January 2023

Features

Jobo-Medellin Gas Pipeline Tabbed as Colombia’s Priority Project

By Mauro Nogarin, P&GJ Correspondent, South America  

(P&GJ) – The Canadian company Canacol Energy signed an agreement with the Shanghai Engineering and Technology Corp. (SETCO) consortium to build a gas pipeline.

The 189-mile (289-km), 22-inch pipeline, from the Jobo gas processing facility to the city of Medellin, was declared part of the National Strategic Interest policy by the Colombian government. 

The project will connect the Canacol gas fields with the sales market in the interior of Colombia, which represents about 60% of the growing demand for natural gas. 

Beyond Medellín, the pipeline will make Canacol’s gas available to consumers located in the cities of Bogotá, Cali and other regional markets. 

According to the work schedule prepared by Canacol, the pipeline will go into service in December 2024. 

The president of Canacol affirmed that the construction of this pipeline will allow Canacol to send new volumes of gas to the internal market of Colombia, and at the same time increase gas sales as a whole to more than 300 MMcf/d until 2025.  

The project will also provide energy to customers in the interior of the nation, since Ecopetrol’s gas fields, which are located there, will begin to decline in 2024. 

SETCO, headquartered in China, will be in charge of construction, and is primarily involved in construction and the manufacture of pipelines and in Asia and the Middle East. 

Under the terms of the agreement, SETCO will be responsible for 100% of financing construction and will operate and maintain the pipeline in accordance with the contract signed with Canacol Energy. 

Canacol’s sole commitment under the agreement is limited to the execution of a transportation agreement, whereby Canacol will pay a fixed fee for a certain volume of gas over a certain period of time.  

Canacol has already executed two, 12-year, take-or-pay gas sale contracts for 75 MMcf/d in volume to Medellin through the pipeline and is negotiating additional long-term, take-or-pay gas sales contracts with customers in the interior to ensure that the new pipeline is filled to initial capacity of 100 MMcf/d. 

Canacol currently has a production capacity of 250 MMcf/d and that will increase to more than 300 MMcf/d, through the drilling of additional wells and the execution of additional infrastructure before the pipeline enters service. 

The new connecting gas pipeline will transport natural gas from the Jobo Station, located in the municipality of Sahagún (Córdoba) to the Tasajera Delivery Station (City Gate Girardota), in the municipality of Girardota (Antioquia), with a transportation capacity of 100 MMcf/d at a design pressure of 1,200 psig without compression. 

According to the National Environmental Licensing Authority of Colombia (ANLA), the gas pipeline will pass through 42 municipalities along its route, seven in the Cordoba region and 35 in the Antioquia region. 

Of the three alternatives proposed by Canacol to the National Environmental Licensing Authority, the preferred route for the gas pipeline will start at the Jobo Station, the point where it receives the natural gas, moving south and passing near the populated centers of Buenavista, Montelíbano and Cáceres. It will then continue almost parallel to the Cauca River. 

Subsequently, the pipeline will continue in a southerly direction, near the eastern flank of Alto de Ventanas, until it reaches a location near the urban center of Yarumal.  

From that point, it will continue south, relatively parallel to National Highway Route 25, which connects the Antioquia area to the city of Medellin. The route terminates by heading southwest to  the City Gate, located in the municipality of Girardota. 

CNEMED S.A.S., affiliated with Canacol Energy, carried out the environmental permit process. 

Project Data: 

Length: 189 miles (289-km) 

Diameter: 22 inches 

Investment: About $500 million  

Capacity: 100 MMcf/d 

In service: 2024  

Source: Canacol Energy 

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