Ecopetrol Seeks US Approval for 10-Year Venezuelan Natural Gas Import Agreement

Colombia’s state-controlled energy producer Ecopetrol has formally requested authorization from the United States Treasury to import natural gas from neighboring Venezuela. The proposed 10-year supply agreement would reactivate dormant cross-border infrastructure to address a severe domestic energy shortfall projected for 2025.[1][7]

Ecopetrol Chief Executive Officer Ricardo Roa confirmed the negotiations this week, outlining a strategy to secure reliable baseline energy for Colombian households and industrial consumers. The arrangement requires a specific waiver from the Office of Foreign Assets Control to bypass existing US sanctions on Venezuela’s state oil company, PDVSA.[2][8]

"We are asking for the OFAC license to be able to operate the pipeline and bring the gas," Roa stated during a corporate earnings presentation in Bogotá. He noted that the company is simultaneously negotiating the commercial terms of the decade-long purchase agreement while awaiting Washington's regulatory decision.[3][9]

The transaction hinges on a 224-kilometer pipeline connecting Venezuela’s gas fields to northeastern Colombia, a route that has remained largely inactive for nearly a decade. Ecopetrol intends to take over operational control of the Colombian segment to ensure physical delivery meets the proposed contract volumes.[2][4]

Securing this cross-border flow represents a critical logistical pivot for Colombia, which has historically relied on domestic offshore and onshore reserves. Declining production at mature domestic fields has forced the government and industrial consumers to seek immediate external alternatives to prevent widespread rationing.[1][5]

Bridging the Domestic Supply Gap

Colombia faces a structural natural gas deficit that energy regulators project will reach 12% of national demand by early 2026. Without new import channels or immediate domestic discoveries, the country risks severe supply interruptions for power generation and industrial manufacturing.[4][6]

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The proposed Venezuelan imports would serve as a bridge fuel while Ecopetrol develops its own deepwater Caribbean discoveries. Those offshore projects, including the highly anticipated Uchuva and Gorgon fields, are not expected to deliver commercial volumes to the mainland grid until at least 2029.[2][4]

Industrial groups in Colombia have warned that relying solely on liquefied natural gas shipments through the country's single import terminal in Cartagena would drastically increase energy costs. Piped gas from Venezuela offers a significantly cheaper alternative, utilizing existing physical connections rather than requiring new maritime infrastructure.[3][5]

The 10-year timeline of the PDVSA agreement aligns precisely with the projected gap between current domestic depletion and future offshore production. Ecopetrol executives view the cross-border contract as a necessary stabilization measure rather than a permanent shift away from national energy independence.[1][8]

Market analysts note that the success of this strategy depends entirely on the US Treasury's willingness to grant the OFAC waiver. Washington has previously issued targeted licenses to specific companies operating in Venezuela, prioritizing regional energy stability over blanket enforcement.[7][9]

European Operators and Sanctions Compliance

To navigate the complex sanctions environment, the gas destined for Colombia would likely originate from fields managed by European energy companies rather than PDVSA directly. Spain's Repsol and Italy's Eni currently operate major gas concessions in Venezuela under existing US authorizations.[6]

Sourcing the molecules from Repsol and Eni provides a crucial compliance mechanism for Ecopetrol. By purchasing gas extracted by international operators with established OFAC exemptions, the Colombian firm reduces its direct financial exposure to the sanctioned Venezuelan state apparatus.[6][7]

"The gas we are looking at would come from the projects operated by Repsol and Eni, which already have the necessary permits," Roa explained to investors. This structure mirrors similar arrangements that have allowed European markets to continue receiving Venezuelan energy shipments over the past two years.[6][8]

The physical infrastructure required for the transfer, known as the Antonio Ricaurte Trans-Caribbean pipeline, requires significant maintenance before commercial operations can resume. Ecopetrol has proposed funding the necessary repairs on the Colombian side of the border to expedite the restart.[2][9]

Engineering assessments indicate the pipeline could handle up to 50 million cubic feet per day during its initial reactivation phase. That volume would cover approximately one-third of Colombia's projected 2026 supply deficit, providing immediate relief to the national grid and stabilizing baseline prices for heavy industry.[3][4]

Infrastructure Reactivation Timeline

The Antonio Ricaurte pipeline was originally inaugurated in 2007 by then-presidents Álvaro Uribe and Hugo Chávez, designed initially to send Colombian gas to Venezuela. The flow was intended to reverse once Venezuelan production scaled up, but political tensions and infrastructure decay halted operations in 2015.[2][5]

Reactivating the dormant steel artery requires extensive pressure testing and the replacement of several key compression valves. Ecopetrol engineers estimate the technical rehabilitation will take between eight and ten months once the legal and financial frameworks are cleared by US regulators.[4][9]

The company has already allocated capital within its 2025 budget for the pipeline repairs, signaling confidence that the OFAC license will eventually be granted. The investment reflects a broader corporate strategy to integrate regional energy markets despite persistent geopolitical friction.[1][7]

If the US Treasury denies the waiver, Ecopetrol will be forced to accelerate its contingency plans, which include expanding the Cartagena LNG terminal and exploring new onshore hydraulic fracturing pilot projects. Both alternatives carry significantly higher financial and environmental costs than the Venezuelan import plan.[4][8]

The Colombian government, led by President Gustavo Petro, has actively supported the cross-border energy initiative as part of a broader diplomatic normalization with Caracas. The administration views the gas deal as a template for future bilateral trade agreements.[3][5]

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Market Implications and Next Steps

Financial markets reacted cautiously to the announcement, balancing the clear logistical benefits of the deal against the inherent political risks of relying on Venezuelan supply. Ecopetrol shares remained relatively flat on the Bogotá stock exchange following Roa's presentation.[1][8]

Industrial consumers in Colombia, particularly in the manufacturing and petrochemical sectors, have strongly endorsed the import strategy. The National Association of Businessmen of Colombia recently published data showing that unmitigated gas shortages could reduce national industrial output by 3% in 2026.[4][6]

The 10-year duration of the proposed contract provides the exact regulatory certainty that heavy industries require to plan their own capital investments. Without a guaranteed baseline supply, several major manufacturers had threatened to relocate production facilities to neighboring countries.[2][5]

Ecopetrol now awaits a formal response from the US Treasury, a process that typically takes several months and involves extensive diplomatic coordination. In the interim, the company continues to finalize the technical annexes of the PDVSA contract, ensuring that physical deliveries can commence immediately upon legal authorization.[7][9]

The negotiations also highlight a broader shift in Latin American energy dynamics, where pragmatism is increasingly overriding historical ideological divides. Countries across the region are reevaluating cross-border infrastructure to optimize resource distribution and lower consumer costs.[1][3]

For Ecopetrol, securing the OFAC license remains the definitive hurdle before any steel is replaced, capital is deployed, or binding contracts are signed. The coming months will test whether Washington's willingness to stabilize regional energy markets extends to authorizing long-term infrastructure commitments with the administration in Caracas.[7][8]