Canadian oil firm Pacific Rubiales (TSX: PRE) will develop Colombia's first LNG export project on the country's Caribbean coast with the intention of tendering cargoes on the spot market as early as next year, according to the firm's senior vice president Eduardo Lima.
"We are looking to the spot market, as it will be much easier to sell the fuel. It is possible that in the next year we could sign a deal with a buyer," Lima said on the sidelines of the 6th BNamericas Andean Energy Summit in Bogotá.
"We have already started negotiations with some of the players, companies such as GDF Suez and BP who could be interested in buying our cargoes on the spot market. We are thinking of organizing a tender to sell the LNG; 10, 12 cargoes at the same time, maybe as early as next year."
The firm has previously talked of selling gas exports from the terminal, expected online by the end of 2014, directly to buyers in the Caribbean and Central America under fixed term contracts, however, a lack of demand and regulations have led the company to head towards the spot market, Lima added.
"The region offers potential clients primarily in the form of thermoelectric generators, and we have had conversations with at least 20 companies which have all shown interest. However, they all have to secure supply contracts for the long term, to secure financing for the purchases," he said.
"Also in these countries there are no regulations for the gas market. Governments need to provide regulations and permits for gas imports."
The Toronto-based firm announced plans in May 2011 to begin small-scale LNG exports to the Caribbean from the La Creciente gas field on the SSJN-7 license in Colombia, with an original start date of end-2012.
The firm has signed an agreement with Belgian gas exporter Exmar, where the latter will build, operate and maintain the floating liquefaction regasification and storage unit for the project, located on the Caribbean coast.
Under the agreement, Pacific Rubiales will have exclusive rights to supply and liquefy up to 69.5Mf3/d (1.97Mm3/d) over a 15-year period. Gas will be provided from La Creciente via an 88km pipeline with initial capacity of 100Mf3/d.
Pacific has also spoken about constructing a separate LNG terminal at the Puerto Bahia crude export facility being developed in Cartagena by subsidiary Pacific Infrastructure.
Plans envisage a small capacity regasification plant, which can be used by third parties to bring in emergency shipments during times of peak demand, Lima added.
"We are suggesting a regasification plant with limited storage space, which can be used to bring in imports during periods of high demand for thermo electric generators such as during El Niño."
The US$600mn Puerto Bahia project is also expected online towards the end of 2014.
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(Originally published July 12, 2012, by Business News Americas.)