Chevron declares force majeure on Colombia gas

OREANDA-NEWS. December 22, 2015. Chevron and its Colombian state-controlled partner Ecopetrol have partially suspended their Guajira province natural gas field operations for maintenance, knocking off more than a quarter of Colombia total gas production in an already tight market.

Operator Chevron will conduct "corrective maintenance on the Train B centrifuge compression system's turbine" at the Chuchupa field on 18-24 December, the two companies said today.

The companies already declared force majeure on 17 November for gas delivery contracts to buyers on the Caribbean coast. This will remain in effect until maintenance is completed, they said.

The maintenance takes down 60pc of Guajira gas production, or around 260mn ft3/d (7.3mn m3/d).

Chevron and Ecopetrol's Guajira association includes three mature fields, one of which, Riohacha, has already been shut in on dwindling production.

The other two fields, Chuchupa and Ballena, averaged 434mn ft3/d in September, accounting for around 40pc of Colombia's total gas output.

Colombian thermal power generators and industries on the Caribbean coast are battling gas supply scarcity and inflation-linked prices that have doubled over the last 12 months.

Dual-turbine thermal generators are using more costly diesel fuel to maintain operations as a drought triggered by meteorological phenomenon El Ni?o strains hydroelectric reservoirs.

Canadian independent Canacol Energy's recent gas discoveries in Sucre province on the Caribbean coast, in addition to planned pipeline imports from Venezuela, should boost supplies in 2016. In 2017, a group of thermal generators plans to start importing LNG through a new regasification terminal near Cartagena.

Colombia's energy ministry has been criticized by gas producers for erratic gas pricing policy as Bogot? tries to keep Caribbean coast prices from soaring further.

The ministry is considering restoring a WTI indexation to gas contracts.