The gas sales contract between Canacol Energy and EPM is no longer valid

These are the three reasons that he exposed Canacol energy for suspend the contract: the legal, social and security conditions, the dynamics within the Colombian gas market, and the company’s decision to invest in its natural gas exploration programs in the Middle Magdalena Valley Basin and in Bolivia.

The project was still inside the process of obtaining of the environmental permit for the construction of the gas pipeline, which aimed to deliver contracted gas from the company’s Jobo processing plant to the city of Medellín, at the time the end of the contract was announced.

This process would end in July 2023. While this delay in itself was not sufficient to jeopardize the timely execution of the project or the gas sales contract, “is part of a pattern of increasing legal, social and security barriers that have emerged in recent months and which have led Canacol Energy to re-evaluate the likely future and the priority assigned to this initiative,” the company reported.

The decision will result in Canacol Energy reducing capital expenditure in the Lower Magdalena Valley Basin from 2024, as the volumes to be shipped to Medellín will no longer be needed for twelve years from December 2024.

As a second measure, Canacol Energy will invest future capital in the Valley Basin to target full use of existing transportation infrastructure. It will also drill the powerful Pola 1 gas exploration well in the Middle Magdalena Valley Basin in the second quarter of 2024, under the Exploration and Production Contract managed with 100% participation of Canacol and which, if successful, will be launched domestically market could be introduced. market (Bogotá, Medellín and Cali) through the existing gas pipeline of the Transportadora de Gas Internacional (“TGI”), 10 kilometers east of the Pola site, and use the excess capital resulting from a reduced capital program in the VIM to debt.

Source: El heraldo