Three problems threaten the national natural gas market in the short term, and are coming together for the imminent import of this energy source. The reversal of Campo Amistad, which will now pass from the hands of Petroecuador to the Ministry of Energy, postpones the eventual tender for the gas field, and thus the national gas production, to July or August. Also, as announced by the Minister of Energy Fernando Santos, there is also jeopardizing the operation of the Bajo Alto liquefaction plant which receives gas from Amistad and supplies gas to companies. Finally, the tendering process for gas extraction from the lighter was declared invalid, which also delays the use of supporting gas.

All this amidst the statements of Minister Santos to the effect that the dry season at the end of 2023 could be much more intense than the one at the end of 2022.with the complication that now Colombia would not be able to sell energy to Ecuador.

A few days ago, Santos said that it was decided to ask Petroecuador to return Campo Amistad to the Ministry of Energy, and that once it is in the hands of the Ministry, a tender will be announced under the modality of the Participation Agreement, both for the block that is now in production and surrounding area, to explore. He even indicated that a deposit was recently discovered on the northern border of Peru, which suggests that there are good opportunities for larger reserves on the Ecuadorian side.

However, the issue cannot be implemented immediately, as the minister himself offered at the beginning of the mandate (he said he would get it in 2022), because there are certain environmental problems. In any case, he said that there is already an agreement between Petroecuador, the Ministry of Energy and the Ministry of Environmental Protection, which will last “until August at the most”.

This new plan, it supersedes the initiative that already existed on January 11, when the Petroecuador Contracts Committee, of which Petroecuador’s current director, Ramón Correa, was also a member, had already recommended a tender for Block 6 of Campo Amistad, under the specific services contract modality, by Petroecuador. At the time, there was talk of a reference budget of $691.48 million, billable with the payment of royalties.

On the other hand, the Government will have to decide what to do against the dry season already in September this year. Santos ruled out importing diesel, which has very high prices, in drought conditions (which affects hydroelectric power generation), but left the door open to importing gas, which is cheaper than diesel but more expensive than national gas. “Measures must be taken because the next dry season will be much harsher. If gas can be imported, it will have to be imported,” he commented. He also said it will be evaluated for use fuel oil or crude oil to start thermal power plants and guarantee electricity production.

On that topic, J.orge Luis Hidalgo, energy expert and manager of GreenPower, regrets that in recent years fuel imports have been prioritized instead of promoting the national industry. Concrete proof, he says, is that Santos announces that it is necessary to urgently import natural gas for thermal power plants. Now Celec is desperately proposing that solutions be presented and that in the short term (October 2023) at least 45 million cubic feet per day is required for the Machala thermal gas, just for the six months of the dry season. Well, the forecast is that this dry season will be one of the strongest in the last fifteen years in the country.

“I see authorities traveling the world to find solutions while they’re actually in the house,” he says. Remember that in 2019, the then Petroamazonas presented to President Lenín Moreno a plan to increase gas production in Campo Amistad in a short period of time with works you work too much and maintenance, which could be done urgently in a maximum of two months. This report was prepared by Petroamazonas and sent by María Elisa Soledispa with a copy to Fernando Santos Alvite, who was an adviser to Minister René Ortiz, he says. Now, Hidalgo sees fit to ask Petroecuador’s manager, Ramón Correa, why there has been a delay in tendering for Campo Amistad when he himself signed the minutes of Petroecuador’s Contracts Committee Extraordinary Session 003-2023 on January 12, 2023 concluding and recommending tendering tender for Campo Amistad.

For Hidalgo, it is important that citizens know that all these delays threaten the supply of electricity in the country, that there is a blackout, or that we pay two or four times more as a country for expensive electricity in the making. It also affects the environment, endangering the health of communities living near the lighters and affecting the economy, he says.

He regrets that the government did not invest in national energy security. “The result is that in 2022 we managed to import a historic figure of $7.646 million in fuel, and in the first quarter of 2023, for the first time in history, fuel imports exceeded crude oil exports.”

In the meantime, even gas imports do not have the necessary sustainability, but “technicians are already analyzing what to do to overcome the problems,” Minister Santos said. The Secretary of State said on this issue that, for example, the use of the gas pipeline owned by Campo Amistad, which would be used in possible import contracts, is intended for compressed natural gas, not for liquefied natural gas, which could be important.

Additionally, In a few weeks, the position of the Agency for Regulation and Control of Energy (ARK), which is reviewing the condition of Bajo Alto, should be known. Although the minister initially said that it would be closed because it was a kind of time bomb, he later said that the fuel supply was guaranteed and that it would not be closed for the time being.

About the topic, Luis Jaramillo Pita, from the natural gas import company Sycar, believes that the news about the problems in Bajo Alto confirms “the great need for an LNG import terminal” and that import is a good option. because of the savings that can be made compared to diesel. “An option for industrialists faced with continued Bajo Alta LNG supply problems is imported diesel and LPG, both of which are more expensive than imported LNG.” He also said on social media that if Ecuador needs gas for the next five years, it must import it. In this way, savings would be achieved by replacing it with diesel, and at the same time domestic natural gas must be developed, so imported natural gas will supplement domestic natural gas. For Jaramillo, the best ally of the gasification plan for the energy matrix and the development of the national gas industry is imports, which will complement national production.