What were the key focus points for Ecopetrol in the last few months?

2023 was a year of consolidation for Ecopetrol’s petrochemical business. In 2019, we ambitiously planned to double our petrochemical business by 2025, but we reached this target by 2022 without additional capital or operational expenditures, relying instead on optimizing existing resources, enhancing plant stability, maintaining product quality, and expanding into new markets. For 2024, the focus shifts to further consolidating these gains amid global, regional, and local economic challenges.

We have focused on several fronts, particularly logistics, where we have developed capabilities to reach almost end-user markets. We established a “Chartering Desk” to secure Contract of Affreightment (COA)s for aromatic BTX and some aliphatics, enhancing our logistical flexibility through co-chartering and DAP deliveries, expanding our market beyond Colombia, facilitating sales of aromatics and providing return freight opportunities in complementary categories such as methanol and caustic soda. While we operate as commercializers rather than producers in these sectors, we have achieved a market share of approximately 35-33% in local methanol and about 25% in caustic soda.

Regarding asphalt, we began with a COA and, starting in September 2024, will add a time charter. This is crucial because one of the region’s main barriers to asphalt commercialization is the limited number of heated tankers—only seven exist, and we will have two. We are capturing a significant niche in the region, becoming a supplier of approximately 30,000-35,000 tons of asphalt per month for export, with promising growth predictions. What are the key milestones and applications achieved with the post-consumer plastic asphalt technology in 2023?

In 2023, in a close cooperation with our clients we developed an innovative technology called post-consumer plastic asphalt. Typically, Poly(styrene-butadiene-styrene) or SBS is used internationally to modify asphalt, constituting about 3% of the mixture. We replaced 1-1.5% of this with recycled post-consumer plastic. This does not mean we are adding waste; we work with classified resins, using low-density polyethylene, high-density polyethylene, or polypropylene, each melted at different temperatures and standardized into pellets. We have successfully applied this technology in 18 projects, demonstrating it is no longer a pilot phase.

Last year, we faced uncertainty about the steady supply of post-consumer plastic. To address this, Esenttia, a subsidiary of Ecopetrol, recently inaugurated a state-of-the-art plant in Tocancipá with an annual processing capacity of 12,000 tons of post-consumer plastic. The plant guarantees a consistent supply of recycled plastic for asphalt production in Colombia and some export applications.

We are collaborating with the central government to make post-consumer plastic asphalt practice mandatory. This initiative offers environmental benefits and seeks to improve recyclers’ working conditions and formal employment status. How is Ecopetrol transitioning the journey to a greener world?

In October 2024, we will launch an industrial-scale trial for Sustainable Aviation Fuel (SAF) using 2% to 5% of bleached palm oil and used cooking oil. This initiative aims to position Colombia as a regional leader in SAF production, involving close collaboration with the Colombian government and airline customers to gradually introducing SAF into Colombia’s jet fuel market.

The transition to renewable energy requires substantial resources, which our existing operations must fund. Therefore, maintaining our traditional business is crucial to finance investments in wind, solar, hydrogen, natural gas, and second-generation biofuels. How does the Houston subsidiary’s local presence in the US benefit Ecopetrol’s trading operations?

Houston handles 30% of our crude exports to the US, and also plays a dual role, managing Ecopetrol’s fuel transactions and procuring naphtha for crude oil dilution or deals for products like methanol marketed across Central and South America, enhancing our market competitiveness. Operating from the US provides access to a broader stakeholder base, ensuring competitive economic conditions compared to operating solely from Colombia. Do you have a final message for the attendees of APLA’s annual meeting in Cartagena this year?

Cartagena is not only a tourist city. It is also becoming an industrial cluster vital to Colombia. Projects in La Guajira, relatively close to Cartagena, highlight the importance of the Colombian Caribbean. Ecopetrol’s deep and ultra-deepwater gas discoveries contribute to the region’s growing profile as a hub for clean energy development, which is expected to consolidate further in the coming years.