Contents

Introduction

Latin America's demand for liquefied natural gas (LNG) is rising as countries increase their use of natural gas, which includes greater gas-fired generation capacity to complement renewables use. There has also been a general inability on the part of many countries to increase domestic production of natural gas, meaning LNG has become the option to shore up security of supply.

LNG demand growth requires infrastructure expansion, both for domestic and inter-country distribution.

Latin America is expected to benefit from the fact that the US now can export LNG, along with new LNG terminals and export facilities planned to be built in Texas, taking advantage of new gas finds in the US state. NextDecade announced in January 2017 it would develop an LNG export terminal at Shoal Point, and is developing the Rio Grande LNG project in south Texas. 

Global LNG imports totaled 289.8 million tonnes (Mt) in 2017, up 9.9% on 2016, the strongest increase since 2010, according to the International Group of Liquefied Natural Gas Importers (GIIGNL). Imports into the Americas increased by 4.4% y-o-y, where growth was led by Mexico, due to constraints on pipeline imports from the US as a result of damage caused by hurricane Harvey.

Argentina's LNG imports in 2017 dropped by 0.1Mt as the country's domestic output rose.

Mexico is the largest Latin American LNG importer, buying 4.78Mt in 2017, followed by Argentina with 3.35Mt, Chile with 3.27Mt, Brazil with 1.62Mt, while Puerto Rico imported 0.94Mt. The latter signed a four-year import contract with the US in 2017, for annual shipments of 1.47Mt.

Peru and Trinidad and Tobago are Latin America's only LNG exporters, but their shipment volumes declined by 7.4% and 2.6% respectively during 2017. The two countries are also the only Latin American countries with liquefaction facilities. Peru has 260,000m3 in capacity and Trinidad and Tobago with 524,000m3.

Policy, new technology and international relations will shape the development of Latin America's LNG market going forward. Until the region's countries can develop their own gas resources, imports will remain a crucial way to meet domestic demand. This report goes into further detail. Meanwhile the below chart provides insight from BNamericas' annual survey into the way costly LNG import projects are perceived in the region:

Figure: Perceptions of LNG
[GRAFICO:FIGURA:ID_1144]

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