Colombia could be forced to sharply increase LNG imports between 2021 and 2023 amid declining natural gas reserves and production eclipsed by double-digit growth in domestic consumption.

"Natural gas is a fundamental fuel for energy transformation, however, for every trillion cubic foot produced, we are only incorporating 0.7 to our proven reserves," the country's energy minister, Maria Fernanda Suarez, said Tuesday during an interview broadcast by radio Caracol Colombia. "Work continues on offshore exploration and other alternatives that the country has, [especially] unconventional through fracking," she said.

If new sources or reserves are not found, imports could be required at double the domestic cost to meet residential demand in parts of the country, Suarez also warned in a series of social media posts on her Twitter account.

US spot LNG is probably the most competitive now for Colombia, both in terms of feedstock volume and prices, Schreiner Parker, Rystad Energy's vice president-Latin America, told S&P Global Platts.

"There is probably no destination in Latin America or the Caribbean that won't look to US LNG to be their main supplier," Parker said in an email.

Colombia already imports LNG through the Sociedad Portuaria El Cayao, or SPEC, regasification plant in Cartagena, which is used to support plant operators in the north of the country.

According to the most recent data in BP's Statistical Review of Energy, Colombia produced just enough gas to cover its domestic consumption in 2017. An estimated 75% of the gas consumed in the country comes from the Cusiana, Cupiagua and Chuchupa-Ballenas fields, all experiencing production declines and putting pressure on the country to find and produce new gas resources.

FALLING RESERVE LIFE RATIO

Officials from Colombia's National Hydrocarbon Agency, or ANH, and the Mining and Energy Ministry continue joint work to boost investor confidence in the country's hydrocarbon potential, aiming to attract exploration investments in conventional onshore and offshore reservoirs, in non-conventional reservoirs through fracking and to halt declines in the country's gas reserves and its reserves-to-production or, R/P, ratio.

Colombia's gas reserves fell 2.9% to 3.782 Tcf in 2018 from 3.896 Tcf in 2017, due primarily to a 16% increase in consumption, Suarez said. Colombia's gas reserves have declined continuously over the last six years, ANH data shows. As a result, the country's R/P ratio fell 16%, or by 1.9 years, to 9.8 years in 2018 compared with 11.7 years in 2017. This marks the first time the ratio has fallen this low since the country started keeping records of such data.

Colombia has estimated gas potential of 20 Tcf, Colombian Petroleum Association President Francisco Jose Lloreda Mera in March. Of the potential, 10 Tcf is considered conventional, while the remaining 10 Tcf is considered unconventional, he said.

-- Pietro D. Pitts, newsdesk@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com