The import of natural gas will take place using the Campo Amistad plant or via a barge that supplies Termogás Machala. Otherwise, there would be no generation of 130 MW, which would affect the country during the dry season (October to March 2023). This is explained by Gonzalo Uquillas, manager of Celec, who also explains that in the plan to combat the dry season, an executive order is expected to be signed this week so that Celec will be in charge of contracting energy production with fuel oil. He assures that it is not excluded that energy can be bought from Colombia, but at a trickle, that is, little energy and expensive.

Minister Santos said that they are still thinking about importing gas. What did the technician say and how is this process progressing?

It is true that the need exists, it is not a fad. You know that Termogás Machala has seven turbines: five are small for 20 megawatts each and can use diesel or gas. The other two of 65 MW (total 130 MW), which are industrial type and can only use gas, are not dual. To be able to use these two turbines I only have 15 million cubic feet at a cost of $3.49 per million BTU. I have 45 million feet to go before the two gas turbines are at full capacity. So, we have to choose between collapse if we don’t have that 130 MW in operation, or to bring in imported gas and have it for six months. Celec is the largest customer of gas because of Termogás Machal and because we want to convert the 100 MW Enrique García thermal plant into dual energy. When I put it all together, Celec’s gas demand could be 120 cubic feet per day. Now, as a client, I am consulting with Petroecuador and they told us that they are announcing a tender to find a strategic partner. But they show that in four or five years they will be able to have 60 million cubic meters.

Could this signal reduce interest in the Amistad tender?

It’s only six months, and it’s rather the other way around. This is a sign that we are a client who needs to subscribe to national gas for ten to fifteen years, instead of imported diesel.

How will this six month contract work?

There are two delivery options. The first option is an FSRU LNG carrier. If the studies of the expert hired by Celec, who worked at Machala Power and knows the plants, are confirmed, then it is possible. Now Petroecuador has to submit data on the Amistad field, the expert will immediately carry out an investigation and we hope to give the final criteria in 30 days.

What problem would there be according to Petroecuador, why don’t they recommend using the Amistad infrastructure?

The director of Petroecuador, Ramón Correa, is clear that we must have an independent opinion on gas. If the Petroecuador report is confirmed, then this option is ruled out. But if it eventually proves to be possible, Petroecuador will opt to import gas through this option of a ship that connects to the pipeline and supplies Termogás.

But do you know the arguments of Petroecuador that say it cannot be done?

There are various criteria, one seems a bit lyrical, as if wells are people. They say: “wells are jealous.” But the two technical problems that would arise are if there is a difference in humidity between the gas coming out of the wells and the gas coming from the ship, and then a difference in pressures.

Has it been said that the gas coming out of the well comes with impurities and the other is cleaner, does that have an effect?

This is what the technician must determine. But if that is ruled out, there is another alternative that Petroecuador is studying. It is an alternative to liquefied natural gas barges, but has the advantage of being located 7 kilometers offshore and delivering gas through a flexible hose. This is a solution that is available immediately, but it is more expensive than others.

What would be the price we should pay for this gas?

The price of gas in the first option with the FSRU ship would be four or five times more expensive than that bought from Petroecuador, or $15 or $16 per million BTU. If it had a long-term cost, it would be better. Diesel would be more expensive, $23 or $24 per million BTU.

What happens if the technician says that it is not possible to use Amistad’s facilities?

If the technician says no, there is option 2, which is to hire a barge with a flexible hose, which would be more expensive than the Campo Amistad option, but cheaper than diesel and of course better than no electricity.

When would they announce tenders?

The idea is that this gas should be available in November this year. It will be a six-month contract, and will be implemented by International Trade Director Reynaldo Armijos and General Manager Ramón Correa of ​​Petroecuador.

But they are also designed for fuel oil, what is this topic?

Last week we were at the Presidency and the need to guarantee an additional 300 MW was confirmed, and if we didn’t do that, we would be operating a system with zero reserve. If an unforeseen situation occurs, there will be restrictions. It must be thermoelectric production with running engines fuel oil, and it cannot run on gas or diesel. For this reason, Celec will conduct another international, transparent tender, although the contract would be signed by those who receive the energy, i.e. the distributors. We believe that this can be negotiated in mid-December, two solutions are possible: propulsion ships or containers on land. The route plan will have a decree signed by the President of the Republic, Guillermo Lasso. Celec would conduct the tender for the supply of electricity of 300 MW for one year, with the possibility of extension or renewal. I believe it will take five years, since the Santiago and Cardenillo hydroelectric plants will be installed in five years, and the demand is increasing by 10% every year. They would be located near Pascuales, Exclusas, Trinitaria and Salitral. This alternative costs $200 million. The idea is that the tender will be launched at the end of the month, there have already been offers from some companies. It would be signed in October, and it would be signed by mid-December.

But there is also a need to improve the thermal park. Has there been any progress?

There are two important issues to be seen: one is generation, which is fundamental, but also the issue of transmission that must be resolved, especially in Guayaquil, Machala, Durán and Cuenca. Demand growth between last year and this year is 10%. In addition to the consumption of people and companies, there is also a need for electrification of the shrimp, mining and electromobility sectors. A national policy must be made so that future governments can implement it. Therefore, it is necessary to see how the transformers in these cities have become saturated. For example, we moved a 225 MW transformer from Quevedo to Durán. In the case of the Cuenca substation, a new 150 MW transformer was installed. This will be ready for the festivities in Cuenca. In addition, we have overcome another problem, since this limitation prevented Delsintanisagua from producing its full capacity. There are many other initiatives in streaming. In the production part, the expectation of imports from Colombia is not excluded, but there will be smaller and very expensive quantities.

But Minister Santos said that this is not possible, that President Gustavo Petro has denied the possibility. What is the same situation?

We must remember that the Colombian market is different from the Ecuadorian one, in this market the agents are private, if they have a surplus, they will be interested in selling to us.

But then, wasn’t it necessary to talk to Peter?

In terms of politics, in the previous dry season, the then deputy minister made a political move on behalf of the minister and allowed instead of 240 MW to import 450 MW, thanks to the lifting of restrictions on the highway that enables this exchange. These efforts are never superfluous, regardless of the fact that we are dealing with governments of a completely different nature.

How much more will the thermal park generate?

We can see the recovery of the thermal power park, as we invest 309 million dollars in spare parts, inputs and infrastructure of the new generation. Various maintenances have been completed. But we must highlight the recovery of Termoesmeraldas 1 which was unavailable since last year. This process is already 50% complete and should end on October 15th. We were able to complete the purchase of 54 MW for the Quevedo plant. Half of Quevedo was occupied by ITT and Cuyabeno. 32 engines are being purchased fuel oil of 54 new megawatts. It will be in the first quarter of 2024, but it is expected to arrive in December. This costs $65 million.