Bids fail in plan to expand main Colombia oil pipefyi
https://af.reuters.com/article/energyOilNews/idAFN1E75K23B20110621?pageNumber=2&virtualBrandChannel=0&sp=true
Bids fail in plan to expand main Colombia oil pipeline
By Luis Jaime Acosta
BOGOTA, June 21 (Reuters) - A plan to expand the pumping capacity of Colombia's biggest oil pipeline hit a roadblock, when bids failed to meet a minimum threshold set by the consortium operating the duct.
In a paid newspaper statement printed on Tuesday, the pipeline operator, Oleoducto Central S.A. (Ocensa), said tendered bids offered fell far short of the 80,000 barrel-per-day (bpd) minimum capacity commitment sought by the company.
It said units of Canada's Pacific Rubiales (PRU.CN: Quote) and Chinese SINOPEC (SNP.N: Quote) (0386.HK: Quote) (600028.SS: Quote) only offered commitments to ship 32,880 bpd in an expanded pipeline.
Ocensa said the bids were submitted under "ship or pay" modality -- an industry term meaning one has to pay for contracted capacity even if not used to ship petroleum.
The Ocensa statement did not specify if Pacific Rubiales and Sinopec had submitted separate bids or a joint tender. Repeated calls to Ocensa for comment were not returned.
Majority owned by state oil company Ecopetrol (ECO.CN: Quote)(EC.N: Quote)(ECP.TO: Quote), the Ocensa pipeline transports about 560,000 bpd of from the lowland Llanos over a rugged eastern Andean mountain chain to Covenas, a port on the Caribbean.
The Llanos basin accounts for about 60 percent of the oil production in Colombia.
Overall, Colombia's oil output was 932,000 bpd in May, up from an average of 776,000 bpd in 2010, according the government's National Hydrocarbons Agency (ANH).
In its statement, Ocensa said it had called for bids, with the hope of expanding the pipeline capacity by 100,000 bpd in a $1 billion project,
Ocensa's minority shareholders include France's Total (TOTF.PA: Quote) and Equion Energy, a joint venture by Ecopetrol and Canada's Talisman (TLM.TO: Quote).
Separately, on Tuesday, Canada's Petrominerales Ltd (PMG.TO: Quote) said it will acquire a 5 percent stake in Ocensa for for $281 million, aiming to reduce its costs of transporting oil in the country. [ID:nL3E7HL212]
The acquisition, expected to close in July, reduces exposure to rising trucking costs, said the company, a 66 percent-owned subsidiary of Petrobank Energy and Resources (PBG.TO: Quote).
A pipeline is a more consistent and cost-effective way of transporting crude, analysts said, adding that the acquisition will help the company steer clear of disruptions to trucking operations due to weather and strikes, and get its oil to the market at a low cost. (Additional reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Lisa Shumaker)