plant and what is the status of the Andes Energy Terminal proposal to build a terminal to import LNG at Buenaventura port? Do you see the Ecopetol bidding process finally being able to leverage an LNG project?

Ruíz: The regasification plant is a very important project. There is a need for all Colombians to have a regasification plant on the Pacific coast, specifically in Buenaventura because Colombia could run out of gas. Currently, gas in the southwest of the country comes from Cartagena and La Guajira, which is why it has to travel more than 1,000km through pipelines to get there.

It is the national government's obligation to bring cheaper, more reliable and timely gas to this region. It's also a right to be able to compete nationally and internationally, and that is what this project will allow.

It will create jobs in Buenaventura, which suffers from a lack of opportunities. But beyond that, it would be a guarantee of supply for homes, industries and commerce. It can also feed two large thermal power plants to serve the city of Buenaventura.

The district management [of Buenaventura] is fully committed. We support this proposal 100% and if licenses and other permits need to be processed, we're in a position to do so.

BNamericas: What does city hall require for the project to be developed?

Ruíz: We send a message to Ecopetrol and the national government that the company selected must comply with certain requirements. One is that it does not obstruct marine and terrestrial traffic in the port and its surroundings. Any project in that bay can't affect port activity. Another is that there is the capacity for ships to maneuver within the port.

It's also important to note that this project can't be less than 3,000m from population centers, which would be in line with international standards.

BNamericas: Why is a regasification plant so important for this sector of the country? And why has it not been possible to build a plant on the Pacific coast, despite the efforts of energy ministry planning unit UPME?

Ruíz: There has been opposition from the north of the country that wants this new project to be on the Caribbean coast. There is a lack of vision. What generates reliability for companies, investors and the economy is having secure sources of energy and gas because otherwise, we are dependent on the Caribbean coast with its associated costs.

The projects promoted by UPME have always proposed that the government finance them. This time, it will be the private sector with the support of the national and local governments. Now we have to act because we're going to run out of gas and today the government is recognizing this.

BNamericas: Considering widespread community opposition to energy and infrastructure projects, does the local population support this project?

Ruíz: The project does have that support. The community sees that there's a need and there's no other option.

A regasification plant in Buenaventura will generate 10,000 direct jobs, plus indirect ones. People are aware of this and wouldn't oppose the licensing. We understand that the ministry is fully prepared to process the license, obviously complying with the regulations.

We can't delay this process any longer. Buenaventura and the southwest need to increase the availability of gas to be competitive at national and international level.

BNamericas: What characteristics must the company that builds and operates this plant have?

Ruíz: It must have financial muscle, a company with experience and capacity. In Colombia, there is [no such company]. You have to go to companies that have partners.

Of course, the company has to comply with the requirements mentioned and the law. Ecopetrol can choose any company, but it can't delay any further. This project must be expedited and given all the necessary support so that Buenaventura and the entire southwestern part of Colombia can compete.