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Colombia to import more diesel for cleaner fuels

03.14.2014  | 

Colombia reduced sulfur limits on diesel used by trucks to no more than 50 ppm from 500 parts, starting Jan. 1. The more stringent regulations and increasing demand are tightening supply as the country’s second-largest refinery produces less fuel while undergoing work to double its capacity.

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By LUCIA KASSAI
Bloomberg

Ecopetrol, Colombia’s state-controlled oil producer, may increase diesel imports from the US this year as the country shifts to cleaner-burning fuel.

Diesel imports will rise 7.4% this year from about 55,000 bpd last year, according to Colombian government data compiled by consulting firm Frost & Sullivan. The US accounted for 79% of all fuel shipments to Colombia in 2013, the data show.

Colombia reduced sulfur limits on diesel used by trucks to no more than 50 parts per million (ppm) from 500 ppm, starting January 1. The more stringent regulations and increasing demand are tightening supply as the country’s second-largest refinery produces less fuel while undergoing work to double its capacity.

“Given growth in fuel demand, they do have difficulties in supplying the domestic market and will keep increasing imports this year,” said Hernan Cavarra, a Buenos Aires-based analyst at Frost & Sullivan.

Colombia’s fuel demand is increasing as the country is forecast to expand by 4.5%, more than the 2.7% growth for the US economy, data compiled by Bloomberg show. Ecopetrol is seeking to buy 415,000 bbl of diesel for delivery in April.

The Cartagena refinery ran at 34% of capacity in the fourth quarter, down from 86% a year ago, due to work to double its capacity to 165,000 bpd, the Bogota-based company said Feb. 25. The expansion should be completed by the first quarter of next year, CEO Javier Gutierrez said.

“We’re importing low-sulfur diesel to meet the environmental regulation and this should go on until we finish expansion work at the Cartagena refinery,” Ecopetrol said in an e-mailed statement in response to why diesel imports are increasing.

Last year, Colombia bought 74,000 bpd of distillate fuel, including heating oil and diesel, from the US, the most in Energy Information Administration data going back to 1993.



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