Venezuela is studying whether it could revive an abandoned pipeline in western Venezuela to export natural gas, according Juan Ricardo Ortega, the head of one of Colombia’s biggest power companies.
By Bloomberg – Patricia Laya and Fabiola Zerpa
Aug 3, 2022
State-controlled Petroleos de Venezuela, or PDSVA, is hoping to restart a 139-mile pipeline that connects Venezuelan gas fields with northeast Colombia, said Ortega who is CEO of Grupo Energia Bogota SA.
Colombia’s proven natural gas reserves have fallen in recent years
“As transporters we have the infrastructure that could bring that gas to the market and we’re more than interested for that to happen,” Ortega said in an interview on Monday. “There are many activities that could transition to gas in Colombia if it had the reliability and the right price.”
PDVSA didn’t reply to messages seeking comment.
Re-opening the infrastructure known as the Trans-Caribbean Antonio Ricaurte pipeline could help Venezuela recover from its economic slump, and cut the risk of a gas shortage in Colombia in 2025 or 2026. Venezuela has about 197 trillion cubic feet in proven natural gas reserves, the 8th most in the world, as well as the world’s biggest crude deposits.
GEB, which is majority owned by the city of Bogota, could help make the necessary repairs needed for the pipeline to function.
A green light from US Treasury is likely needed to reach a deal since PDVSA is subject to sanctions.
Washington has been negotiating with the Venezuelan government of President Nicolás Maduro since Russia’s invasion of Ukraine, as the US sought to guarantee energy supplies amid the disruption caused by the conflict.
The project could mark the restart of energy ties between Bogota and Caracas as incoming Colombian President Gustavo Petro and Maduro prepare to open borders and renew trade after years of hostility between the two countries. Petro will be sworn in as president on Aug. 7.
Petro has pledged to phase out fossil fuels, but appears to favor gas over oil and coal. Incoming finance minister José Antonio Ocampo told the Financial Times last month that natural gas could serve as a transitional energy source as the country moves to renewables.
The pipeline was inaugurated in 2007 by former presidents Hugo Chávez and Alvaro Uribe, but has been idle since 2015. It runs from Riohacha in Colombia’s Guajira province to Zulia state in western Venezuela. PDVSA paid about $335 million for its construction.
Natural gas prices have soared in Europe in recent weeks, as Russia cut supplies amid friction over its invasion of Ukraine. Colombia doesn’t face the same risk of becoming over-dependent on foreign gas, since it uses clean hydroelectic power for most of its electricity generation, Ortega said.
Colombia produces more than two thirds of its electricity with hydroelectric power, but often boosts gas and coal generation at times of drought.