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South America's LNG market developments

LNG Industry,


The last few years have seen South America emerge as one of the world’s most dynamic markets for LNG development.

Argentina, Bolivia and Brazil

Over the past decade Bolivia, which has the continent’s second largest reserves of natural gas, has become an increasingly problematic partner in the provision of natural gas - so much so that it has bolstered LNG production in the region and encouraged countries, such as Brazil, Argentina and Chile, to invest in LNG import terminal projects. Brazil has built three LNG plants in the last couple of years, while Argentina has agreements with Venezuela to build a regasification plant in Venezuela.

Venezuela, Colombia, Argentina and Brazil

Venezuela, holder of the largest gas reserves in Latin America, is becoming an important player in the development of the LNG industry both domestically and in other parts of South America. The Chavez administration recently signed an agreement with the Argentinean president to build a US$ 400 million plant to regasify gas imported from Venezuela. With regard to Brazil, Venezuela’s state oil company PDVSA is working with Petrobras for two liquefaction units in Venezuela. As for Colombia, although Venezuela is still importing gas through the bi-national pipeline connecting the countries, there are plans to reverse the flow as Venezuela’s gas production increases. Colombia’s focus on offshore exploration could also see the country become an LNG exporter.

Uruguay, Argentina and Chile

Uruguay is currently enjoying a boost in its LNG industry with its first LNG plant likely to be operational by 2012. Uruguayan state oil company, ANCAP has plans to build a regasification plant to serve both Uruguay and Argentina, taking advantage of an existing pipeline between both countries. And as for Chile, its LNG import terminal in Quintero Bay, led by the UK’s BG Group, is predicted to have the capacity to generate 15 million m3/d of gas starting next year.

The power of politics

One result of the politics in the region is the increased importing of LNG to 27 billion m3/y by the end of 2012, according to the 2008 World Energy Outlook from the International Energy Agency (IEA). The political differences between countries have also seen a failure to further develop natural gas flows across the continent through overland pipes. The result is that future energy integration is more likely to be based on LNG terminals based on the coasts. And as well as the regional markets, the potential for greater LNG exports to the Mexico, the USA and Canada is also huge with South America having the gas sources and proximity to be a key exporter.

Peru - a model for LNG investment?

Peru is a country where LNG development can be seen as model of international co-operation. Latin America’s first LNG export project is taking place in Peru as part of a US$ 3.8 billion project, which is expected to start up operations next year. It includes a liquefaction plant and a marine loading terminal on Peru’s central coast, as well as a new 408 km pipeline that will connect to an existing pipeline network east of the Andes.

The future

Despite the fact that the LNG sector has developed to a large extent due to the inability of countries to guarantee natural gas supplies and the delays in developing a regional gas pipeline network, there is no doubt that LNG development in South America represents an exciting new development. Watch this space!

Author: Clarisse Rocha, The EIC, BRAZIL

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/30092009/south_americas_lng_market_developments/


 

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