TGI is a transforming and life-changing business

2020 was a different year for everyone. The presence of Covid-19 in Colombia led us to rethink our strategy and transform ourselves to suit the needs of our clients, collaborators, communities in the territories, the energy market in the region and the reality that the country is experiencing.

If there is something very clear for both, Grupo Energía Bogotá and TGI, it is that Life comes First. Based on the foregoing, we are committed to maintaining the continuity of our projects and operations with the excellence that we have maintained in the market and, above all, guaranteeing the safety of our human team and the inhabitants of the territories where we operate.

This is how we prioritize home-working 50% to 80% of our employees, as well as the implementation and compliance of biosafety protocols and measures to mitigate the spread of the pandemic - work recognized with the Safe Guard certification, after the audits carried out by Bureau Veritas Quality in our administrative offices in Bogotá and Pereira. We aimed at overcoming the boundaries of space and at always being connected with our work teams using technology, based on the culture we share. A culture made up of leaders who were committed to overcoming the natural difficulties that the pandemic imposed on us. Human leaders. We wanted to feel close: that is part of our deeply rooted culture.

This is how we changed from being a company of 457 employees to a large family of more than 2,500 people who received guidance, clear and timely communication, as well as training, health and well-being activities to always feel strengthened.

This strategy, together with biosafety measures, accounted for only 29 cases (6.3% of our workforce) of the total of 300 positive cases reported in GEB and its affiliated companies. None of them were classified as a "major complication" and all recovered satisfactorily.

During the pandemic, we not only took care of our work teams and their families: we also reached the regions with our commitment to generate progress, especially in a year when communities needed us so much. This is why an intervention strategy in the territories of our area of influence was developed for the prevention of contagions and joint work was conducted with local authorities, understanding that together, we can overcome crisis conditions. A clear example is that we were always close to the communities of La Guajira, not only during the pandemic, but also when they were affected by the rainy season.

We provided uninterrupted public service; activities in the country did not cease. Furthermore, two large infrastructure projects continued, while generating more than 2,000 direct and indirect jobs in the territories, thereby bringing progress to the communities with more than 40 social management initiatives valued at COP 2,811 million.

Regarding the first project, called Cusiana Phase IV, the Puente Guillermo-La Belleza loop started up in December 2020, thereby increasing the capacity of the National Transportation System by 11 MPCD. In the first semester of 2021, we have planned the mechanical completion of the Provenir-Miraflores loop to complete works and proceed with the closure and transfer of the project.

Regarding the Ramales Replacement Project, the Industrial Zone-Cantagallo, Cantagallo-San Pablo and Galán-Yondó branches started up, thus replacing the five planned branches with new ones.

With these projects, apart from bringing energy to provide a gas connection service to a house, a business, a service station or an industry, we are actually transforming people's lives and generating prosperity in the communities we’ve reached.

There we are leaders in gender equality issues, because we are not only improving the living conditions of a woman due to the fact that she can cook with gas, just to give an example, but we are also generating job opportunities from their leading role in society.

And despite the fact that our effort was focused on contributing to the dynamics of the sector, even in the midst of the pandemic, the effect of the mandatory preventive isolation measure in Colombia, within the framework declaration of the health emergency, decreased in natural gas consumption from 1,014 GBTUD to nearly 877 GBTUD. As of September 1, with the cessation of the measure, consumption was average until the end of the year, above 910 GBTUD, according to studies by the Natural Gas Market Manager, which is part of the Stock Exchange in Colombia.

Hence, the deterioration in demand, resulting from the economic slowdown and higher prices, meant greater vulnerability for the actors in the energy chain. However, temporary agreements were achieved as part of the chain (generators, conveyors and distributors) to relieve the end user. From TGI we faced this situation by applying the Transitory Commercial Policy, which allowed us to negotiate the rates on the affected demand.

Consequently, our operating income reached USD 456 million - a decrease of 3% compared to 2019 - and we reached a 92% compliance with the budget proposed at the beginning of the year. We achieved a 13% expense decrease on the budget established; efforts derived from the implementation of an efficiency strategy that contributed to an Ebitda of USD 351.5 million- 2% lower than in 2019 and 6% lower compared to the budget. In addition, we were able to deliver dividends to our shareholders of nearly USD 94.6 million.

Hence, thanks to the financial efficiency and control strategy, we maintained at TGI robust cash flow levels that allowed us to meet payment obligations, both operational and financial. Likewise, we maintained the investment grade rating, which was ratified by the main risk rating agencies: Moody's Baa3, stable outlook, and Fitch BBB, stable outlook.

Therefore, we can affirm that in 2020, we continued our sustainable Business Model development, understanding that this is how we contribute to the growth of Colombia and achieve a balance between economic and social returns and environmental protection, in a collaborative environment with our stakeholders.

Our 2020 sustainability strategy was aligned with the 2030 Agenda and the United Nations Sustainable Development Goals (SDGs). This allowed us the due diligence of the social and environmental impacts in the projects, the respect for Human Rights in the operation and in the value chain, as well as the generation of alliances with national, regional and local governments.

The new strategy that we defined in 2020 gave us a clear path as a company to pave the way towards transformation. We are committed to being a company that transforms itself while changing the lives of employees and contractors, of the inhabitants in the territories, of the Colombians who use natural gas at home every day or who move through the cities with NGV-fueled vehicles because, at the end of the day, consumers and their well-being should be the focus of the environment.

The first steps were denominated TGI 2.0 and the aim is to modernize and bring the company to the best standards at all levels, starting with a more efficient operation, reducing costs by at least USD 18 million, improving competitiveness, and maximizing gas transportation opportunities, acting on aspects related to supply and demand by leveraging ourselves on new businesses, accelerating the commercial agenda and being proactive in regulatory matters, for example, regarding the rate policy on gas transportation.

We will also have relevant challenges regarding the construction and development of infrastructure for the National Natural Gas Transportation System once we can confirm the four IPAT projects: Ballena-Barrancabermeja bidirectionality, Mariquita-Gualanday infrastructure, Yumbo-Mariquita bidirectionality and El Cerrito compressor, with investments exceeding USD 116 million.

Thinking about innovating as a company and being a multimodal transporter, our challenge is to offer complementary midstream options, such as large and small scale LNG, and natural gas treatment and processing adjacent to the current business. This way, we will make our projects more and more efficient, while adding to the development of Colombia.

Along these lines, our main effort will focus on the incorporation of innovation and agile processes to accelerate the businesses within our portfolio, where we seek to generate value with strategic allies for the provision of regulated and unregulated midstream services, with a focused effort to ensure that more industries and thermal and electric generators adopt natural gas as energy, with effective results by 2022.

The 457 TGI employees, always with the support and backing of GEB, challenged ourselves to expand our company towards new businesses and new demands that allow us to grow. We are working on vehicular gas projects for transportation, mainly cargo, thus contributing to the reduction of CO2 emissions and improving the air quality of Colombians. Likewise, we are working to capture opportunities in the Peruvian market, where today GEB is a transporter and distributor, and to start looking into other markets in Latin America.

We are committed to finding projects that are relevant, sustainable and feasible, which allow us to expand our gas network from the Atlantic to the Pacific and reach new regions and countries. We want TGI to be sustainable by participating in the development of Colombia. That is where the greatest challenge lies and we are on the way to achieve it, convinced of the value that natural gas has for the energy grid in the region and for the commitments regarding the Paris Agreement and the Sustainable Development Goals.

Our gratitude to all the people and organizations that have made it possible for TGI to get to where it is today, and to all those who will join in building our future. I invite you to enjoy our 2020 summary: a reflection of the commitment and work of 457 collaborators who make it possible for TGI to continue generating that collective life-changing prosperity.

Mónica Contreras Esper
President, TGI