If contingencies are overcome, Colombia would double proven gas reserves: ACP

The Colombian Association of Oil and Gas (ACP) presented the report New natural gas projects: key to Colombia's energy self-sufficiency, on the country's natural gas reserves and the importance of developing local gas that generates income for the nation and the regions.

According to the analysis, if existing contingencies are overcome and already discovered resources are developed, Colombia could double its reserves and ensure gas self-sufficiency until the end of the decade.

• The additional volumes of already discovered gas could double the country's current proven reserves.
• The development of just 11 specific projects identified by the ACP would allow the country to increase the current supply by 60% and ensure its self-sufficiency until the end of the decade.
• The guild presents a roadmap to enable natural gas projects in Colombia.

These additional volumes of discovered resources correspond to Probable and Possible Reserves, which increased by 6%, from 1,022 gigacubic feet of gas (GPC) in 2019 to 1,082 GPC in 2020; as well as to contingent resources, which increased by 11% from 2,362 GPC in 2019 to 2,636 GPC in 2020, according to the ANH Resource and Reserve Report. Likewise, there is a prospective gas volume that corresponds to 8.5 times the country's current reserves.

Of these resources, the ACP identified 11 projects that would be key to increasing gas self-sufficiency, as well as generating new income for the country. These projects would contribute to the market: 10 million cubic feet per day (MPCD) additional in 2021; 155 MPCD additional in 2023; and more than 700 MPCD in 2027. Thus, the entry into the market of the new supply projects analyzed by the ACP from already discovered resources (3P Reserves and contingent resources) would allow extending gas self-sufficiency until 2026 – 2027, according to the demand scenario.

However, to ensure the development of these projects and achieve their entry into the national market in the short and medium term, it is necessary to overcome contingencies regarding access to transportation infrastructure, community opposition to the projects, pending procedures, market conditions, and prices that raise doubts about the viability of the projects, among others. These obstacles mainly arise in regions such as the Caribbean and Eastern Plains.

In this regard, the ACP presents a roadmap of five strategic axes to overcome technical, environmental, social, and regulatory contingencies and enable these projects: (i) facilitate exploration and production; (ii) set competitive gas pipeline tariffs; (iii) connect Caribbean and inland gas markets; (iv) flexibilize gas marketing; and (v) avoid competitive asymmetries against imported gas.

“Making these projects a reality depends on the implementation of concrete measures, which must be accompanied by a public policy and a review of the regulatory framework that, in addition to supporting the development of onshore and offshore operations, promotes exploration, production, and the growth of the natural gas market in Colombia,” said Francisco José Lloreda Mera, president of the ACP.

In addition to providing tranquility in the country's energy self-sufficiency, the development of these resources would generate additional fiscal revenues from royalties, taxes, and contractual economic rights. The ACP estimates that each million cubic feet per day of new gas generates annual fiscal revenues of 1.5 billion pesos, in addition to jobs and economic and social development in the regions.

“Given the importance of natural gas in the national energy matrix and its growing role in the energy transition, it is necessary to continue promoting its growth as a low-emission energy source and ensure supply in the medium and long term. Colombia must strive to guarantee its energy security and independence, prioritizing the use of available resources in the subsoil that also generate fiscal revenues, which is why we hope this roadmap will serve to advance the necessary measures and promote the development of an industry that represents significant benefits for the country and the regions,” emphasized the union leader.

[prefix_calltoaction title=»Economic report New natural gas projects: key to Colombia's energy self-sufficiency» button_text=»Download» button_link=»https://acp.com.co/web2017/es/asuntos/economicos/831-informe-economico-acp-reservas-de-gas-2020-hoja-de-ruta»]The national government, through the Ministry of Mines and Energy and the National Hydrocarbons Agency – ANH, recently published the 2020 Reserves Report, which reflects that, in the case of natural gas, “proven reserves have decreased for the third consecutive year, from 8.1 years to 7.7 years of useful life”, a scenario that has raised concerns about the supply of natural gas in the country.[/prefix_calltoaction]