Latin America's LNG import trade prospects 'unclear'

The lack of gas market interconnectivity is curbing the penetration of LNG into new markets in Latin America and the Caribbean (LAC), according to a new report.

In its study, 'Fragile Equilibrium: LNG Trade Dynamics and Market Risks', the International Energy Forum (IEF) points to an “unclear” future for LNG imports in the region.

IEF highlights that LAC’s regasification capacity stands at 72Mt per annum, but that utilization in recent years has been around 25%, below the global average of 80%.

“The low utilization is due partially to seasonality and fluxes in hydropower, but the region’s low-capacity utilization also highlights the great potential for boosting LNG exports to the area,” the report reads.

Among the drivers for additional LNG offtake are its support of back-up hydro storage and intermittent renewable energy, the displacement of coal and fuel oil, and the fertilizer industry.

“Over the past two years, high prices have slowed LNG imports, but trade flows within the region are fast evolving due to massive gas upstream developments in Argentina, Brazil, and Guyana,” IEF adds.

IEF’s report is available in the Documents box in the top right corner.

BNamericas has published its latest Intelligence Series report, 'Tapping into Latin America's LNG Boom', available here.

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