Canacol eyeing Colombian gas-to-power expansion

Canacol Energy has confirmed plans to participate in an auction for standby electricity supply in Colombia as it sharpens its focus on gas-to-power projects. 

The auction, which will offer standby electricity supply contracts that run from December 1, 2027 to November 30, 2028, is open to renewable or gas-fired power plants that are either under construction or already in operation. 

It is scheduled to be held in February, having twice been postponed by the mines and energy ministry.

"We continue to analyze several projects and ... we are looking with interest to participate in February," Canacol CEO Charle Gamba told investors in a quarterly earnings call on Friday.

In May, Canacol revealed it could seek contracts at the auction for two new thermoelectric power projects totaling up to 400MW.

The Calgary-based company entered Colombia's electricity generation segment last year via the 200MW El Tesorito plant in Sahagún, Córdoba department. The plant, a joint venture with Celsia and Proeléctrica, is fueled by gas produced at Canacol's nearby hydrocarbon assets. 

Participants in the auction have until February 15 to present bids, with the winners slated to be announced the following day.

Expressions of interest must be made by November 24 and a January 18 deadline has been set for the payment of guarantees.

Canacol said technical problems at its Jobo gas processing facility and some nearby production fields had been resolved. According to Gamba, the company will return to its full production capacity of 160-206Mf3/d by the end of November. 

He reiterated Canacol's plan to seek greater exposure to the spot market in the first half of next year as an El Niño drought cycle pushes up gas prices.

Gamba also reiterated Canacol's aim to begin activities in Bolivia in the fourth quarter next year. The company has already signed three E&P contracts with local state-run firm YPFB and is hoping to secure a stake in a fourth block in the coming months. 

"We are targeting production in Bolivia that is equal to that of Colombia within a three to five-year timeframe," Gamba added.