In Beijing yesterday Colombian President Juan Manuel Santos said China is “very interested” in investing in an oil pipeline that would run from Venezuela to Colombia’s Pacific coast. President Santos is currently in China on a five-day trip to promote trade and investment ties between the two countries. China is already Colombia’s second-largest export market, mainly for oil and coal, and with demand growing there while the U.S.’ energy market evolves, “we have to start shifting our markets to Asia,” said Colombian Minister of Mines and Energy Mauricio Cárdenas.
On Wednesday the state-owned Chinese Development Bank signed a preliminary agreement with Colombian state oil company EcoPetrol to provide financing for the pipeline. The final route has not been determined, but it is expected to transport 600,000 barrels of Venezuelan and Colombian oil per day by the time it is completed in 2018, ensuring quicker transport of oil to China and other Asian markets. Chinese and Colombian officials also discussed bringing in the state-owned petrochemical firm Sinochem International Corp. as an equity partner.
The ministers accompanying President Santos also held talks with Chinese officials about developing central Colombian reserves of coking coal, which is used to make steel; building a railroad from the center of the country to the Pacific coast to facilitate the exploitation and export of those reserves; and possibly undertaking joint ventures to mine for coltan, a conductor used in many consumer electronic products.
President Santos’ visit comes at a time of evolving relations between the U.S. and Latin America, and of ever increasing ties between Latin America and China. U.S. demand for energy sources such as coal and oil has slowed as its energy mix shifts toward natural gas, while China has increased its investment in oil exploration and production in the region, including an $867-million takeover in 2009 from Emerald Energy PLC of Colombian and Syrian oil assets.