Colombia's TGI secures partner for Pacific LNG project

Colombia's Transportadora de Gas Internacional (TGI) has reached an agreement with an international partner to submit a joint bid for the country's second LNG regasification project, company executives said on Wednesday.

The subsidiary of Grupo Energía de Bogotá (GEB) revealed it is working to meet requirements set by national licensing authority ANLA as it awaits the launch of a competitive tender process.

"We believe that [the project] is very important to meet gas demand and we're waiting for definitive bidding terms to allow us to firmly structure the project," TGI's chief financial officer Julio Alarcón said during a quarterly earnings call.

It is understood the company that has agreed to the joint venture with TGI is Spain's Enagás.

Alarcón said he expects strong competition from rival bidders.

Earmarked for the Pacific port of Buenaventura (pictured) and budgeted at US$400mn, the regasification terminal is slated to process up to 400Mf3/d (11M3/d) and store up to 170,000m3 of natural gas. Colombia's first LNG import facility, at the Caribbean port of Cartagena, went into service in 2016.

The project also envisages a 75km pipeline – expected to cost US$260mn – that would connect the terminal to Yumbo on the northern outskirts of Cali, Colombia's third largest city.

Documents published in March by energy ministry planning unit UPME tentatively call for the launch of a tender process in the second half of the year.

The Colombian government has said the project will help meet growing fuel demand for thermoelectric power generation and reduce the country's reliance on hydropower.

According to UPME, Colombia faces a natural gas supply deficit by February 2022 in "an average demand scenario" amid a dearth of new discoveries.

Mines and energy minister María Fernanda Suárez this week said that the lifespan of local natural gas reserves fell to 9.8 years from 11.7 at the end of 2018.

If new sources are not found, Colombia will need to import gas as soon as 2021 at more than twice the cost of domestic supply, Suárez warned.

TGI, CÁLIDDA GROWTH

TGI reported a Q1 net profit of US$31.9mn, up 40.7% on the same period last year. The company transported an average of 466.1Mf3 in the three months, up 9.5% year-on-year, and had contracted capacity of 712Mf3/d, up 1.1%.

Meanwhile GEB's Peruvian unit Cálidda posted earnings of US$20mn compared to US$12mn in 1Q18.

Cálidda's client base rose 31% year-on-year to 802,660 while sale volumes climbed 2% to 772Mf3/d, according to a presentation.

The Lima-based company also added 343km of underground pipes in the quarter, taking its overall piped distribution network to 10,035km.