Colombia's Ecopetrol expands gas imports amid domestic shortfall

Colombia's state-controlled oil company, Ecopetrol, is accelerating plans to import gas as the Latin American country faces declining reserves and rising domestic shortages. Two new import terminals are set to become operational by next year to help stabilise supply until offshore Caribbean wells begin production, anticipated in 2029, La República reported.

Ecopetrol CEO Ricardo Roa said that the company would secure long-term contracts, spanning five years or more, to ensure a steady flow of liquefied natural gas (LNG) at lower costs compared with short-term agreements, Bloomberg reported.

According to the Bolsa de Productos de Colombia, the commodities exchange, domestic gas shortages are expected to reach 5% in 2024 and 17% by 2026, exacerbating supply concerns.

The largest of the planned import terminals, located at Ecopetrol’s Chuchupa platform off Colombia’s northern coast, will have a capacity of 5.7mn cubic metres per day and is expected to be operational in late 2026. A second terminal in Buenaventura on the Pacific coast will handle 1.7 mcm per day, with LNG transported via specialised vehicles to a regasification plant near Cali, Bloomberg reported.

Colombia has transitioned into a net gas importer as domestic production struggles to meet demand. The country’s largest distributor, Vanti, recently announced a 36% price hike, citing the higher costs of imported LNG, which is two to three times more expensive than local supply, according to El Espectador.

President Gustavo Petro Urrego’s energy transition policies, including a moratorium on new oil and gas exploration licences, have drawn criticism amid concerns over energy security. Energy Minister Andrés Camacho has downplayed the need for imports, but market participants have increasingly sought LNG from the US and other regions to cover supply gaps, Bloomberg reported.

Despite these challenges, Ecopetrol has reported an increase in proven reserves. As of December 31, 2024, the company’s oil and gas reserves rose to 1.89bn barrels of oil equivalent (boe), extending its production horizon to 7.6 years. However, gas reserves make up only 20% of the total, highlighting ongoing supply risks, El Espectador noted.

While onshore exploration has not yielded significant new reserves, offshore fields remain the focal point for future gas development. In December, Ecopetrol and Petroleo Brasileiro announced that the Sirius-2 offshore discovery in the Caribbean could potentially triple national reserves if commercially viable, representing the country’s largest potential gas find, Bloomberg reported. However, production from these fields is not expected before 2029.

BTG Pactual analysts Daniel Guardiola and Luiz Carvalho noted that despite a strong reserve replacement ratio of 104%, gas depletion remains a pressing issue. Ecopetrol’s gas reserves declined to 6.7 years in 2024 from 7.2 years in 2023, while oil reserves increased slightly to 7.8 years from 7.7 years. Ecopetrol shares fell as much as 2% in Bogotá following the announcement.

Ecopetrol is also strengthening its domestic oil production by acquiring full ownership of the CPO-09 block in Colombia’s eastern plains after purchasing Repsol’s 45% stake for $452mn, Bloomberg reported. This acquisition enhances the company’s presence near the Castilla and Chichimene fields, enabling operational synergies to boost production.

“We’re looking to increase our reserves and output,” said Rafael Guzman, Ecopetrol’s vice president of hydrocarbons, at a recent industry event in Barrancabermeja, the news service reported.

Simultaneously, Ecopetrol continues investing in US fracking operations despite government opposition. The company renewed its joint venture with Occidental Petroleum in the Permian Basin, committing over $880mn to drill 91 development wells in 2025. This partnership has been instrumental in supporting Ecopetrol’s production, with Permian operations accounting for 14% of the company’s output in Q3 2024, Bloomberg noted.

However, President Petro has instructed Ecopetrol to divest from its US fracking ventures, citing environmental concerns. This directive raises questions about the company’s international strategy and its ability to maintain production levels while aligning with government policies, said El Espectador.

Ecopetrol’s investment strategy for 2025 reflects its urgency in addressing Colombia’s energy challenges. The company plans to allocate between COP24 trillion and COP28 trillion ($6.1bn-$7.1bn) to exploration and production efforts to mitigate the anticipated energy deficit.

The company’s focus on domestic production, sustainable energy sources, and responsible resource management aligns with broader industry trends responding to environmental and regulatory pressures. However, the balance between government policies, energy security and financial performance remains a crucial factor in Ecopetrol’s long-term strategy.