In the last few years Latin America has emerged as one of the world’s most dynamic markets for LNG production. The presence of huge gas reserves in some South American countries and the inability of others to guarantee natural gas supplies, as well as the setbacks in developing a regional gas pipeline network mean that LNG represents an exciting new development.
The LNG import business in Latin America is set to see big growth this year as a number of recent projects across Brazil, Argentina and Chile are completed, while new terminals in Mexico will drive LNG demand even further. All of this has not gone unnoticed by leading executives from the oil and gas industry, who believe that now is the time to invest.
The development of LNG imports has been driven by the industry’s reluctance to increase investments in Bolivia, which has the continent’s second largest natural gas reserves. As a result, Argentina is no longer considering the construction of a US$ 1.6 billion gas pipeline to boost its imports from Bolivia and has instead opted for the option to import LNG; a decision that seems to be very popular with many other Latin American countries. Ensuring energy security is the number one priority in today’s world economy and LNG is a clear winner for the South American continent.
Peru, with its large natural gas reserves, is keen to lead the way in exporting LNG to the US and is one of the most advanced projects in South America, with major companies from the US, Spain and Korea eager to invest. Another emerging player is Venezuela; a country which holds the largest gas reserves in Latin America (estimated at 174.9 trillion ft3) and which is gradually becoming an important player in the development of the natural gas and LNG industries, both domestically and globally.
Both Brazil, which recently announced investments of US$ 540 billion in its energy sector over the next nine years, and Argentina, have recently secured new gas import deals with Venezuela. Colombia’s focus on offshore exploration could also see the country becoming a major LNG exporter, while Uruguay’s first LNG plant is likely to be operational as soon as 2012.
As a result, industry executives are eager to hear how future projects will succeed in a similar way to those in Peru. A committee who will focus on political, geographical and technological futures will meet at the NG O&G LA summit and the announcement of future projects is sure to shape the future of LNG supply and demand.
The growth of LNG within Latin America relies on stable and consistent input from both the governments and industry but the time to act is now. Is this the bright future we have been led to believe?
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