Tender for a new thermogas plant in Guayas or Santa Elena will generate an investment of $ 600 million

Debate continues on the prioritization of industrialization or importation of natural gas in Ecuador.

A new gas-fired power plant, different from the existing Termogás Machala, will be built in the next30 months at a cost of $ 600 million of private investment and that should generate about 400 megawatts of energy.This project, to be built near the ports of Posorja (Guayas) or Monteverde (Santa Elena), will be managedby the winning private company for 25 years.

Yesterday, the Ministry of Energy and Non-Renewable Natural Resources launched thePrivate Selection Process (PPS) for the construction of this projectand for two more projects.

The first is the Non-Conventional Renewable Energy Block (ERNC), which uses hydroelectric, biomass, photovoltaic and wind energy, and which would generate 500 megawatts. The other is theNortheast Transmission System concession, which will supply the oil industry, which currently consumes fossil fuels.

In accordance withMarco Valencia, coordinator of the public selection processes, this project can be built in a coastal location, and the energy used must be injected into the Chorrillos station in Guayaquil.The business model will be through remuneration with a fixed charge for the available energy and a variable charge for the energy actually dispatched. The company will be responsible for the supply of local natural gas or imported gas. For Valencia, this is a first project that opens the opportunity for natural gas to enter the country.

About the topic, Jorge Luis Hidalgo, manager of Green Power, a company that seeks to industrialize local natural gas (from Campo Amistad or from lighters), but has not yet obtained approval for its project, indicates that, although it is true that in the launch of the combined cycle tender it is mentioned that the gas supply will be with national production or importation, The fact that the new Termogás is in one of the ports of Ecuador is a a sign that the Ministry has the importation of natural gas as a priority.

For Hidalgo, it seemsthe authorities have not analyzed the challenges and risks of relying on imported gas without an energy security strategy(Give priority to the national production of natural gas over imports). He explains that Mexico, last February, suffered blackouts due to the Texas winter storm crisis in the United States; and that in Europe, and mainly in the United Kingdom, where there is a historical price rise, an unprecedented crisis is being generated and they do not have local production.

Regarding the third project for the interconnection of oil fields to the national system, he explains that there is a contradiction on this issue. On the one hand,The oil fields will receive electricity from hydroelectric plants, but at the same time Petroecuador proposes that gas from lighters also be used for electricity generation..

When the Minister ofEnergía, Juan Carlos Bermeo, on the current debate regarding whether the industrialization of gas should be further promoted at the local level (using gas from lighters and supporting production in Campo Amistad) or rather the importation of natural gas,explained that they are different problems but that they can be attacked simultaneously.

However, he assured thatin Campo Amistad (offshore block) between 25 and 26 million cubic feet are being produced, which are insufficient to replace the thermal generation park or the automotive fleet.If you want more local production, billions must be invested for drilling,workover, among other tasks, which the Government does not have. When asked if the possibility of launching athe Campo Amistad tender so that a private company can raise it, said it is an option.

Regarding Campo Amistad, Hidalgo recalled that Petroecuador has confirmed reserves and excellent potential, at a cost of $ 4.50 per MMBTU with a conservative analysis. He regretted that to date it is easier to obtain authorizations to import gas than for national production, which is 40% cheaper.

Meanwhile, the Government is determined to concession other projects. At the moment the concession of the wind project is already advancedVillonaco III, for 25 years and an investment of $ 181 million toCobra Zero E Villonaco. The signing of the contract for the photovoltaic project inEl Aromo, for $ 69.33 million and for 20 years, concessioned to Solar Pack Team.And finally, the projectConolophus for $ 63 million, which was won by the Gran Solar Total Eren Consortium for 25 years.