New government must prioritize Colombia's 2nd LNG hub, says Naturgas
Colombia's natural gas industry association has urged incoming energy minister María Fernanda Suárez to prioritize plans for a new liquefied natural gas (LNG) import facility on the Pacific coast.
Suaréz, currently the executive vice president of state oil company Ecopetrol, was appointed to the cabinet post by president-elect Iván Duque on Wednesday. She will replace Germán Arce on August 7, when Duque formally succeeds outgoing President Juan Manuel Santos.
Naturgas, as the gas association is known, listed the proposed Buenaventura LNG facility in Valle del Cauca department as one five key challenges facing Suárez in the natural gas segment.
"The future expansion of thermal [power] generation should be supported mainly by natural gas," Naturgas president Orlando Cabrales said in a statement.
"The country's thermal plants must back up their natural gas energy obligations using new regasification infrastructure on the Pacific coast and stop doing so with diesel."
According to the project's blueprint, the Pacific LNG terminal will process up to 400Mf3/d (11M3/d) of gas and will require expected investments of US$400mn.
An associated 75km pipeline is expected to cost US$260mn and will connect the plant to Yumbo on the northern outskirts of Cali, Colombia's third largest city.
Valle del Cauca officials have said a tender for the projects will be launched this year. According to documents published by government energy planning unit UPME, the facilities are due to being operating in 2021.
The Pacific LNG hub is seen as vital in Colombia's efforts to meet growing fuel demand for thermoelectric power generation and reduce its reliance on hydropower.
Colombia's first LNG import, storage and regasification terminal at the Atlantic port of Cartagena went into service in December 2016.
LNG is not the only pressing issue for the new government in the natural gas segment, according to Naturgas.
It said that other measures needed for the sector to flourish are the removal of fiscal, political and legal snags that currently hinder offshore and onshore gas exploration projects; greater flexibility and simplification of rules that promote efficiency and investment; policies that generate long-term demand and establish firm air quality standards in major cities; and policy changes that make the gas industry more "dynamic and efficient".
Suárez is credited with spearheading changes that turned around Ecopetrol's fortunes after taking over as the company's strategy and finance head in 2015. Ecopetrol's net profit hit 6.6tn pesos (US$2.32bn) in 2017, its highest earnings in four years, as it recovered from a prolonged crude price downturn.
The 44-year-old has also held executive positions with private firms such as Citibank and Bank of America, and has served as a board member for Colombian energy companies ISA, Isagén and XM.
"[Suárez] is a woman who knows the energy sector and has worked to strengthen it in her role with Ecopetrol and as a director of other companies in the sector," Cabrales said. "That gives us peace of mind and motivation to work together in overcoming our challenges."
He added: "The new minister has witnessed the natural gas revolution that the country has experienced in recent decades, and the economic, social and environmental benefits of this fuel. We have many regulatory, production, investment and energy security challenges that we will address actively and respectfully with the new government."
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