This month, after four years as Secretary General of the Colombian Natural Gas Association (“Naturgas”), Andrés Sarmiento will discover if he is to be crowned President of the private, non-profit trade organisation, made up of the 25 main producers, transporters, distributors and marketers of Natural Gas in Colombia.
Andrés is currently interim President at Naturgas, after his predecessor was announced as the next CEO of Frontera Energy Corporation, the Canadian petroleum exploration and production company.
Educated at one of Latin America’s leading universities, University of The Andes, and Imperial College London, we have followed Andrés’ career development closely after our CEO flagged him as a rising star in 2015.
We caught up with Andrés on Zoom to discuss his potential new appointment, the energy transition and his proposed agenda for the natural gas industry.
“It’s an interesting time to be involved in Colombian natural gas,” he begins, “the market is facing changes and the companies represented on the board are the most important in the energy sector in Colombia and even Latin America.”
This creates an intense mixture of pressure and responsibility for his current role as Interim President in addition to the uncertainty around a permanent appointed, “It’s pretty busy at the moment as I hold both roles [Secretary General and Interim President] and as this is an interim phase, I cannot appoint a team. I’m hoping the Board will make a decision in May, I need 50% to approve but more would be better!”
The natural gas sector is under increasing pressure from the global energy transition and Andrés is at the pointy end of it, “The European energy agenda is impacting the whole world and Colombia is no exception. We are being called to decarbonise faster than we had planned to. Natural gas is seen as the ‘cleanest’ fossil fuel and it persists in the mix of most future energy scenarios, but it is still a hydrocarbon.”
“The European energy agenda is impacting the whole world and Colombia is no exception.”
Colombia’s natural gas production is already starting to outpace other fossil fuels, registering a 5.4% increase in February 2021 while oil production fell 15%. Commercialised gas in Colombia increased in multiple regions as a consequence of a rise in production in the Cupiagua Sur, Cusiana, Cusiana Norte and Arandala fields.
Furthermore, USD 2.9 billion of industry investment was recently announced across 127 private projects, although some are with Ecopetrol, the state-owned energy company. Colombia is also looking at expanding offshore production with Shell, Petrobras and Chevron evaluating opportunities there that would double or triple the current activity. Substantial growth could also come from developing both conventional and unconventional deposits.
Beyond upstream, there is a USD 700 – 800 million gasification plant project under discussion for the Colombian Pacific and a gas pipeline to connect directly to the Jobo-Medellín fields without going around the north of the country.
All of the above points to an abundance of opportunity for Colombian natural gas but what does Andrés expect to be the main agenda items under his potential presidency?
Unsurprisingly, Andrés had a clear plan to articulate, “Firstly, the industry needs to prepare for decarbonisation. We need to work on the issues of green energy and renewables and how natural gas fits in to that.”
“The industry needs to prepare for decarbonisation. We need to work on the issues of green energy and renewables.”
One potential way forward for the industry could be blue hydrogen Andrés explained, “Secondly, Europe is talking about green hydrogen, but Colombia has a wealth of hydrocarbon resources making blue hydrogen a more attractive option. This also helps to strengthen the natural gas industry, of course!”
“Colombia has a wealth of hydrocarbon resources, making blue hydrogen a more attractive option [than green hydrogen].”
To enable this and further progress towards net zero, there needs to be an investment in technology development, “Thirdly, we need to invest in technology to reduce the cost of converting natural gas to blue hydrogen and carbon capture / storage.”
Last but not least, Andrés believes that gender diversity needs to be improved in the energy sector in Colombia, “The industry is dominated by men but women could add a huge amount of value. We have some female representation on our board and it has been extremely helpful. There will be some resistance to this but ultimately we are a trade association, we set the agenda for discussion, the companies’ allocate their own budget.”
“The industry is dominated by men but women could add a huge amount of value.”
In an industry exposed to such a major global transition, this is unlikely to be the only challenge that Andrés will face, “The Colombian government works closely with the private sector. They always socialise ideas with trade unions first to build consensus and align the various stakeholders. A personal challenge for me is to lead a cohesive union where the affiliates can put aside individual interests to discuss what is best for the industry and the country.”
With that, we wish Andrés well and let him return to shaping the future of Colombia’s natural gas industry.