Colombia makes biggest gas find in history amid critical energy juncture [Global Gas Perspectives]
Brazil’s Petrobras and Colombia’s Ecopetrol confirmed the largest natural gas discovery in Colombia's history on December 5, with the drilling of the Sirius-2 well. The find could have far-reaching implications for Colombia’s energy landscape, but it will take years to develop the resource, and in the meantime, the country is likely to continue to increase its reliance on imports.
Sirius is located in the GUA-OFF-0 offshore block, in 830 metres of water depth. Drilling began on June 19, with Petrobras acting as the operator of the consortium holding a 44.44% stake, while Ecopetrol holds the remaining 55.56%. Located 77 km off the coast of Santa Marta in the northern Magdalena department, the discovery has confirmed gas volumes exceeding 6 trillion ft3 in place, according to Petrobras. In comparison, Colombia's existing natural gas reserves currently stand at 2.81 trillion ft3.
Dwindling gas supply
The discovery comes at a critical juncture for Colombia. The country has been grappling with declining natural gas production and a growing demand for energy. As of 2022, Colombia's natural gas reserves were projected to last just 7.2 years at current consumption rates. The confirmation of significant gas volumes at the Sirius-2 site could extend this horizon substantially, providing a much-needed buffer for the country's energy security.
Currently, Colombia generates the bulk of its electricity at hydropower dams, which produced 64.4% of the country’s total power last year. Though hydroelectricity is low-cost and often in ample supply, this heavy reliance also puts Colombia at risk of energy shortages during periods of droughts, as were seen earlier this year.
While natural gas only generated 17.8% of Colombia’s electricity last year, it plays an important role in balancing the system during periods when hydropower output is hampered. Without gas, Colombia would have to fall back more on use of coal and oil, which generated 10.8% and 3.2% of its 2023 power respectively. Gas also helps support the country’s industry.
For the time being, Colombia’s gas production typically still exceeds its demand, with Rystad Energy estimating in February that the country consumed 960mn ft3/d of gas over the past six years, versus a domestic output of 1.05bn ft3/d. But as reserves dwindle further, Colombia has increasingly resorted to LNG imports, but this option is not without risks. In May 2023, fluctuating subterranean temperatures in a volcanic area disrupted LNG imports, putting national energy security at risk. Compared with domestic supply, LNG is generally more costlier, and increased reliance puts Colombia more at the mercy of volatile international prices.
No impact overnight
While the discovery has the potential to ensure Colombia’s long-term gas needs are met, and potentially even leave some volumes spare for export, its contribution to supply will not appear overnight. Petrobras said it expected production to start in 2027, but that depends on whether commercial viability is confirmed. It anticipates an output of approximately 13mn m3/d (459mn m3/d) of gas over a 10-year period.
The consortium first plans to spend $1.2bn on an exploration phase, and a further $2.9bn for the production phase. These investments have been incorporated into Petrobras's 2025-2029 business plan. Its developers envisage a “subsea to shore” design that would involve drilling four production wells and then piping the gas that is recovered to shore for treatment. They said they would collect metocean data and merge it with environmental information, bathymetry and geotechnical and geophysical information, to plan this infrastructure.
The project has notably faced some legal challenges. In September, a Colombian court temporarily suspended operations at the Sirius-2 site owing to concerns over insufficient consultation with local Indigenous groups. The suspension was overturned in October, allowing work to resume. It is possible that similar legal disputes might arise in the future, potentially causing delays to the project.
In the meantime, Colombia will have to rely on increased LNG to fulfil demand, by increasing utilisation at the existing SPEC LNG facility in Cartagena. The import terminal is currently capable of bringing ashore 400mn ft3/d of gas, and its majority shareholder Promigas is looking to raise capacity by a further 130mn ft3/d by the end of 2026. Colombia is also looking to establish another 400-mn ft3/d regasification facility, Pacific LNG, but progress has been held up by issues with infrastructure and logistics.
There are also plans to import up to 25mn ft3/d of gas from Venezuela via the Antonio Ricaurte pipeline, but this will require substantial investments. Rystad estimates that the transport cost for this gas would be only a third of that of imported US LNG. However, there are also now greater obvious political obstacles to importing Venezuelan gas, following the country’s disputed presidential election in July, as well as the reelection in the US of Donald Trump, whose first administration vehemently opposed Venezuela’s Maduro regime.
At odds with transition away from fossil fuels
The development of Sirius would stand in stark contrast to Colombia’s intent to transition away from fossil fuels. The government declared a cessation of new oil and gas exploration contracts last year in an attempt to accelerate this transition, although Ecopetrol and fellow state-owned producer Parex have taken advantage of existing contracts to further explore and delineate previously discovered volumes.
In general, Colombia has struggled to shift away from oil, gas and coal. While the country boasts a significant pipeline of solar power projects, totalling almost 10 GW of capacity, output remains very modest. As long as gas is needed to support energy demand, Colombia would do well to fulfil as much of that need with domestic supply as possible, and Sirius offers a significant opportunity to do just that.
Not only could the discovery’s development enhance Colombia’s energy security, it would also reduce import costs and create other economic gains including employment. It could also support rather than hinder the country’s energy transition, by providing more gas to support more stable power generation and phase out the use of dirtier fuels faster.