Development of new markets and midstream businesses
02.

Development of new markets and midstream businesses

We are in the maturation of new opportunities

Identifying potential business opportunities for our company is a task that goes beyond Colombian borders to achieve presence in other countries in the region.
New markets and businesses
CNG, on the path of sustainable mobility
Read this story
Transmilenio en una calle de Bogotá

Why is this important?

(103-1)

Managing the development of new markets and midstream businesses allows us to identify initiatives that add value to us and that leverage our economic growth in the short, medium and long term.

(103-1) Path to expansion and growth with infrastructure and midstream services

New connecting gas pipelines
Development and presentation of offers to gas producing companies.
LNG import projects
Regasification plants and import projects and initiatives.
Midstream services
Development and presentation of offers in treatment, processing and O&M services.
Multimodal conveyor
LNG small scale initiative.
Fusions and acquisitions
Possible valuation of inorganic assets for acquisition or participation in gas transportation and distribution assets.
Opportunities in Latin America
Analysis of the natural gas market in Chile, Mexico and Peru.
Innovation
Research, understanding of hydrogen technology in coordination with GEB.
Biogas
Understanding of the treatment initiative and connection to sources.

How do we manage it?

(103-2)

The development of new markets in the Strategic Business Units (UEN) - Urban, Mobility, Industry and Thermal - is in line with the expansion plan initiatives in defense of our current business, which involves greater demand with unregulated rate options for the thermal sector, NG substitution programs in industrial demand and promotion of NGV mobility agreements and NGV transport fleet projects in the cargo segment.

The monitoring of this management is carried out through Business Development Management committees with the completion of the technical files for each of the PEC initiatives and projects with monthly monitoring and progress; monitoring and compliance with the strategic risk control matrix, carried out in 2020; internal and external audits; and presentation to the Finance, Investment and Project committees to ensure the maturity of business initiatives and approvals, in order to submit offers in the case of connecting gas pipelines.

  • Transmilenio en una calle de Bogotá

    The development of new markets; we work to promote the projects of transport fleets dedicated to NGV.

  • Exhibición de camiones

    The development of new markets; we work to promote the projects of transport fleets dedicated to NGV.

  • Dos buses enfrentados

    The development of new markets; we work to promote the projects of transport fleets dedicated to NGV.

What we achieved in 2020

(103-3)

We are advancing in understanding green hydrogen technology and we seek to evaluate possible agreements for the structuring of a hydrogen injection pilot in the ballena-barrancabermeja gas pipeline.

Development of new markets

  • (Own) We surpassed the goal of incremental volume of natural gas transportation established in 17 MPCD. We reached 24.2 MPCD - a relevant contribution in clean air and productivity.

  • (Own) In 2020 we maintained a 54% market share in gas transportation in Colombia.

Natural gas for vehicles (NGV)

  • (Own) We reached a total in incremental volumes of 6.32 MPCD, which is due to 9,856 vehicular conversions and 862 NGV-operated vehicles. Of the 862 new units, 618 (standards of the public passenger service segment) were incorporated without the need to deliver resources from the natural gas chain; negotiation with the Bogotá SITP, Masivo Capital and Suma SAS operators (with the distributor Vanti) for the replacement of the fleet that had reached its useful life.

  • (Own) 27 projects were approved with 344 new units, which will be served by Vanti, GDO, EPM, Llanogas and Alcanos de Colombia, with the Sipotruk Faw, Scania and Fiat brands. The same applies to the companies Maquehua, Carga, Alquería, Teca Transportes, Cartones América, Servntadorga, Transcarga, Bioagrícola del Llano and the SITP of Bogotá. This way, we cover the passenger transport, inter-municipal cargo, last mile in cities and solid waste collection needs.

Households and businesses

  • With Llanogas we were able to implement the Review Plan (gas furnace and heater) and the structuring of the project for the assembly of washing and drying spaces in housing projects.

  • With Efigas we started presenting proposals to construction companies for the assembly of washing and drying spaces in common areas of new housing projects. TGI is in charge of making the connection to the distribution network and the partner Vanti makes the assembly of the infrastructure (equipment), training for use and maintenance.

  • With Vanti, we structured the pilot of three community laundries, expecting to replicate in the second half of 2021 the assembly of another 30, depending on the results we obtain.

Industries

  • (Own) The total incremental demand for the industries in 2020 was 3.88 MPCD, associated with cement industries in the GBS gas pipeline, with a potential consumption close to 65 MPCD and the possibility of substituting coal, cofiring (simultaneous combustion of bagasse and natural gas), auto and cogeneration.

  • We have developed an incentive mechanism for the industry that will make it possible to increase this substitution. The "Guidelines to encourage the demand for natural gas in industries" was approved in November and was launched on December 1.

  • As part of the United Nations Global Compact and within the framework of its new value proposition and commercial strategy, we generate economic incentives for industrialists who require adjustments in their plants to migrate to natural gas.

Thermal plants

  • We have six thermal plants connected to the National Transportation System (SNT), representing an average 1,300 MW and an approximate consumption of 200 MPCD, in conditions of low hydrology and attractive prices on the Stock Market.

  • We signed two transportation contracts: one interruptible for 8.5 MPCD with Meril Eléctrica and another 5.6 MPCD with Termocentro.

Midstream

  • We presented five non-binding offers to different clients for the connection of new fields, both on-shore and off-shore, which in some cases include the treatment of the natural gas required to bring it into RUT conditions for transport by the SNT. The offers presented were María Conchita, by Cruz Sur; La Belleza, by Parex; COR 15 by Maurel & Prom; Orca off-shore and Gorgon off-shore by Ecopetrol.

  • We began to develop the Opón de Hades field connection, in which the purpose is to present an offer to the client in the future.

  • We are progressing in the analysis of new developments in the Piedmont, together with Ecopetrol and other producers in different regions of the country (Canacol, Hocol, among others).

Other projects and initiatives

  • In Colombia, we made progress in identifying gas transportation assets that adhere to the Group's strategic fit and considering their possible acquisition.

  • In Latin America, we have analyzed attractive countries for TGI (Mexico, Peru and Chile) in terms of their economy, political stability, openness to business, among others, and the potential development of the natural gas sector to determine investment opportunities in greenfield or brownfield projects for gas pipelines and regasification plants.

Challenges for 2021

At tgi we have the challenge of continuing an information base with new potential business opportunities that allow us to obtain additional revenue lines.

Industries

  • Replace fuels in the industrial sector (8.1 MPCD in 2021 and 65 MPCD) in the next five years, of which 60% is coal and the remaining 40% LPG with bagasse, which will become new self-generation projects and cogeneration. In addition, contribute to the reduction of CO2 emissions.

Thermal generation

  • Within the framework of the new CREG Resolution 185 of 2020, reactivate in 2021 the natural gas thermal station to generate multiple contracting alternatives that allow us to support, in the long and short term, energy obligations, which will depend on Stock Exchange prices.

Large cities

  • In the short term, circulate 40,000 new license plates converted to NGV, replace 5% of the diesel cargo fleet in Colombia and implement the micro LNG pilot.

  • In the medium term, incorporate light NGV-powered light vehicles; circulate 80,000 new license plates converted to NGV and replace 10% of the diesel cargo fleet in the country.

  • In the long term, replace 30% of light public service vehicles for NGV-powered vehicles and diesel cargo fleets in the country replaced with NGV and LNG-operated vehicles.

Midstream

  • Continue the active management with natural gas producers for the connection of new fields under development and related processing and treatment services, as well as in others, for example, small-scale LNG.

  • Mature large-scale LNG import initiatives, such as the Pacific Import and Regasification Plant (PIRP), promoted by the Government, and the Caribbean Regasification Plant, a private initiative of TGI, in addition to other import projects that we identify in the country in the medium term.

  • Regarding inorganic growth, in the short, medium and long term, analyze assets and new initiatives in Colombia and Latin America to seek opportunities for the acquisition or development of brownfield projects in gas pipelines, regasification and liquefaction plants, and small-scale regasification, among other services related to natural gas.