Canacol Energy Ltd. (TSX: CNE; OTCQX: CNNEF; BVC:CNEC) has commenced the production and sale of liquified natural gas (“LNG”), the first such operation in Colombia. Canacol Energy is also in negotiation with Galileo Technologies to form a joint venture which will install terminals at other locations in Colombia and supply end user solutions with the objective to replace diesel, fuel oil, compressed natural gas, propane and other fuels with LNG. Canacol claims LNG is a cleaner, cheaper, and safer solution that combines both lower cost with lower emissions of pollutants.
A significant portion of Colombia’s propane is imported from the United States
Charle Gamba, President and CEO of Canacol Energy, commented: “Given the limited capacity of the gas pipeline infrastructure in Colombia, industrial, commercial, and residential consumers not located along existing pipeline routes currently use 145 MMscfpd (Millions of Cubic Feet of Gas Per Day) of compressed natural gas and propane that is transported long distances via truck as an energy source. LNG can replace diesel, fuel oil, compressed gas, propane, and other fuels at a considerable reduction in price given the relatively lower cost of natural gas and the large volume of liquified gas that can be transported by truck. Compressed natural gas for example costs three times more to transport than LNG, resulting in the potential for significant cost savings for consumers who switch to LNG. With our joint venture partners Galileo providing the technology, our objective is to build other liquefaction terminals at other strategic sites in Colombia with the goal of replacing the use of diesel, fuel oil, compressed natural gas, propane, and other fuels with LNG at both lower cost to consumers and lower emission of pollutants.”
During the course of 2019 Canacol Energy installed four natural gas liquefaction modules purchased from Galileo at its main gas processing facility located at Jobó, Cordoba. The modules are capable of converting 2.4 million standard cubic feet per day (“MMscfpd”) of gas into 29,000 gallons of LNG. This LNG is being sold to a third party at the plant gate for distribution via trucks to their clients in Antioquia and Santander as far as 800 kilometers from Jobo.
65 MMscfpd of compressed natural gas and 80 MMscfpd of propane are currently consumed in Colombia, with a significant amount of the propane being imported from the United States. The objective of the joint venture with Galileo is to install terminals in other parts of Colombia close to gas pipelines where Canacol can physically ship or swap its gas to be liquified, with the goal of replacing diesel, fuel oil, compressed natural gas, propane, and other fuels with lower cost and lower emission LNG.
Canacol wins three new gas exploration blocks
The company also announced that it won three new conventional gas exploration blocks in the recent bid round administered by Colombia’s Agencia Nacional de Hydrocarburos (ANH). Under its wholly owned subsidiary CNE Oil & Gas S.A.S., Canacol was awarded conventional exploration contract VIM 33 (155,310 acres, 62,852 hectares) in the Lower Magdalena Valley basin, and conventional exploration contracts VMM 45 (12,422 acres, 5,027 hectares) and VMM 49 (148,244 acres, 59,992 hectares) in the Middle Magdalena Valley basin. On a net acreage basis, these conventional exploration contracts increase Canacol’s land position for conventional natural gas in Colombia by 29 % from 1.1 mm net acres to 1.4 mm net acres.
Canacol is an exploration and production company with operations focused in Colombia. Canacol Energy’s common stock trades on the Toronto Stock Exchange, the OTCQX in the United States of America, and the Colombia Stock Exchange under ticker symbol CNE, CNNEF, and CNE.C, respectively.
Above photo courtesy Canacol Energy