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Latin America is expected to remain a net natural gas importer in the coming years and must increase its regasification capacity to ensure greater energy security, according to a report by the Uruguay-based regional association of oil, gas and biofuel sector companies (Arpel).
Electric power generation will likely be the main growth driver for natural gas demand, while sectors such as transportation also offer great potential, said the report on trends in the Latin American and Caribbean gas sector.
Natural gas currently represents 26% of the total energy matrix in Latin America, above the global average of 24%, and the fuel is expected to significantly increase its share regionally and globally over the next few decades.
Latin America produces approximately 640Mm3/d of natural gas, or 7% of global production, while consumption is approximately 700Mm3/d.
Electric power demand in the region is growing at around 3% per year, the report states.
In Latin America and the Caribbean, LNG imports represent around 74Mm3/d, with regasification capacity distributed in Brazil, Argentina, Chile, Dominican Republic, Puerto Rico and Mexico.
The region's two LNG export countries are Trinidad and Tobago and Peru.
The natural gas deficit is covered by Mexican imports through gas pipelines from the United States, and through purchases of LNG from the 12 regasification terminals existing today.
Proven natural gas reserves in the region are estimated in 282.9Tcf, concentrated mainly in Venezuela, but there is a great potential for development both in unconventional resources, and in other under-explored conventional resources, such as offshore, the report states.
Argentina leads Latin America in natural gas production and consumption, with 97.1Mm3/d and 129.2Mm3/d respectively, followed by Brazil, Uruguay, Chile and Bolivia.
"The main projects under development in the region are the south Peruvian gas pipeline (GSP), the northeastern Argentina gas pipeline (GNEA), the industrialization of natural gas in Bolivia, the increase in the regasification capacity in Chile, Colombia and possibly other countries, such as Uruguay, the development of upstream activities in Vaca Muerta, and in the offshore resources of Colombia, Venezuela and Brazil," the report states.
Mexico is also ramping up its natural gas use and plans to spend at least US$10bn in the coming years on the expansion of its pipeline network as state utility CFE converts to gas for power generation.