LNG investors eye integrated solutions in Latin America

Integrated solutions are emerging as the focus of LNG investors in Latin America, as major companies are starting to look to the region to increase their footprint.

During a webinar on Tuesday, Kenna Bravo, an LNG specialist at GNL Global, said investments for developments with both FSRU units and gas-fired thermopower plants, for example, appear attractive.

“The best way to optimize the investments is to develop more than just a regasification terminal, for example, so this can reduce significantly the general cost of investments,” according to the expert.

LNG trade has been historically concentrated in the Asian market but Latin America and the Caribbean now correspond to the third-largest market. Bravo believes the region has more room for gas power generation and LNG-to-power projects, and it presents opportunities for partnerships. 

Brazil will consolidate as the main importer in the region. The country has also the largest LNG project, the 1.5GW Porto de Sergipe LNG-to-power plant.

Other large projects under development in the region include Argentine state company YPF's plans to build a US$5bn liquefaction terminal for natural gas exports, which would give the country access to large global importers. Moreover, Bolivia will export LNG through Argentine ports and will invest over US$200mn in the regasification terminals of Bahía Blanca and Escobar.

Chile approved in 2019 the US$165mn Penco Lirquén LNG terminal, and Colombia has greenlighted the US$300mn Pacific LNG terminal. This year, Ecuador will be launching a tender for developers for a 500MW combined cycle power plant.

GNL's Bravo believes that the main investment challenges relate to government support, in the form of solid regulations, and difficulties to acquire financing. Political risk and lack of infrastructure are also challenging, as many countries have limited internal gas infrastructure.