Canacol Energy Ltd. has executed a long-term take-or-pay natural gas sales contract with Empresas Publicas de Medellin ESP (EPM) supporting a new 20-in., 300-km pipeline that will allow Canacol to sell up to 100 MMscfd into Colombia’s interior market. The pipeline will be expandable to 200 MMscfd if demand warrants.
Under the terms of the contract Canacol will deliver gas to EPM in Medellin starting Dec. 1, 2024, with an initial minimum volume of 21 MMscfd, escalating to 54 MMscfd on Dec. 1, 2025, and remaining at that level until the contract expires Nov. 30, 2035.
The pipeline will start at Canacol´s gas treatment plant in Jobo and run southward to Medellin.
Canacol expects by end first-quarter 2022 to have:
- Finalized work on the permits to submit to the National Authority of Environmental Licenses for approval.
- Finalized selection of a company to build and operating the pipeline.
- Arranged financing.
- Begun negotiations with consumers regarding an additional 45 MMscfd to fill the pipeline’s initial capacity.