Prodata Energy will be in charge of supplying Venezuelan natural gas to northern Colombia. What is the business like and who will be in charge of it?
LatinAmerican Post | Santiago Gómez Hernández
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Bloomberg recently announced that the Venezuelan company Prodata Energy will be in charge of supplying gas to Colombia. Because Colombian President Gustavo Petro plans to halt oil, gas, and coal exploration in the coffee-growing country, experts warn that future energy dependency will fall on its eastern neighbor. This is why the mentioned company seems to have a future to start supplying this country.
But, what is this company about, to which Colombia will give an important relevance at the moment of its energy independence?
If the information revealed by Bloomberg is confirmed, Prodata would be the first Venezuelan private company to export natural gas to Colombia. Now with the endorsement of the Venezuelan president, this Caracas-based company will be able to supply gas to an essential section of Colombia.
Prodata Energy was born in 1971 as Production Data Acquisition Wire Line in Venezuela. This focuses on the exploitation and commercialization of non-renewable clean energy and renewable energy. Despite the fact that Prodata Energy has wind, solar and hydrogen energy projects, focused on the reactivation of the Paraguaná Wind Farm, it is simply focused on supplying the Venezuelan internal market.
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The Venezuelan company already has experience in sending natural gas abroad. Prodata ships containerized liquefied natural gas to the Caribbean Islands.
What Is Known About the Contract?
As reported by the US media, Bloomberg in its Spanish version, the Venezuelan company will be in charge of supplying 25 million cubic feet of gas per day for 30 years.
How Will Prodata Send the Gas to Colombia?
The answer is simple: Prodata will use the Antonio Ricaurte Binacional gas pipeline. This project began in 2002 with the endorsement of Presidents Álvaro Uribe Vélez and Hugo Chávez of Colombia and Venezuela, respectively. But work on the play began only 4 years later. The construction only took a little more than 1 year and had an approximate cost of 335 million dollars.
The Antonio Ricaurte Trans-Caribbean Gas Pipeline is owned by Pedevesa and has an extension of 225 kilometers. It joins Punta Ballenas in the department of La Guajira (northeastern Colombia) with the eastern shore of Lake Maracaibo in Venezuela. It was planned to transport the gas from Colombia to Venezuela.
Initially, the pipeline supplied Colombian gas to Venezuela, while the Caribbean country began offshore projects. It was thought that, later, the flow would be reversed, Venezuela being one of the countries with the largest gas reserves in the world. However, since 2015, the supply through the tube was cancelled, due to diplomatic problems between both nations . Added to this are the sanctions imposed by the United States (during the Donald Trump administration) on Venezuela and Pedevesa, the Venezuelan state oil company.
From the Colombian sides, there is a lot of skepticism with the contract that Gustavo Petro would intend to sign or signed. People in the mining-energy sector warn that the gas pipeline is deteriorated due to little use in recent years and lack of care. Former Colombian Finance Minister Mauricio Cárdenas told Petroguía, at the most recent Oil, Gas, and Energy Summit in Bogotá, that "The problem now is that the gas pipeline has deteriorated because it has not been used for many years, equipment has been stolen, valves and segments of the pipe and that is why the first thing that must be done is to recover the pipeline, but that costs hundreds of millions of dollars”.
Similarly, various voices in Colombian public opinion warn that the Andean country cannot depend exclusively on Venezuelan supplies. The energy crisis that Europe is facing today due to the war between Russia and Ukraine shows that self-sufficiency and energy sovereignty cannot be put at risk. Additionally, the most recent diplomatic tensions between Venezuela and Colombia support these concerns.
Likewise, the president of Ecopetrol (the Colombian state oil company), Felipe Bayón, warned that, currently, the price of gas in Colombia is lower than what can be reached from Venezuela. According to the official, the average Colombian pays less than 10 dollars a month for natural gas, and that this value could be 5 times higher for imported gas.
This announcement by Bayón is accompanied by recent discoveries of natural gas reserves in Colombia. According to the president of Ecopetrol, Colombia would have enough natural gas to accompany an energy transition. It is estimated that the average production of gas marketed in the coffee country was 1,087 million cubic feet per day. This would indicate that Colombia does not seek to depend on Venezuelan gas, which would only be 25 million cubic feet per day. What is sought is to improve and guarantee energy reliability in Colombia, plans that already came from the governments of Uribe and Santos in Colombia and from Chavez in Venezuela.