Sycar LLC, with permission to import 1.825 million cubic feet of natural gas per year for Ecuador

Nelson Jaramillo Pita, legal representative of the US Sycar LLC, confirmed that on October 14, the Ministry approved an import permit for liquefied natural gas and compressed natural gas for 1,825 million cubic feet per year for his company. The permit is valid for five years.

This volume, according to Jaramillo Pita, is equivalent to 5 million cubic feet per day, which is still a small volume when compared to the 25 million cubic feet that Campo Amistad produces locally. It ensures that your goal is for this initial approved volume to continue to increase as the market continues to grow.

However, to start the process of importing and marketing natural gas, have yet to obtain the registration of the isocontainers (for liquefied gas) and tube trailers (for compressed gas) which are the vehicles that will allow them to distribute the gas in the interior of the country. Currently They have two isocontainers that are located in Guayaquil and five more are in Panama and available to operate in the country. They also plan to have seven tube trailers more in the future.

According to Jaramillo Pita, each of the isotanks can carry up to 1 million cubic meters of gas. According to the executive, the isocontainers and tube trailers they are the most efficient methods for transporting this fuel when there are no internal distribution networks.

Jaramillo Pita explains that Sycar LLC was previously approved as a gas marketer, which indicates that they can commercialize national or imported gas. Then they are about to start the import.

Nevertheless, He said that at the same time they seek to commercialize national gas. The latter based on an agreement it has with the oil company Pacifpetrol. This project would become a reality if the Ministry of Energy gave the permission to commercialize the surplus gas that comes out of that operation, since at the moment Pacifpetrol is only authorized, as an oil company, to self-consume a part of that gas for electricity generation and vehicular transport.

On the other hand, when asked whether it has already identified the potential customers who would buy the natural gas they will sell, Jaramillo Pita expressed that he still does not have firm sales contracts, but he is sure that the market is highly demanding, since natural gas is a cheaper fuel than LPG and diesel, and much less polluting.

This approval brings back to the table Debate is the apparent willingness of governments to prioritize imports before national production of natural gas. About the topic, Jorge Luis Hidalgo, manager of GreenPower, company that seeks to promote the industrialization of local natural gas, He affirmed that they are pleased that new players are joining the development of the natural gas market and stressed that their commitment is to national production. He clarified that they are not opposed to the importation, but asks that they be allowed to compete on equal terms. “We have been struck by the fact that a process subsequent to ours already has authorizations such as the importation of gas. The message seems to be to prioritize imports versus national production, without taking into account what is happening in the United Kingdom and Europe by not promoting energy security and transition to renewable energy policies with the valuable concept of flexibility ”.

The GreenPower project was presented in August 2018, but so far they have not gotten a concrete response. Thus, the Minister of Production, Foreign Trade and Investments (Mipro), Julio José Prado, asked the minister Juan Carlos Bermeo, in a letter of October 19 In the past that “it serves to interpose its good offices and carry out the steps that are in the scope of its competences, to make this private investment in Ecuador viable as soon as possible, and in this sense it requested that it provide an official response regarding of this particular to the company GreenPower International.

From what is known, this project, on the other hand, consists of building the liquefaction plant that would represent an investment of $ 25 million and would be fueled with natural gas from the Amistad field. The company considers that at the moment this field could allocate part of its production to its project, since it is currently sending forcibly a percentage of gas to the Termomachala.

In addition, he said that if initiatives such as Canacol’s that want to manage the field to increase production are welcomed, there will be even greater possibilities of industrializing local gas. They have also mentioned that there are 2 million cubic feet that are burned daily in a lighter in Bajo Alto and that it could serve to change the transportation system in El Oro.

In the letter, Minister Prado reports that the manager of GreenPower has reported that according to technical reports from the Ministry, the company complies with all the requirements established in the Law, therefore, there were no arguments why the process had not continued.

Meanwhile, Jaramillo Pita clarified that from his perspective they are not competing with the national gas industry, but against the import of diesel and LPG, which are much more expensive. He explained that the price comparison can be done in millions of BTUs (measure of energy). In this regard, he said that a million BTUs of diesel cost $ 21; LPG reaches $ 17, while one million BTUs of natural gas could be $ 9. (I)