News and AnalysIs for

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.

The Ministry of Mines and Energy (MinMinas) and the Energy & Gas Regulation Commission (CREG) said they will regulate long term contracts signed in 2013 and 2014 so that they cannot rise faster than inflation.

Two senators have taken up the cause advanced by former Senate president, Senator Jose Name, which led to the Ministry of Mines and Energy (MinMinas) and the Energy & Gas Regulation Commission (CREG) to freeze natural gas prices, citing the interests of the final consumer along the Caribbean coast.

The Ministry of Mines and Energy is preparing a decree which it says is necessary to stimulate the construction of gas pipelines through direct state intervention and tenders. But private industry says the problem is in the regulations.

A study from an energy consultancy found that the Colombian thermoelectric sector only has 34% of the natural gas it needs to purchase to produce the country’s energy during the El Niño weather phenomenon.

The growing demand for Natural Gas Vehicles (NGV) could quicken if new vehicles for the transport industry become available, but the process to receive tax benefits for the “cleaner” vehicles and questions on supply hold the market back.