Colombia should prioritize expanding the Cartagena LNG regasification plant before moving forward with other liquefied natural gas projects, according to the facility’s main shareholder.
In its recently published annual gas market report, Promigas confirmed that it is looking to increase the capacity of Colombia’s only LNG import terminal, with the planned work expected to increase daily regasification by 100 Mf3.
“This is an option that should be carefully evaluated by government entities and key industry officials before a decision is made to embark on the construction of new high-cost LNG infrastructure,” Promigas said.
“The purpose of this expansion, in addition to continuing to serve [three] thermoelectric power stations, is to complete the national supply and help meet demand, ”he added.
The Barranquilla-based company has brought in regulator Creg to facilitate the expansion and establish the characteristics of the infrastructure, such as whether it will be land-based or on a floating offshore platform.
According to Promigas, the proposed works offer the best way for Colombia to avoid an impending gas shortage, which authorities say could occur as early as 2024.
“The need to integrate LNG in addition to local gas production … [means there is] high probability of requiring an extension of [the Cartagena LNG plant]. This is the only certain option to guarantee supply during critical periods before 2025, “the report said.
Promigas owns a 51% stake in the SPEC consortium which operates the Cartagena terminal, the remainder being held by the Dutch tank storage company Royal Vopak.
Completed in 2016 at a cost of US $ 427 million, the Cartagena LNG plant includes a floating regasification storage unit (FSRU) with 170,000 m3 of retention capacity and a daily regasification potential of 400 Mf3 / d .
It is connected to the national gas network via a 9.2 km gas pipeline. SPEC also has long-term contracts for the supply of three local gas-fired power plants.
PACIFIC LNG CONCERNS
Promigas expressed doubts about the long delayed Pacific LNG project.
Planned for the west port of Buenaventura, the installation should be completed by the end of 2026 at an estimated cost of $ 700 million. A bidding process was relaunched in June, giving potential developers until October 21 to submit technical and economic proposals for the project.
“The risk for the investor lies in the possibility of a force majeure event which cannot be resolved, and which prevents the start of commercial operations. The investor would not have a mechanism to recover his investments or receive compensation. for the costs incurred, ”the report read.
He added that under the current contract model, the investor would be rewarded for delays in constructing the pipeline component by receiving funded payments from end users.
“The project is protected by a series of mechanisms and what will happen is that the users will be those who will be responsible for the income that the regasification plant requires, without their connection to the transport system being ensured”, the added document.
OTHER LNG IMPORT PROJECTS
The report also describes in detail two other proposed LNG import projects in northern Colombia: one in the Gulf of Morrosquillo and the other in La Guajira.
“Everything indicates that the characteristics and technical specifications of these factories could be very similar to the infrastructure of SPEC LNG in Cartagena and that which would be developed in Buenaventura,” he said.
According to Promigas, the proposed Morrosquillo Gulf project in the Department of Cordoba would require additional investments to connect the terminal to the national pipeline network.
“In the future, this complex would serve to guarantee the supply of natural gas as the Jobo-Medellín-Mariquita-Bogotá pipeline would then be operational,” he said.
Meanwhile, the La Guajira regasification complex would allow natural gas to be supplied to the east and center of the country via the Ballena-Barrancabermeja pipeline, the report notes. The two terminals could choose to import LNG from the Gulf of Mexico to the United States given the geographic proximity, he added.