Promigas and Gases de Occidente: Institutional voids in complex environments

Promigas, founded in 1974, is one of the pioneering companies in the natural gas sector in Latin America. Its role has been fundamental in the process of widespread use of this energy source in Colombia. This case presents its history and that of one of its subsidiaries, Gases de Occidente (1992). Together they show how they established themselves and were able to conduct business in two complex coastal regions. In La Guajira, Promigas participated in the Regional Gas Pipeline Program. The connection process involved branching from an existing main pipeline. In Buenaventura, Gases de Occidente (GdO) created the ‘Connect with your neighbourhood’ (Conéctate con tu barrio) project using a virtual gas pipeline, a system to transport gas by trucks.

The case describes the challenges of innovating to increase gas service coverage in contexts where institutional voids are prevalent. It illustrates how to take advantage of entrepreneurial opportunities in such contexts. The case provides an opportunity to discuss a lack of intermediaries, or the participation of a few actors in these voids, and how companies can take actions to overcome shortcomings. Despite the complex environments, Promigas and GdO were able to create new internal structures and collaborate with communities to offer their service. Several years after coming to Buenaventura, GdO received a notice to appear before the city council when one councilmember claimed that GdO did not have the required permits. Provision of public services such as gas distribution implies exposure to risks, including interference from political actors with claims unrelated to collective interests. Participants in the discussion of the case can learn from internal responses to various external challenges.