Infrastructure focus of the Colombian Government for end of 2021 and 2022

In the opening of the infrastructure project of the Crossing of the Central Mountain Range, the Government has brought forward the advancements in the assignation of 4G infrastructure projects, three of them already delivered and a general advance for these projects of up to 60%.

Regarding some of the upcoming projects to be terminated and delivered, the Government has exposed its determination in advancing with 4G projects for the termination of their governmental term with 20 projects terminated. 

The actual Government has focused on multimodal transportation projects, looking forward to grant concessions for the 5G. Among these projects are 7 vial, 4 airports, 2 fluvial and one 1 railway, which have an investment for construction of COP$21.8 billion, that it is estimate that will generate up to 600.000 jobs. 

The National Roads Institute (INVIAS) has stablished the program “Vías para la legalidad” which consist on 22 strategic projects that, for their technical characteristics will be terminated in the next 5 to 10 years. After this program, the “Concluir, concluir” strategy will be upfront to develop and terminate 28 projects in key roads of the country. 

Apart from this, the XVII National Infrastructure Congress concluded that the infrastructure of the country must be focused in being kept as a public policy to promote benefits over the country and its citizens, as well, to bear in mind that the advance over projects that promote the connectivity and multimodalism should be part of the key mid and log term objectives for the Government and the private sector in the public-private associations (APP).

Finally, over this congress the Government announced a Guide for Investment on Infrastructure in Colombia, document drafted between the Transportation Ministry, ProColombia, the CCI and the consulting firm EY, which states the general overview of the country, its actual and future projects and mechanisms for foreign investors. 

USD$2.900 million to improve the natural gas infrastructure over the country

Over USD$2.900 million destined to 127 projects of which USD$1.162 million are destined to exploitation and production and USD$1.688 million for transportation and distribution. 

The investments to be made will mean that the country will pass from 3 tera cubic feet of proven reserves, available for 7.7 years, to near to 60 tera cubic feet of proven reserves, which assure self-sufficiency for the next 100 years. These projections are matched with the fact that Colombia has proven over the last 20 years of development over the sector, to be a global referral in the integration of natural gas and its usage for the development of economic activities.

In addition to this important development, ECOPETROL has invested USD$1.300 million up to 2023 to develop a production and distribution potential of up to 50 tera cubic feet in projects over the oriental plains, the Colombian Caribbean sea, Permian (EEUU), Brazil, and in Integral Investigation Pilot Projects (PPII) over non-conventional deposits. 

For transportation, there are 7 highlighted projects for supply over all the territory, being incorporated in the Natural Gas Supply Plan (PAGN) structured by the Mines and Energy Ministry and the Mining and Energy Planning Unit (Upme), which pretend to backup the supply of the fuel for the next 10 years.

COP26 conclusions and compromises in Oil & Gas sector

Starting for the COP 26, it has been a very active month for the oil & gas industry. Let’s discuss the main conclusions of COP26: (i) 20 nations, announced an end to public funding for international fossil fuel projects and to prioritize clean energy finance; that may restrict investments in drilling, power plants and other projects by international development banks and other publicly funded institutions in this sector; (ii) 23 countries committed to phase out coal power in the 2030s (for OECD countries) and in the 2040s (for non-OECD); (iii) 30 nations pledged to gradually dispose of gasoline and diesel vehicles by 2035 to 2040; and (iv) participants reached agreement on the implementation of Article 6, which could provide a framework for an international carbon trading scheme.

On the other hand, and referring to demand and production forecasts, we highlight the International Energy Agency (IEA) maintained its demand estimates for 2021 and 2022 flat at 96.5 MMbbl/day and 99.8 MMbbl/day, respectively, based on the projection that rising gasoline demand and increased international travel will be offset by resurgent COVID in Europe and US. 

Instead, OPEC+ lowered its 2021 demand estimate slightly, to 97.7 MMbbl/day due to slower anticipated demand growth in China and India in the third quarter of this year. OPEC maintained their demand estimate for 2022 at 100.6 MMbbl/day.