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At a Glance: LNG trade in the Americas

Bnamericas Published: Thursday, April 09, 2020
At a Glance: LNG trade in the Americas

The global health crisis and its associated downward pressure on economic activity has thrown a wrench into short-term energy planning, as stakeholders implement measures to address the challenges.

The scope of potential changes to medium- and long-term roadmaps will depend on how long COVID-19 drags on and its impact on pre-coronavirus movement, such as global gas trade.

A few weeks before the World Health Organization declared the disease outbreak a pandemic on March 12, Shell released its annual LNG outlook and highlighted how global demand for the fuel is expected to double to 700Mt (million tonnes) by 2040.

At the launch of the forecast, Shell’s integrated gas and new energies director Maarten Wetselaar said: “While we see weak market conditions today due to record new supply coming in, two successive mild winters and the coronavirus situation, we expect equilibrium to return, driven by a combination of continued demand growth and reduction in new supply coming on-stream until the mid-2020s.”

This week, The International Group of Liquefied Natural Gas Importers (GIIGNL) said that global LNG imports in 2019 grew 13% to 355Mt, the highest rate of growth since 2010.

THE AMERICAS

In Latin America and the Caribbean, imports totaled 14.3Mt last year compared with 15.2Mt in 2018, according to a review of GIIGNL data.

The dip would be due to reduced deliveries to Argentina and Chile, down 53.7% and 20.0%, respectively, offset by a 168% increase in shipments to Panama.

Last year, underpinned by the shale gas boom in the Vaca Muerta formation, Argentina began exporting LNG using Exmar’s Tango floating liquefaction unit which is leased to the country’s state oil company YPF.

Read YPF completes new LNG shipment amid lockdown pressures on demand

For its part, Chile has partially replaced LNG imports with more competitively priced piped gas from Argentina.

Read Argentine gas exports to Chile open up long-term opportunities

LNG deliveries to Panama, meanwhile, have increased with the ramp-up of AES Colón’s regasification terminal and associated 381MW gas-fired plant, which came online in 2018.

GIIGNL also puts the spotlight on Brazil, where LNG imports grew 24.5% and the 1.5GW Porto de Sergipe I plant, which will be part of Latin America’s largest LNG-to-power project.

The Energía Costa Azul liquefaction project in Mexico is another planned development on the industry group’s radar.

And GIIGNL metrics reveal the Caribbean’s migration toward greater penetration of gas in the energy mix, with LNG imports to the Dominican Republic, Jamaica and Puerto Rico up 26.9%, 37.6% and 21.6%, respectively, in 2019.

GIIGNL president Jean-Marie Dauger said that “to allow natural gas to penetrate new markets, prices need to remain at levels that make gas competitive with alternative fuels in downstream power and gas markets but, at the same time, support the significant investments needed in production, liquefaction, transportation, transmission and downstream infrastructure.”

Read LNG investors eye integrated solutions in Latin America

LNG imports in 2019 (Credit: GIIGNL)

Pictured: Tango floating liquefaction unit at the Argentine port of Bahía Blanca (Credit: Exmar)

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