Colombia’s natural gas transformation

Colombia

Luz Stella Murgas, president of Naturgas, talks to The Energy Year about the importance of onshore and offshore gas developments for Colombia. Naturgas is the Colombian association for natural gas, bringing together 29 public and private companies which represent 98% of the gas market across the gas value chain.

This interview is featured in The Energy Year Colombia 2025

How important are onshore and offshore gas developments for Colombia moving forward?
Colombia should prioritise the development of recent gas discoveries. In recent years we have had 15 discoveries in continental areas and also offshore, where the greatest potential reserves are located. The development of these discoveries must be a matter of national priority if the country is to maintain gas self-sufficiency.
We have been gas self-sufficient for more than 45 years thanks to major gasfields such as Cusiana, Cupiagua and Chuchupa. However, production from them is now declining, which means that new reserves must be incorporated.
Exploration has become essential to increase gas reserves in the country. From a public policy point of view, exploration activities should be encouraged to attract more investment in the sector and increase the number of wells being drilled to increase reserves. Our gas reserves have fallen to the point where our reserves-to-production ratio is now 6.1 years, and therein lies a great challenge.
We have plenty of onshore opportunities – mainly in the departments of Córdoba, Sucre, Atlántico, Piedemonte llanero, Meta, Casanare and Arauca. More investment is required in these areas.
Then, we have great potential in offshore natural gas. Offshore basins will be the ones that will allow us to regain gas self-sufficiency in the medium and long term. The potential we have discovered could supply 80% of the country’s total gas demand. Additionally, it will allow us to have surpluses for export.
Thanks to the versatility of natural gas via LNG, we have been able to connect supply to growing demand. Countries in the region are turning the Caribbean into the new energy hub. Developments in South America and North America are building towards connecting LNG demand with supply in countries that are betting on this source of energy.

Despite the growth of Colombia’s gas network, what challenges still remain in gas supply?
Colombia has a successful history with respect to gas coverage. Today we have more than 12 million users, which means that more than 36 million Colombians, 70% of the population, benefit from natural gas in their homes, businesses, industries and vehicles. However, we still have a challenge in rural areas. There are still 1.5 million families that cook with firewood.
From the point of view of reducing energy poverty, we have to provide them with a solution, and a low-emissions solution such as natural gas could reduce overall poverty in our country. In rural areas it will be difficult, as we do not have an extensive gas transportation system that allows us to take natural gas to these regions.
Moreover, extending a gas pipeline is a substantial investment, not to mention the environmental issues, prior consultations, rights of way and other elements that are required for the construction of new infrastructure.
Virtual pipelines are a solution until a certain point. With very long distances, they are no longer cost-efficient either for the user or for the business. This is where the development of biogas and biomethane could be a viable alternative.

What incentives are needed to support biogas and biomethane in Colombia?
We still do not have a clear roadmap in Colombia. When it comes to biogas potential, we have identified a number of landfills that have the potential to become biogas projects. There are 25 landfills that have this potential in Colombia.
However, we still have an issue of production-cost bottlenecks, which means that the cost of the molecule of biogas is still much higher than that of natural gas production. This means that we will need fiscal and economic incentives with respect to income tax, VAT on the import of machinery, local taxes with territorial authorities and so on to make it competitive. While these incentives exist for renewable energies and hydrogen, biogas does not yet have these.
Moreover, out of the 25 landfills, 11 could be ideal for attracting international cooperation. Among the projects that are already developed, one is in Bello near Medellín, where we mix natural gas and biomethane produced from the capture of biogas from the San Fernando wastewater treatment plant. This benefits 40,000 families.
There are already around 50 biomethane plants in Colombia. Most of them are for self-generation for the agricultural sector. With the inputs from pig or chicken manure, and also from the palm oil sector, biogas is produced. There is plenty of room for growth in this sector, but it needs further incentives.

How important will gas import schemes become in guaranteeing gas security in the country?
Despite the country being gas self-sufficient for 45 years, projections forecast that by 2025 or 2026, local gas production will not be enough to cover national demand. The government’s responsibility is to guarantee gas supply to Colombia’s population of 36 million at competitive prices. The mix between imported and local gas is going to be temporary until offshore projects hit first gas. Then, we will return to self-sufficiency for decades.
The only infrastructure we have for importing gas is SPEC LNG. That plant has been used exclusively to support electric power generation. However, SPEC LNG has additional capacity beyond what the thermal companies use. The regulation will allow us to use that additional capacity to cover the local gas gaps that we will have in the coming years.
Pacific LNG is another regasification terminal that has been discussed for the past years. We must determine how viable a project of this calibre would be, and how long it will take to be ready. For the southwest of the country, a project of this nature is necessary. There has been talks about another regasification plant in the Caribbean, in La Guajira. There are companies that are doing all the required analysis and evaluations.
Lastly, there is the option of importing gas from Venezuela. The issue is that gas supply from this neighbouring country is not certain. Whenever we have the authorisation from OFAC [the US Office of Foreign Assets Control], we will welcome gas from Venezuela because we need it.
Lastly, the Ecopetrol Group has announced it is evaluating other alternatives and external sources of gas, which include the construction of smaller regasification units and importing gas from the Permian asset in the US and further importation schemes.

In what ways is natural gas being implemented as a cleaner solution for mobility and transport?
In mobility, heavy loading is the segment with the highest growth projections. Currently there is no international offer from manufacturers of electric heavyweight vehicles over 10.5 tonnes. There is only diesel and gas. In Colombia we have more than 1,400 heavy-duty vehicles.
From the point of view of financing and costs, the national government and the industry have created financing mechanisms for small transporters, so that they can replace heavy-duty diesel-fuelled vehicles with natural gas vehicles.
For example, the government is giving scrapping bonuses for vehicles more than 10 years old. Owners are given COP 180 million [USD 41,850] to scrap their old vehicle and buy another one that runs on gas. The government also provides an interest-rate subsidy on loans for purchasing gas-powered heavy-duty vehicles.
From the industry side, we have created a fund that finances up to 75% of the acquisition cost of a vehicle for small transporters. 70% of heavy cargo in our country is moved by small transporters, while the remaining 30% is done by larger private companies that have their own fleet. This is why our focus is the small transporter, who typically does not have easy access to credit.
With these incentives, we hope that there will be a rapid substitution from diesel to gas. We entered the light-duty segment, which means less than 10.5-tonnes, in 2024, with 90 units that were purchased.
Apart from heavy loading, we are also focusing on public transportation, that is, buses. Bogotá is a success story. It has more than 2,200 TransMilenio and SITP buses running on gas. Medellín is catching up with 400 buses.
In addition to this, if we consider emissions, gas reduces fine particulate matter by almost 99% compared to traditional fuels and is very much on par with electric vehicles. In terms of carbon dioxide, gas mobility reduces CO2 emissions by 30-50%, depending on whether it is compared to diesel or gasoline. The transportation sector in Colombia emits 12% of the country’s greenhouse gases. By accelerating the use of gas in mobility, we can quickly decarbonise this sector.

How is Naturgas amplifying the transformative power of natural gas?
Naturgas is a guild that brings together 29 public and private companies, representing 98% of the gas market across the entire value chain – producers, distributors and retailers. We build bridges with the different actors in the sector to ultimately create solutions that will improve the quality of life of Colombians. We follow a higher purpose: to improve the quality of life of people through natural gas. It is a vehicle for reducing energy poverty.
Natural gas is also one of the main inputs, for example, in producing urea. Colombia imports 70% of its fertilisers from China, Russia and the United States. Of the 1.5 million tonnes of fertilisers imported, urea constitutes around 500,000 tonnes. If we develop the gas potential that we have, we can be self-sufficient in urea production and reduce the cost of food. Thus, natural gas could play a fundamental role in Colombia’s food security.
Another fundamental aspect of the transformative nature of natural gas is the impact it has on the environment and on public health. In many parts of the country, people still cook with firewood, which has a negative impact on air quality and causes respiratory diseases.
Environmentally, it also helps reduce emissions, which is one of the aims that we as a guild and the administration have. Across all sectors of the economy, people emit 279 million tonnes of net greenhouse gases annually. Of these, the natural gas industry emits 2.8 million. We have a feverish commitment to reducing leaks, eliminating venting and flaring, and carrying out energy efficiency projects, and we also have a commitment to fight against climate change.

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