The prospect of expanded LNG import capacity in Colombia could affect the viability of new domestic gas projects, a sector consultant told BNamericas.
One initiative that could be impacted is the offshore Sirius area, a joint venture between state-run oil company Ecopetrol and Brazil’s Petrobras, according to Felipe Villegas, director of Bogotá-based consultancy Navitas Consultores.
“The final investment decision for Sirius is expected in 2027, and right now they’re testing the market and looking for buyers,” Villegas said in a telephone interview. “They’ve closed the period for receiving supply contract offers but haven’t yet announced if any were signed.”
“The biggest challenge is finding enough demand at the prices they’re offering, which are close to LNG import parity – about US$10 per million British thermal units (MBTU). After adding transport and other costs, it’s a high price, so they’re trying to determine whether the market will accept it.”
BNamericas is aware of plans for at least six new LNG import terminals in Colombia: two on the Pacific coast and four on the northern Caribbean coast.
The initiatives coincide with fears of an imminent gas deficit in the Andean country amid dwindling proven reserves and rising demand.
A Bancolombia report published this month said Colombia’s dependence on imported natural gas is set to surpass half of total supply by 2029 as upstream projects fall behind schedule.
Plans to tap the country’s offshore gas potential have been further hindered by Shell’s decision in April to exit three blocks – Col 5, Purple Angel and Fuerte Sur – and licensing hurdles that have stalled drilling at the Komodo prospect, a joint venture between Ecopetrol and Occidental Petroleum.
Villegas said Colombia would need to attract foreign companies to unlock its offshore potential, adding that current policies aimed at accelerating a shift away from fossil fuels were discouraging investment.
“The current administration does not support new fossil fuel projects, which is likely why Shell exited and why the Occidental project is uncertain,” he said. “Everyone says Colombia has large offshore reserves, but Ecopetrol can’t develop them alone. Private investment is essential, and only Petrobras seems willing to invest, possibly due to political ties.”
“Also, high prices are reducing industrial and transportation gas demand. Some industries are even switching back to coal, especially those requiring high heat. That undermines long-term gas demand projections.”
(The original version of this content was written in English)