Frontera announces agreement between Puerto Bahia and GASCO to pursue LPG project in Cartagena, Colombia
Frontera Energy Corporation announced that its subsidiary, Sociedad Portuaria Puerto Bahía S.A. ("Puerto Bahia") and Gasco Soluciones Logísticas y Energéticas S.A.S. ("GASCO") have entered into a Framework Collaboration Agreement to jointly pursue a liquified petroleum gas ("LPG") project at Puerto Bahia's state-of-the-art liquids and dry cargo port terminal strategically located in the Bay of Cartagena, Colombia.
The agreement covers the construction and operation of the LPG project and is expected to be in service by 2027. Frontera owns a 99.97% equity interest in Puerto Bahia.
Puerto Bahia and Gasco have signed a Collaboration Agreement to develop of a 20,400 tons LPG refrigerated storage facility at Puerto Bahia. The estimated cost of the project is between $50 to $60 million, which will be shared between Puerto Bahia and GASCO. Puerto Bahia's contributions are expected to be largely in-kind.
As part of the Agreement, Puerto Bahia and GASCO will establish a joint venture to develop, construct and operate the LPG facilities at Puerto Bahía's port terminal in Cartagena, Colombia. The project may include additional phases to capture larger volumes, depending on market demand for LPG.
According to the Colombian Mining and Energy Planning Unit ("UPME"), Colombia consumes approximately 700 thousand tons of LPG annually and will require 1 million tons by 2031. It is estimated that under the base case scenario, approximately 160,000 tons per year of the entire Colombian market could be imported and supplied through this new facility, increasing annually to 340,000 tons per year by 2030 and beyond. Once constructed, the facility will accommodate two Very Large Gas Carriers ("VLGC") per month to supply LGP to the Colombian domestic market.
This collaboration is a significant step forward in meeting Colombia's growing energy needs and demonstrates the commitment of Puerto Bahía and Gasco to investing in the country's energy infrastructure.
Strategically located on the Bay of Cartagena, Colombia. Puerto Bahia features both liquid and dry cargo terminals, enhancing its strategic importance. Puerto Bahia's liquids terminal exports and imports vital crude oil and refined products from Frontera Energy Colombia Corp. (Sucursal Colombia) and, other domestic and international crude oil shippers. With a natural draft of over 18 meters and multimodal connectivity, Puerto Bahía provides competitive advantages in Cartagena´s port.
In 2023, Puerto Bahía and Refinería de Cartagena S.A.S. entered into an agreement to connect Puerto Bahia's port facility and the Cartagena Refinery. The connection will transport crude oil and other hydrocarbons between Puerto Bahía's port facility and the Cartagena Refinery. The Connection is anticipated to be online by year-end 2024.
In addition, Puerto Bahia's dry terminal is the largest hub for roll-on, roll-off cargo in Colombia, accounting for more than 55% of the Colombian car import/export market. The port has significant expertise in break-bulk and project cargo and currently acts as a key supply shore base supporting Colombia's active offshore oil and gas industry.
Gasco Soluciones Logísticas y Energéticas S.A.S. is a company owned by Empresas Gasco S.A, a leading Chilean energy provider with a business model that integrates supply activities, logistics management, gas commercialization and energy solutions. Gasco distributes and markets liquefied gas and natural gas, both directly and through subsidiaries and affiliates, to residential, commercial, and industrial customers.
For over 160 years, Empresas Gasco S.A. has offered competitive and innovative energy solutions through a group of companies whose activities encompass various segments of the gas business value chain, contributing to the sustainable development of the societies in which it operates.
Frontera Energy Corporation is a Canadian public company involved in the exploration, development, production, transportation, storage and sale of oil and natural gas in South America, including related investments in both upstream and infrastructure facilities. The company has a diversified portfolio of assets with interests in 24 exploration and production blocks in Colombia, Ecuador and Guyana, a participation in a crude oil pipeline and the exclusive operation of multi-purpose port facilities in Colombia.
