Brazil breaks record for LNG imports, but there may be a shortage of gas for plants

With the increase in thermoelectric energy due to the water crisis, the balance between supply and demand for natural gas should come under severe stress in the coming months. Due to both cyclical and structural factors, there may not be enough gas for all plants, even in the face of record imports of liquefied natural gas (LNG), experts say.

According to Petrobras, given the increase in demand, the company is negotiating a new interruptible contract with Bolivia and “providing alternatives” to make available a third regasification vessel.

The Brazilian market is served by three sources: domestic production represents practically half of the country’s gas supply, while imported LNG and Bolivian production account for a quarter of the supply each, according to data from Petrobras.

The president of Gas Energy, Rivaldo Moreira Neto, says that all three sources are currently facing some kind of limitation. On the import side, Bolivia, which has already delivered more than 30 million daily cubic meters (m3/day) to Brazil in the past, no longer has the same production capacity and today has a contract with Petrobras for shipment of up to 20 million m3/day. In the case of LNG, WoodMackenzie estimates that imports reached a monthly record in July of 28.8 million m3/day. There is, however, a caveat there: the NewFortress terminal in Sergipe is not connected to the national gas pipeline network. In addition, the Petrobras plant in Pecém (CE) does not currently have a re-gasifier vessel.

On the national supply side, Moreira Neto cites the delay in the construction of the Route 3 gas pipeline, which will only be ready in 2022. Without it, some large pre-salt fields are unable to bring gas to the continent and Brazil reaches reinjection records of around 60 million m3/day. In addition, the scheduled shutdown of the Mexilhão field and the Rota 1 gas pipeline will restrict supply in September.

Source: Valor Econômico

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https://valor.globo.com/brasil/noticia/2021/08/19/brasil-bate-recorde-de-importacao-de-gnl-mas-pode-faltar-gas-para-usinas.ghtml

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