Colombia's Terpel 'attentive' to looming gas shortage

Colombian fuel distribution company Terpel is hopeful that the country's burgeoning liquified petroleum gas (LPG) market can soften the impact of a natural gas deficit on its balance sheet, CEO Oscar Bravo said on Wednesday. 

According to data published by natural gas market administrator BMC, Colombia faces a deficit of 76.5BBTU/d (billion British thermal units a day) in 2025 and 190BBTU/d in 2026.

Terpel said it was preparing for reduced supply of the fossil fuel for natural gas vehicles (NGVs).

"There will surely be an impact on the availability of gas," Bravo told investors in a quarterly earnings call. 

"We have contracts in place with specific prices that will cover us over the medium term. But when they expire we will need to renew them and we will remain attentive [to the market] to see what we need to do."

While shrinking natural gas supply could erode revenue from NGV fuel sales, the medium-term outlook for LPG is significantly brighter, according to Bravo. 

"LPG is much smaller, but we're seeing how we can accelerate [the segment]," he said. "It can be a substitute not only for natural gas, but also diesel and gasoline. We hope to recuperate some of that [the potential GNV segment losses] with increases in the LPG sector."

According to Colombian LPG association Gasnova, Colombia currently consumes around 700,000t/y of LPG per year. The entity has forecast annual demand growth of between 1.5% and 1.7%.