Gas supply policy to be reviewed?

Regulation & Policy    Nov 24, 2021 4:37 PM

The Colombian Association of Large Industrial and Commercial Energy Consumers (Asoenergía), reiterated the need for a comprehensive review of as supply policy and its relation with transportation.

The entity explained that this is with the goal of defining the new gas sources that the market needs, after the failure of the recent call for the Regasification Plant of the Pacific, La Republica reported.

Asoenergia said that this generates an opportunity to rethink the gas supply policy and to optimize the use and expansion of the transportation infrastructure.

“We will wait for the approval of transportation charges with the new methodology, but the anticipated approval of the transportation tariffs of some pipelines for the fulfillment of the Normative Useful Life (VUN) of the pipelines outside this framework, is worrisome,” Asoenergía Sandra Fonseca said.

Fonseca said that it is important to consider promoting the increase of domestic supply, with competitive gas prices, and to regulate transportation. The goal is to integrate the market, optimize the use of transportation infrastructure, and guarantee access to all gas supply in the country in an efficient manner.

“The greatest impact on efficiency is achieved with the neutrality of transportation, and the optimization of the National Transportation System (SNT) to have an integrated market and avoid rent sharing and price discrimination by submarkets or producers,” Fonseca explained.

The expert added the new UPME call should be broad in the sense of offering a new source, whether domestic or international, at the point where the offerer considers it can be injected into the national system in an economic, effective and timely manner, without closing itself to alternatives, locations or other conditions beyond the security of long-term delivery.

Bottom-Line: Colombia needs to guarantee gas supply for the medium and long term, and the best alternative is to boost local production.

The sector is interested in leverage the potential of Colombian gas, but companies need better transportation conditions, competitive costs and support in social issues, mainly.

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