A simulation approach for analysis of short-term security of natural gas supply in Colombia

Achieving security of gas supply implies diversifying gas sources, while having enough supply, transportation, and storage capacity to meet demand peaks and supply interruptions. Devising a strategy for securing gas supply is not straightforward because gas supply depends on complex interactions of production, demand and infrastructure, and it is exposed to economic, regulatory, political, environmental and technical risks. To address this complexity, we propose a simulation approach that replicates the structure of the gas supply chain, including transportation constraints and demand fluctuations. We build and calibrate a computer model for the Colombian gas sector, and run the model to assess the impact of expanding transportation capacity and increasing market flexibility on the security of supply. Our analysis focuses on the operation and planned and proposed expansions of the transportation infrastructure because adequate regulation and development of this infrastructure can contribute to increase the security of supply in the gas sector. We find that proposed import facilities, specifically LNG import terminals at Buenaventura, increase system's security under the current market structure. ► We build a simulation model for analyzing natural gas trade in Colombia. ► The model captures the structure of the gas network and on market rules. ► We simulate investment decisions to increase short-term security of supply. ► Securing supply would need LNG imports and expansion of pipeline capacity.