Project to import natural gas from Venezuela to Colombia cancelled

Private project to import natural gas to Colombia from Venezuela was cancelled due to corruption scandal.

A project to import natural gas from Venezuela to Colombia with an investment of up to US$45 million and which sought to reactivate the Antonio Ricaurte Trans-Caribbean Gas Pipeline was cancelled due to the corruption scandal rocking the oil nation, informed one of the companies involved in the failed plan.

Energy Transitions, the Colombian company that sought to import the fuel from the neighboring country, said it made the decision to cancel the project because of reports linking Bernardo Arosio, a partner of the Venezuelan firm Prodata Energy, to a corruption investigation by the Venezuelan Attorney General's Office.

Prodata Energy is a Venezuelan company that planned to sell the fuel to the Colombian firm that would import it.

"By virtue of the known facts, and in strict compliance with our policies of good governance and corporate social responsibility and prevention of the risk of money laundering and financing of terrorist activities, Energy Transitions has decided to immediately cancel the project to import gas from Venezuela," the Colombian company said over the weekend in a statement.

An anti-corruption investigation by Venezuela's Attorney General's Office led to the arrest of 10 officials and 11 businessmen, as well as the resignation of Oil Minister Tareck El Aissami, one of the most powerful men in the oil nation's government.

Energy Transitions had been developing the import project since February 2020, in order to offer Colombia a new natural gas alternative at attractive prices for consumers, which would complement the national supply.

"To date, no gas sales contract had been advanced, since it was subject to the approval of the State Department of the United States Government, according to the request that our company made to this entity in November 2022", assured the Colombian energy trading company Energy Transitions.

HIGH DEMAND FOR GAS IN COLOMBIA

The United States maintains economic sanctions against the government of Venezuelan President Nicolás Maduro, which may be extended to individuals who do business with that country.

Prodata Energy, the Venezuelan company that planned to buy and export the fuel to Colombia, had received authorization from PDVSA gas in October 2020 to export the fuel.

In Colombia, gas is in high demand in industry, power generation, as well as in the residential and transportation sectors.

The private initiative initially contemplated importing 25 million cubic feet per day from Venezuela and in the long term increasing it to 200 million cubic feet per day, according to what some of the businessmen involved in the failed operation told Reuters.

The Antonio Ricaurte pipeline was used by Colombia's Ecopetrol to export gas to Venezuela.

The 26-inch diameter, 224.5-kilometer pipeline between Punta Ballenas, in Colombia's Guajira, and the eastern shore of Lake Maracaibo, in Venezuela, was inaugurated in October 2007 and has not been in use since 2015 when it was suspended amid diplomatic difficulties.

Previous versions about a possible import of natural gas from Venezuela caused controversy in Colombia and the rejection of some leaders of the sector, with the argument that it is not necessary because the coffee-growing country can be self-sufficient and increase its reserves.

The outgoing president of state-owned Ecopetrol, Felipe Bayón, recently told Reuters that Colombia can do without Venezuelan gas due to its own promising offshore development.

Venezuela has 197.1 trillion cubic feet of natural gas in proven reserves, a figure that places it in eighth place worldwide, while Colombia has proven reserves of 3,164 giga cubic feet, equivalent to 8 years of consumption.

(Report by Luis Jaime Acosta, edited by Nelson Bocanegra)