Southern cone gas threatens LNG imports [Gas in Transition}

Southern cone gas threatens LNG imports

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Natural Gas News
Southern cone gas threatens LNG imports [Gas in Transition}

Summary

With Bolivian gas in crisis and Argentinian shale gas production surging, the southern cone’s gas flows are changing fast. Brazilian LNG importers appear to be betting on strong electricity demand maintaining gas’s pivotal role in the electricity generation sector. by: Ross McCracken

LNG import capacity is growing in Brazil, despite a changing gas balance in the southern cone and a large surplus of regasification capacity in the country itself. In 2022, Brazil imported just 2.3bn m3 of LNG down from 10.1bn m3 in 2021 (see figure 1), when drought reduced hydro generation levels, requiring more gas to be imported for power generation. Yet the country has more than 35bn m3/yr of LNG import capacity spread across six facilities with three more under construction. A combination of growing renewable energy capacity, domestic gas production and potential imports from Argentina look likely to be disruptive for LNG. However, some companies take the view that Brazil’s large size, limited gas pipeline infrastructure and need for dispatchable generation to back up its heavy dependence on hydro power create opportunities for the flexible fuel. In particular, Brazilian electricity demand shows much stronger growth than its neighbours, increasing the need for flexible gas-fired generation, some of which will be powered by LNG. New terminals Terminal Gas Sul in Santa Catarina state is expected to start commercial operations as early as this month. Operator New Fortress Energy (NFE) announced in Novem...