Mitsui to Supply Colombia Its First Liquefied Natural Gas Cargo
Mitsui & Co. has been chosen to deliver Colombia’s first cargo of liquefied natural gas later this year as the country prepares to place a floating import terminal into service, according to the terminal’s developer.
Mitsui will send the cargo to the gas storage complex that Sociedad Portuaria El Cayao SA ESP, owned in part by Colombia gas provider Promigas, is completing off Colombia’s northern coast, Jose Montes, the developer’s chief executive officer, said in a telephone interview Friday. The site is scheduled to start commissioning in late September or early October and is expected to be fully operating by November, he said.
Colombia is emerging as a potential bright spot for liquefied gas producers who’ve been battered in the past two years by weakening demand and a ballooning global supply glut. Countries including Australia have boosted exports, and the U.S. has been sending cargoes of shale gas abroad since February. For Colombia, LNG imports represent a new supply of feedstock for gas-fired power generators that the country relies on to make up for shortfalls in hydropower resources, Montes said.
“It’s good for everybody,” he said. “In the end, we’re going to be a new player and we are actually going to take a piece of that surplus that the LNG suppliers have right now.”
Mitsui’s corporate communications team wasn’t immediately available for comment on the first cargo.
The Hoegh Grace import terminal at Cartagena will be capable of unloading LNG from tankers and turning it back into gas at a rate of 400 million standard cubic feet a day, Montes said. How many cargoes the complex receives will ultimately be up to the country’s power generators, he said, estimating that it could bring in six to 12 tankers a year. The fuel is destined for Grupo Termico, a consortium of Colombian power generators.
With LNG export terminals being developed in the Gulf of Mexico and Cheniere Energy Inc. now sending shipments from its Sabine Pass complex in Louisiana, Montes said he expects that future cargoes to Colombia will come from the U.S. or Trinidad.
“In the end, many traders, many companies, have positions in different terminals around the world,” he said. “But we expect that the cargoes mainly will come from the United States, from the Gulf of Mexico, given the prices at Henry Hub and the distance.”
Montes said 12 companies bid to supply the first LNG cargo to the terminal through a process run by Poten & Partners. White & Case served as legal adviser. He declined to identify the companies that submitted offers.