The markets driving Latin America's upstream gas expansion

Latin American and Caribbean countries will play a key role in supplying gas to global markets amid efforts to accelerate the clean energy transition, an industry expert told BNamericas. 

According to Luz Stella Murgas, the president of Colombian natural gas association Naturgas, gas-fired plants are vital to guaranteeing firm energy as solar and wind developers grapple with intermittency concerns.

"I see that Latin America is betting on a very rapid transition, but also taking advantage of the natural resources it has," Murgas said in a telephone interview.  

"Natural gas will also be able to mitigate the risks associated with price volatility, for example, of other commodities such as oil, and it can provide rapid response capacity and maintain the stability of many other systems, both electrical and of course stability in peace processes, stability in processes of strategic alliances for poverty issues that concern the entire region. And most importantly, natural gas will continue to back up hydroelectric plants.

"I believe that in the face of climate change, Latin America is going to try to rush to fulfill its commitments and natural gas is going to play a very important role."

But which countries in the region are best-placed to ramp up supply of the fossil fuel?

In addition to Colombia, which is pushing ahead with plans to develop vast gas resources off its Caribbean coast, Murgas identified six countries that could help meet rising demand from within the region and beyond. 

"There are several producing countries such as Trinidad and Tobago, Mexico, Argentina, Bolivia, Peru and Brazil – which has been a producer for a long time – and together they supply around 5% of the total gas consumed in the world," said Murgas, who is preparing a bid for the International Gas Union presidency. 

"Of the total natural gas imports in Latin America and the Caribbean, 73% come from producing countries in the same region. This shows that natural gas continues to play an important role and that by 2050 it is estimated that we will still have a representation of around 20% in the matrix of all energy sources. But it is important that the countries of the region have solid institutional regulatory frameworks to be able to guarantee the efficient and sustainable use of natural gas."

She added that the sector needs to implement its own decarbonization measures to align itself with the clean energy shift. 

"Latin America is going to be fundamental in the LNG [liquefied natural gas] market but it is also going to be fundamental as a leader in the energy transition process, taking into account its socioeconomic conditions," Murgas said. 

The full interview with Murgas can be seen here and here.