Colombia's GEB cautious about US$700mn Pacific LNG plans

Grupo Energía Bogotá (GEB) will consider participating in Colombia's US$700mn Pacific LNG import project, but only if steps are taken to mitigate risks for investors, CEO Juan Ricardo Ortega told BNamericas. 

Slated for the port of Buenaventura in Valle del Cauca department, the facility would regasify up to 400Mf3/d and store 170,000m3 of natural gas. The initiative also includes an associated pipeline that would connect the import terminal to Yumbo, near the southwestern city of Cali.  

"Anything is possible but, as in all lines of business, it depends on the conditions," Ortega said in a telephone interview ahead of his participation in the Madrid Energy Conference.  

"If the government pays upfront and assumes the risk of completion, we're definitely interested. It would provide the opportunity to purchase gas at reasonable prices. But if we have to assume the risk that the infrastructure might not be completed, the project is much less attractive. We're waiting for the government to clarify what's going to happen."

Any GEB bid would be submitted through its gas transport subsidiary TGI, which has previously expressed interest in the project. Barranquilla-based Promigas, which has a majority stake in Colombia's only existing LNG import terminal – the Sociedad Portuaria el Cayao (SPEC) facility on the Caribbean coast – has also said it could participate. 

Potential investors are awaiting definitive tender documents for the new terminal and pipeline following a public consultation in which 816 comments were submitted to energy ministry planning unit UPME.

Energy minister Diego Mesa said during his participation in the Inter-American Dialogue's Latin America Energy Conference on Tuesday that a competitive bidding process would be launched this month.

A contract to build and operate the infrastructure is expected to be announced in the first quarter next year and construction is scheduled for completion in early 2024, according to a draft timetable.

During the public consultation, companies expressed doubt over who will bear the cost of the project. There are also concerns about a history of community opposition to infrastructure works such as roads and transmission lines in the region. 

In addition, local producers have warned they could be left without a market for their gas. The government has rebutted those claims by pointing to studies showing the country faces a deficit of the fossil fuel by 2024.

The complete interview with Ortega can be seen here.