News and AnalysIs for

We have been tracking the debate and discussion on Colombia’s gas supply which is tight now and will likely follow with a deficit in supply in 2016. We noticed yet another entity that has confirms that the cost of gas is on the rise: Colombia’s statistical agency DANE.

Canacol Energy (TSX:CNE) reported its third quarter 2015 results, which showed a sequential increase in production and a fall in costs, but gas production fell sequentially although up year-over-year.

Gases de Occidente says that it is prepared to invest US$50M in a 111km pipeline from Valle del Cauca to Buenaventura to improve the natural gas offer, which will take three years to build, but is still awaiting approval from the Energy and Gas Regulation Commission (CREG) on its planned rates.

The president of the Colombian Natural Gas Association Eduardo Pizano says that there must be an emphasis on finding new gas to meet the demand, and that without these discoveries it will be impossible to justify more distribution infrastructure.

GasGasThe International Gas Union (IGU) wrapped up its congress in Cartagena, with the issue of supply and price in Colombia being a major issue, but it also called for a greater focus on highlighting the environmental benefits of natural gas over other hydrocarbons.

GasIndustrial users on the Caribbean are already feeling a pinch in their gas supply and costs due to El Niño, and this depicts a larger problem of how to boost Colombia’s short term gas supply.

The El Niño weather phenomenon has led to a sharp increase in demand for natural gas, and industries on the Caribbean coast are calling for government intervention due to the deficit and soaring prices.

GasThe El Niño weather phenomenon has intensified from moderate to strong according to the state weather institute IDEAM, and rain shortages in September will mean a strong increase in demand for natural gas, squeezing electrical energy generators.

Globally there are 20M natural gas vehicles (NGVs) with over 500,000 of these in Colombia, according to Pablo Roda, a spokesperson with the Natural Gas Association (Naturgas) who spoke at the Colfecar transportation congress.

GasThe Natural Gas Association (Naturgas) president Eduardo Pizano says that the organization expects new gas production to come online in the first quarter of 2016, with an additional 130mmcfd due to developments from a handful of companies.