As part of the negotiations, officials are exploring whether state run Petróleos de Venezuela SA can repair a badly damaged section of the 224 kilometer (139 mile) gas pipeline connecting the two nations without running afoul of US sanctions, Mines and Energy Minister Edwin Palma said in an interview Friday.
While the governments of the two South American nations had previously announced plans for exports to start at the end of last year, Venezuela now has availability to sell 50 million cubic feet of gas a day and is ready to spend between $20 million and $30 million for the repairs, according to Palma. About 4.7 kilometers of the pipeline on the Colombia side needs to be fixed, and repairs would take about three months, he added.
“They now have the volumes, there is political will and now they need to repair the pipeline,” Palma said, adding that imports can happen as soon as this year. “We are looking for a solution to remove these doubts. If in the end we see it can’t be done, that’s it, but at least we’ve tried.”
Venezuela’s information ministry did not immediately respond to a request for comment.
Colombia began importing liquefied natural gas at the end of last year to meet demand from households and businesses as the nation’s reserves dwindle, and new wells in Caribbean waters won’t come online until at least 2029.
While this year’s shortfall is being met by spare capacity at Colombia’s only LNG import terminal in Cartagena, known as SPEC, additional infrastructure needs to be built to meet demand. The deficit, which started off at an equivalent of 4% of total demand, is expected to widen to as much as 20% next year.
Although about 15 projects are being discussed, gas “demand in our country allows for just two” projects, Palma said.
Palma said he’d prefer state-run Ecopetrol SA join forces with Grupo Energía Bogotá’s unit TGI to build a facility that is being discussed for northern Colombia where there is a connection to the national pipeline system. That would allow the two companies to “share the risk,” he said, adding that the project could be ready by as early as September of next year if it starts soon.
However, any natural gas from Venezuela stands to reduce the amount of LNG imports to Colombia. And supplies from the neighboring country are expected to cost less because its cheaper to transport gas through pipelines, he added.
“The best exercise we can do is try and find gas that we bring from anywhere at a good price,” Palma said. “It serves the industry, it serves the citizens and it serves the market.”
–With assistance from Fabiola Zerpa.
(Updates with estimated shortage and comments starting in seventh paragraph.)
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