A month prior to the impending drought set to diminish the nation’s electricity supply, the state-owned entity, Corporación Eléctrica de Ecuador (Celec), urged Petroecuador to hasten the importation of natural gas.
The looming threat of an impending drought has cast a shadow over Ecuador’s energy landscape, prompting the state-owned power company, Corporación Eléctrica de Ecuador (Celec), to immediately seek solutions to mitigate the potential electricity shortages. At the heart of this crisis is the need for an accelerated purchase of natural gas to power thermoelectric plants, providing a lifeline to the country’s power grid during the impending dry season.
The urgency of the situation became evident as Celec reached out to Petroecuador, the state’s oil company, a full month ahead of the anticipated drought, which is expected to ravage the nation from October 2023 to March 2024. This period of reduced rainfall threatens to curtail the flow of water in the eastern river basins, subsequently depleting the water reserves of major hydroelectric facilities like the Paute and Mazar plants. To exacerbate the precarious situation further, the looming possibility of an El Niño Phenomenon striking Ecuador in October could intensify the drought’s impact in the Sierra and Amazonia regions.
Amid this impending crisis, Celec’s proposal centers on the importation of natural gas to supply its underutilized Termogás Machala thermoelectric plant, situated in the El Oro province. This facility, capable of generating 230 megawatts, currently operates at a fraction of its potential, necessitating an influx of 60 million cubic feet of natural gas daily. To meet future demands, Celec plans to add two additional turbines, increasing the plant’s capacity to 417 megawatts and raising the daily natural gas consumption to 80 million cubic feet. This ambitious plan is seen as essential to mitigate the risk of electricity shortages and maintain a stable power supply across Ecuador.
However, Petroecuador’s current natural gas supply from the Amistad Field, located in the Gulf of Guayaquil, falls significantly short of Celec’s requirements, providing just 16 million cubic feet per day. Recognizing its inexperience in fuel imports, Celec appeals to Petroecuador to spearhead the necessary import procedures. Yet, this request is hampered by the absence of infrastructure for the importation and storage of natural gas, as Ecuador has never ventured into such a procurement before.
One potential solution proposed by Celec involves utilizing the existing Amistad Field infrastructure for natural gas imports. However, Petroecuador cautioned against this approach in a May 2023 letter, highlighting technical barriers that could severely damage the Amistad wells. Furthermore, the environmental license for Campo Amistad primarily covers production activities, not importation, creating additional hurdles for this approach.
Any solution will cost millions
Petroecuador, aware of the impending energy crisis, has sought alternatives to meet Celec’s needs, although they come at a cost. Two primary proposals have emerged: the construction of a floating natural gas terminal, complete with a pipeline, at an estimated cost of $41.6 million, and the installation of a mono buoy and pipeline, with an estimated cost of $80.1 million.
The urgency of addressing these issues cannot be overstated, as Ecuador faces the dual challenges of impending drought and potential energy shortages. The collaboration between Celec and Petroecuador is pivotal in navigating these turbulent waters, ensuring the nation’s energy security and stability. To accomplish this, the Ecuadorian government must carefully weigh the economic and logistical considerations of importing natural gas, embracing a proactive approach to safeguarding the well-being of its citizens and the resilience of its power grid in the face of climate-induced challenges.