Colombia's natural gas market is undergoing a fundamental transformation as traditional onshore basins rapidly deplete, forcing the country to pivot from domestic production to coastal imports and offshore development.

Wood Mackenzie forecasts industrial growth will drive a 1.4% compound annual growth rate in national gas consumption through 2040. Meanwhile, supply is shifting dramatically from interior basins toward Atlantic Coast offshore discoveries, creating a critical geographic mismatch.

A widening gap emerges

By 2040, the Centro region will represent roughly 73% of national gas consumption, up from 63% in 2023, whilst production increasingly originates from coastal areas. This geographic realignment creates fundamental challenges for market participants across the value chain.

The Sirius field, expected online around 2030, will deliver substantial volumes and temporarily reduce Colombia's dependence on LNG imports. However, our analysis reveals that significant Pacific LNG capacity will be required by the late 2030s as coastal pipeline systems reach saturation.

Infrastructure race intensifies

Market participants are responding with swift regasification expansion. Multiple major projects are advancing on both Atlantic and Pacific coasts, with the first facilities potentially operational by 2026-2027. Yet execution risks mount as projects face complex regulatory hurdles and social challenges.

Addressing valuation challenges

So – how can we provide a sensible assessment of the market revenues today and for assets and portfolios looking ahead? What are the risks and uncertainties that require most attention in valuation? Are revenues high enough to obtain the required capital recovery and return rates and are they attractive enough in the long term to support a sustainable BESS development and operating business plan?

We believe current modelling methods underestimate the risk and revenue variance incorporated in BESS projects. They also typically do not fully value the impact of actual trading behaviour.

The new economics of security

LNG imports are transitioning from seasonal stress tools to structural supply components. This shift, combined with transport network constraints, will fundamentally alter pricing dynamics across Colombia's gas market.

Our comprehensive analysis examines which offshore projects will overcome execution hurdles, which regasification terminals are most likely to deliver on schedule, and how rising import dependence will impact industrial gas prices across the interior.

The risk of demand destruction becomes pronounced if critical supply sources and infrastructure projects face delays - potentially triggering widespread losses across key industrial segments.

Learn more

Wood Mackenzie provides proprietary insights to assess project viability, execution risks, and market impacts, helping clients navigate this rapidly evolving landscape and secure reliable supply in crucial demand centres.

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