Friday, October 30, 2015

How Colombia can protect its natural gas supply

As we discussed earlier this week, Colombia is in danger of needing to import natural gas as soon as early next year because of the collapse in hydroelectricity caused by El Niño. On Friday, La República outlined Colombia’s options for securing its natural gas supply in 2016.

According to Juan Carlos Echeverry, president of Colombian state oil company Ecopetrol, Colombia must take advantage of Venezuela’s vast natural gas reserves and develop a closer trade relationship with its neighbor. Echeverry added that Colombia already has an importation contract with Venezuela, which will go into effect as soon as it is needed. Mines and Energy Minister Tomás González also noted that the natural gas pipeline between Cartagena and Sincelejo will come online on the first of December, allowing Colombia to extract an additional 50 million square feet of gas per day from the Sucre and Córdoba fields.

In other oil-related news, El Tiempo reported that the collapse in oil prices has affected not just Ecopetrol’s profits, but also its reputation. Ecopetrol fell from first to third in the annual Merco business reputation rankings, primarily due to the company’s depressed earnings.


Lastly, El Tiempo also reported that the closure of the Colombian border with Venezuela has lead to a sharp decline in Colombian gasoline inventories, in some cases below the minimum level required by Colombian law. This information has allowed industry experts for the first time to appreciate the scale of the gasoline smuggling industry that brought heavily subsidized gasoline from Venezuela to Colombia.

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