A new project to increase LPG shipments into Colombia looks set to boost VLGC demand.
Toronto-listed Frontera Energy and Chile’s Empresas Gasco are teaming up to establish a new import and storage facility at the port of Puerto Bahia’s “state-of-the-art” liquids and dry cargo terminal, located in the Bay of Cartagena.
The companies will handle the construction and operation of the project, which is expected to be in service by 2027.
According to Colombia’s Mining and Energy Planning Unit, the country consumes 700,000 tonnes of LPG annually and will require 1m tonnes by 2031.
“It is estimated that under the base-case scenario, approximately 160,000 tonnes per year of the entire Colombian market could be imported and supplied through this new facility,” the companies said.
This will increase annually to 340,000 tonnes per year by 2030 and beyond, they believe.
Once constructed, the facility will accommodate two VLGCs per month.
A 20,400-tonne refrigerated storage facility will be built at Puerto Bahia.
The estimated cost of the project is between $50m and $60m, shared between Frontera unit Sociedad Portuaria Puerto Bahia and Gasco. A joint venture will be set up for the work.
Frontera chief executive Orlando Cabrales said the companies will capitalise “on increasing LPG supply deficits in the Colombian market at a time when the LPG market is expected to grow at 4% per year”.
“These supply deficits present a unique opportunity for Puerto Bahia, in partnership with Gasco, to become the strategic destination for Colombian LPG imports,” he added.
The aim is to be Colombia’s lowest-cost importer, generating total Ebitda of between $10m and $15m each year at full capacity.
The partners described the collaboration as a “significant step forward in meeting Colombia’s growing energy needs and demonstrates the commitment of Puerto Bahia and Gasco to investing in the country’s energy infrastructure.”
The terminal already exports and imports crude and refined oil cargoes for Frontera.
