Colombia: Procedures: Public Bidding Of The Gas Transportation System

Last Updated: 9 November 2016
Article by Posse Herrera Ruiz

 Given the difficulties experienced by the natural gas sector in Colombia due to factors such as: (i) the El Niño phenomenon; (ii) the decrease in hydrocarbons exploration activities; (iii) the high prices of electricity and natural gas; and (iv) the shortage of natural gas in the short and medium term, the government has enacted Resolution 400052 of the Ministry of Mines and Energy ("MME") which sets out the legal framework for the creation of an Indicative Gas Supply Plan that will set out the policy actions required to ensure gas supply in the medium and long term..

The Plan intends to promote reliability of supply through the development of priority reliability projects and the promotion of the timely expansion of the national gas transportation system through expansion of existing capacity of development of additional capacity.

For this purpose, the plan identifies certain key projects, including new supply sources such as a new regasification plant on the Colombian Pacific Coast (in addition to the existing regasification plant that will supply LNG to thermal generators located on the Caribbean coast, which is being built in Cartagena) and the expansion of certain sections of the national gas transportation system, such as: (i) Jobo – Cartagena Gas Pipeline; (ii) Ballena – Cartagena pipeline; (iii) El Porvenir – Vasconia pipeline; (vi) Cusiana – Apiay pipeline; (v) Mariquita – Gualanday pipeline; and (vi) Buenaventura - Cali and Cali – Vasconia pipelines;

It also seeks to improve the following gas transportation segments: (i) Ballena - Barrancabermeja; (Ii) Cusiana - Bogota, (iii) CQR (eje cafetero); and (iv) Suroriente, as well as create the conditions for natural gas transportation demand to be satisfied by agents other than gas transportation companies in an efficient way by ordering the Energy and Gas Regulation Commission ("CREG") to create the regulatory framework to this end.

In this context, on March 15, 2016, CREG issued resolution CREG No. 038, which made public a draft resolution, "which sets out the procedures to be followed for the development of natural gas supply plan projects trough bidding processes" (the "Resolution").

The Resolution establishes the parameters for bidding processes to be carried out for the award and development of projects identified to in the Natural Gas Supply Plan, which will be applied to: (i) all natural gas transportation agents, (ii) those interested in participating in the bidding processes, and (iii) any other agents and beneficiaries of the natural gas service ("Processes" or "Process").

The Processes will apply to those investment projects of the plan that are not developed by incumbent transporters, and therefore may be awarded to third parties. In these Processes all existing transporters and other interested third parties may participate provided they meet the following conditions:

a) The interested bidder must evidence experience in the construction of at least 200 km-inch of gas transportation pipeline at least under ANSI 2150 specifications.

b) For other projects, applicant must demonstrate experience in the construction of similar infrastructure projects.

c) Not having affiliation with any of the other bidders participating in the same Process.

d) Not having had a contract declared in breach under the Resolution within the 24 months before the deadline for submission of proposals.

The successful bidder will be selected taking into consideration the criteria established under the Resolution, including the following: (i) enclose a technical and economic offer. The economic offer will be equal to the expected annual income ("IAE"), for a 25 year period as of the date of entry into operation. It will also be used to calculate the value of the offer, and (ii) all proposals must include a bid bond.

It should be noted that, upon by presenting the offer the bidder assumes the responsibility and risk inherent to the implementation and operation of the project having the IAE as its sole remuneration.

Once the Process is completed, UPME shall award the project through an administrative act and the contractor must deliver the required documentation, including a copy of the approval of the compliance guaranty.

All projects must have an auditing firm, which must be selected from a list prepared by the National Council for the Operation of Natural Gas ("CNOG"). Failure to comply with the obligations assigned to the auditor under this Resolution will lead to the termination of the contract and the exclusion of the auditing firm from the list prepared by the CNOG.

The awarded bidder who has been awarded with a project through one of the Processes, may not assign the rights and responsibilities acquired in the award, during the execution of the project or during the payment period, unless there is prior written authorization by the UPME.

By separate resolution CREG will determine the projects that must be developed by incumbent transporters and which, if note developed by them will be tendered out to other agents.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions