Colombian Industry Braces for Gas Rationing

Colombian companies are bracing for gas rationing as the nation’s sole import terminal closes for scheduled maintenance, casting a spotlight on the Andean country’s widening supply deficit.  

In a bid to avoid blackouts on the populous Atlantic coast, the Energy Ministry has said it will prioritize supply to local gas-fired power plants, households and small businesses during the Oct. 10-14 outage of the SPEC liquefied natural gas terminal outside Cartagena. 

While the LNG import facility pauses operations, around one-third of industrial gas demand will be unmet, according to industry trade group Asoenergía.

Although the maintenance is brief, some factories have furnaces that require several days to completely shut off and days more to restart. 

The scarcity is pitting Colombia’s biggest industrial and commercial energy users against power generators. 

The government prefers to allocate gas supply cuts to industries even though power generators should have timely backups in place that they are paid to maintain, said Sandra Fonseca, head of Asoenergía. “This hurts industrial output,” she said in a written response to questions, adding that the companies won’t be compensated for the shortfall. 

The trade group representing power generators, known as Andeg, declined to comment. 

Colombia began importing LNG in 2016 to occasionally fuel thermal power plants as recurring droughts restricted the country’s mainstay hydroelectric units. 

Then at the end of 2024, Colombia resorted to LNG to meet demand from households and businesses as domestic gas production declined. 

The Andean nation, which is now facing a structural gas shortfall of around 17% of total demand, will see that gap widen to as much as 20% next year, according to trade group Naturgas. If by 2029 no new domestic sources of gas are added, the shortfall could reach as high as 56%, the group says.

While Colombia’s oil and gas reserves had been declining for years before President Gustavo Petro came to power in 2022, his administration has exacerbated the decline by freezing new drilling contracts. He has also sought to revive a plan to import pipeline gas from neighboring Venezuela that few Colombians trust would be able to deliver it amid US sanctions and rising tensions.

Facing blistering criticism over the gas rationing, Petro blamed previous governments for allowing SPEC to be a “private monopoly.”

He was responding to former Senate president Efraín Cepeda, one of many presidential hopefuls vowing to restore priority to oil and gas exploration. Petro leaves office next year.

SPEC is owned by Colombian gas company Promigas SA and Rotterdam-based Koninklijke Vopak NV.

State-controlled oil company Ecopetrol SA is finalizing plans to set up new LNG import facilities, with a first one in Colombia’s Pacific coast set to start operating late next year. 

Ecopetrol Chief Executive Officer Ricardo Roa said this week the company will replace part of its own gas consumption with oil liquids to free up supply for other users. 

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.