Colombia 2020 | ENERGY | INTERVIEW

Promigas has been bringing progress and well-being to Colombia and Peru for more than 45 years, with an active role in the process of massification of natural gas in Colombia.

Eric Flesch

Previous to becoming the President of Promigas, Eric Flesch held the position of president at the Argos Corporation in the US, a company that he was involved with for 39 years through various positions and in which, since 2005, he played a strategic role in the expansion and growth of the organization in the US. Flesch has a degree in civil engineering from Universidad del Norte, with an MBA in finance and marketing from West Coast University. He also has taken executive leadership courses from institutions such as Stanford, Harvard, Berkeley, and Northwestern, among others.

Promigas is looking to expand its business outside of Colombia. In which countries does it seek to grow, and what are its projections for 2020?
We recently deepened our commitment to expanding operations in Peru through a natural gas distribution agreement with the government in Piura, the second-most populous region after Lima, to reach 250,000 new users. We are also looking at the Caribbean and Centroamerica, where most countries depend on heavy fuel oil as the main power generation source, making them especially vulnerable to volatile oil prices. Natural gas can provide a feasible alternative to reduce fuel oil dependency for roughly 25 million people, according to International Energy Agency (IEA) estimates, thereby lowering electricity prices.

What is the scope of investment and main goals of the new Gasoducto Jobo-Majaguas pipeline in Sucre and Cordoba, and what impact will it have in the local market?
Since December 2018, we have constructed this pipeline, connecting new natural gas reserves to markets in Barranquilla and Cartagena, with a lump-sum investment of USD200 million. It is strategic for all of Colombia's Caribbean coast, since declining natural gas reserves in La Guajira are now compensated by new findings in Sucre and Cordoba. Colombia's largest oil refinery in Cartagena, alongside many other industries in northern Colombia, depends on natural gas as an energy source.

What is the mission of your Energy and Gas Research and Innovation Center (CIIEG), and what will be its main activities for 2020?
CIIEG seeks to develop new energy alternatives for a highly diversified Industry 4.0 solutions portfolio. Amongst many things, we are looking into the optimization of natural gas-powered dedicated vehicles. China already has a 5-million vehicle fleet, and the opportunities in the hemisphere are significant.

How is Promigas promoting the offshore and fracking explorations on the Caribbean coast, and what potential does the company see with these concessions?
We focus on addressing energy affordability as a means for promoting competitiveness and increasing human development. Colombia has a few natural gas sources, namely offshore exploration and unconventional natural gas resources, also known as fracking. It is estimated that offshore reserves in the Caribbean Sea, which include Kronos, Gorgon-1, Purple Angel-1, Tayrona, and Orca-1, hold reserves of up to 30TPC. Our Pacific coast also has offshore potential with the Choco offshore, Tumaco offshore and Pacífico Profundo, which are estimated to hold 5.88TPC. Currently, Colombia has proven natural gas reserves of just 3.8TPC, which is enough for about 9.8 years; however, we have unconventional natural gas resources estimated between 4-24TPC in Magdalena Medio, Cesar-Ranchería, and Catatumbo. If these optimistic estimates materialize, it amounts to a century of natural gas reserves, a real game-changer in energy competitiveness.

How is Promigas working to promote and educate the markets about natural gas as a cleaner alternative to hydrocarbons?
Naturgas, Colombia's natural gas industry association, has done an outstanding job educating the public on the economic, environmental, and health benefits of natural gas: it is 50% cheaper than gasoline and 35% cheaper than diesel, and it has substantially lower CO2 emissions. Bogotá, Medellín, Cali, Barranquilla, Cartagena, Manizales, and Palmira have incorporated natural gas-powered vehicles into their mass transport systems, with 1,600 buses serving 1 million passengers daily at the end of 2019.

What is the growth potential of the LNG market in Colombia?
The LNG market growth potential both in Colombia and the hemisphere is significant. Colombia's Mining and Energy Planning Unit (UPME) has stated the need for a new LNG plant in Buenaventura on the Pacific Coast. This would require the construction of a natural gas pipeline connecting the coast to Yumbo, near the outskirts of Cali. It would require around USD700 million in investment and will begin operations in 2025. Promigas has considered participating.