Colombian gas producers issue Pacific LNG alert

Colombian natural gas stakeholders have reiterated concerns about plans for the country's second LNG regasification plant, citing uncertainty about demand and costs. 

The comments follow a report by the comptroller's office that highlighted a raft of alleged inconsistencies related to the project and raised the prospect of a 32% spike in consumer gas prices. 

"I think the [report] should prompt a review and reflection from everybody in the sector," said Andrés Pontón, the head of natural gas at state-run oil company Ecopetrol, in a webinar promoting the LGC online gas conference. 

"There are several variables that need to be kept in mind. Our position has been very clear. We encourage all conversations that aim to understand what the need for gas is, considering the start of [domestic] exploration projects. And we encourage the best alternative, whatever that may be, for [increasing] the supply of gas."

According to Pontón, Ecopetrol is focused on prioritizing local gas production from conventional onshore, offshore, and unconventional hydrocarbon basins. 

"As far as the Pacific LNG plant is concerned, we want to encourage debate underlining a fundamental point, which is the remuneration of the plant. These investments need to be remunerated in the most equitable way so that it's a financial model that is viable for the country."

Andrés Sarmiento, president of Colombian natural gas association Naturgas, said industry regulator Creg and energy ministry planning unit UPME had so far failed to clarify key doubts related to the initiative. 

"Who are the consumers that will benefit from this project ... and how much will it cost [per cubic meter of gas]," he said during the webinar. 

"The current estimates show great costs for the sector but not only are there great costs, we’re leaving aside the thermoelectric demand and it's not a component that can be [forgotten]. 

"Third, the project is not only a regasification plant because it will also have associated infrastructure. There should be an alignment to guarantee that when the plant is ready, the gas can be delivered to the national transport system."

Earmarked for Colombia's western port of Buenaventura, the Pacific LNG project is due to be completed in late 2026 at a cost of US$700mn.

Under current plans, the plant would vaporize up to 400Mf3/d (million cubic feet per day) while storing up to 170,000m3. A 120km pipeline would connect the facility to a terminal in Yumbo, on the northern outskirts of Cali. 

A bidding process was relaunched in June, giving potential developers until October 21 to submit technical and economic proposals for the project.