Colombia's plan to start importing natural gas from Venezuela this year may not materialize because of a decayed idle pipeline in dire need of repairs, an industry official told Bloomberg.
Colombia's domestic natural gas resources are not enough to meet growing demand, which has risen in recent years due to the El Nino, which has reduced hydropower generation and raised the need for gas-fired power.
At the end of 2022, Colombia's leftist President Gustavo Petro announced that an agreement had been secured to import natural gas from Venezuela. This deal forms a key part of the president's plans to end issuing new oil and gas exploration licenses in Colombia while guaranteeing the Andean country's energy security.
Colombia's Ecopetrol, which is majority-owned by the state, said in November that it was exploring a proposal from Venezuela to start importing natural gas from its neighbor beginning in December 2024.
Colombia will benefit from cheaper gas from Venezuela, which could also lower the cost of electricity, the Colombian government said at the time.
However, the pipeline expected to ship the gas from Venezuela to Colombia is in no state to serve natural gas transportation, Luz Stella Murgas, who heads the industry group Naturgas, told Bloomberg.
This likely means that Colombia cannot begin gas imports from Venezuela this year.
"Colombia has the opportunity to increase its sources of natural gas," Murgas told Bloomberg.
"But we need to materialize these projects."
Last year, Colombia's tender to add a second LNG import terminal received only one bid, and the lack of investor interest is further complicating the country's efforts to ensure enough gas supply amid uncertain rain patterns with the El Nino weather phenomenon, Natural Gas Intelligence noted.
Colombia will need investments of at least $2 billion in natural gas infrastructure over the next decade to meet its rising gas demand, according to a recent government report cited by Bnamericas.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More