GEB and TGI plans

Company News    Mar 29, 2021 4:42 PM

TGI’s Mónica Contreras and GEB’s Juan Ortega spoke about the companies’ plans for the next few years, ISA and inorganic growth in the region.

Contreras told Valora Analitik that TGI will deleverage approximately 20% of revenues because of the termination of the Ballenas-Barranca contract.

She said that gas demand has been flat since 2019 and this decreased in 2020 due to the pandemic.

Contreras acknowledged that the reduction in Ballenas-Barranca will not be offset, but the company hopes to leverage innovation opportunities in segments such as hydrogen.

Contreras said TGI is working with Ecopetrol (NYSE: EC) on the bi-directionality of the Ballenas-Barranca project in northern Colombia to guarantee the future connection of the TGI-Promigas system.

Another important project for TGI is Orca, being a high bet due to its gas potential. Contreras said that this project must first have a pipeline infrastructure ready.

Ortega said that Colombia should bet on a transition strategy with gas as the main energy component, in addition to hydrogen projects.

GEB is evaluating the adaptations that TGI requires to mix in hydrogen and is reviewing its infrastructure on items such as oxidation and other challenges, according to Ortega.

The expert said that, despite all the advances, hydrogen is still expensive and difficult to store because “it is very explosive.”

“It would be naive to say that it is the immediate solution,” Ortega acknowledged.

The expert said that GEB is working to be a flatter company and generate efficiencies to face future challenges.

Ortega explained that growing inorganically is important to achieve this goal, also considering that GEB is the best option to buy ISA’s shares.

GEB will focus on the gas, transportation, and unconventional energy segments, strengthening its focus in the city on issues such as public lighting and electric transportation.

Ortega highlighted that the focus is on Colombia and Brazil and the company has a pre-approved loan quota of US$5B.

GEB together with Enel are planning investments in unconventional renewables in Colombia.

Ortega said that it is a priority to think about new acquisitions and if the issue does not advance in Colombia, the company will look at opportunities in Brazil.

Bottom-Line: Companies want to invest in the country, and they are waiting for the right signals from the government.

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