Demand for Colombia LNG Shipments Set to Surge

Colombian power plants are preparing to ramp up liquefied natural gas imports ahead of an expected El Niño, which would bring dry weather to the Andean country. 

The US Climate Prediction Center has signaled that an El Niño is likely to develop by Aug. 1 and persist through the end of the year. The phenomenon typically raises global temperatures and shifts rainfall patterns, often bringing hotter and drier conditions to Colombia and the Andes. That poses a risk to the country’s power system, which relies on hydropower for roughly two-thirds of generation capacity.

Colombia’s fossil fuel-burning power plants, which run mostly on natural gas, are currently supplying about 15% of electricity but will need to boost output to help preserve reservoirs levels, said Alejandro Castañeda, director of Colombia’s power generators’ association Andeg.

The country is importing around 210 million cubic feet a day of LNG through its sole import terminal, SPEC, primarily to meet demand from households and industry, Castañeda said, adding that higher LNG imports will likely mean higher energy prices. Around August, the facility’s total import capacity of 475 million cubic feet a day will likely be used by thermal generators. 

SPEC “will most likely be operating at full capacity beginning in August,” to meet demand from thermal plants, Castañeda said.

Colombia, which began importing LNG in 2016, has steadily increased volumes over the past decade, with shipments surging to 2.06 million metric tons in 2024 during the last El Niño, according to data compiled by Bloomberg. Imports fell 8% the following year to about 1.9 million metric tons. 

A growing domestic gas shortage in Colombia has drawn more than a dozen LNG import proposals to meet gas demand mostly from other sectors. Two small 60 million cubic feet a day projects have taken a final investment decision, with operations set to begin in September. Ecopetrol SA will have a facility in Buenaventura along the country’s Pacific coast and Caribe LNG, led by Course2 Energy LLC and Andalusian Energy, will have a similar one along the Atlantic coast.

Colombia’s power system operator XM SA said in its latest report that reservoirs need to build water from August to exceed 80% of capacity before the country enters a drier stretch typically seen from December through April, a period known locally as “energy summer.” Current reservoir levels are around 60%, according to XM.

Thermal generators are likely to run at full capacity between November and May, Castañeda said. During the last El Niño, they accounted for as much as 55% of the country’s electricity generation.    

Speaking to reporters last week, Castañeda said Colombia needs to prepare for a strong El Niño to avoid power outages. Proposed measures include incentives for households to curb electricity use and policies encouraging companies to generate their own power and sell excess supply to the grid.