Colombia gas producers project shallower decline

Colombia's natural gas producers are forecasting a shallower long-term decline in production this year compared with 2019, in spite of the country's shrinking reserves.

According to Colombian gas chamber Naturgas, the sector's 2020 annual declaration of production capacity for the period of January 2020 to December 2028 averaged 8pc higher over last year, even though projected output is still on course to fall to just under 400mn cf/d at the end of the nine-year period, from around 1.1bn cf/d at the start of 2020.

Naturgas highlighted a projected bulge in output in 2024-25, thanks to higher estimates from Canadian independent Canacol, Colombian state-controlled Ecopetrol unit Hocol and US independent Lewis Energy Group.

In the same 2020-28 period, this year's projection for uncontracted gas available to the market was up by an average of 17.4pc, Naturgas said.

"The production declarations show that year to year we can increase the availability of natural gas with local sources and guarantee energy security," Naturgas president Orlando Cabrales said. "With the right incentives to increase production, along with the back-up of imports, the country can be reassured of having the necessary supply to meet demand."

The supply outlook paints a brighter picture than reserves do. According to a preliminary reserves report released by the government in April, Colombia's proven gas reserves totaled 3.1 Tcf at end-2019, equivalent to eight years of production, down from 3.8 Tcf or 9.8 years at the end of 2018.

Cabrales stressed the supply potential of Colombia's untapped unconventional resources and Caribbean offshore blocks, including Ecopetrol's Orca discovery which is expected to come on stream in 2024-25. These new sources, on top of conventional onshore deposits such as Cusiana and Cupiagua, should offset decline from the country's mature Guajira gas complex, which Chevron divested to Ecopetrol early this year.

Cabrales said the government's plan to install a regasification terminal on the Pacific coast, on top of the existing 2.9mn t/yr Caribbean coast terminal, would complement domestic production. He highlighted the strategic role that LNG is playing for thermal power generators at a time when hydroelectric reservoirs are low.

By Patricia Garip