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Scant pipeline infrastructure and a growing natural gas deficit will drive LNG demand in Latin America over the short and mid-term, a consultant has told BNamericas.
Despite plans to ramp up gas production in Brazil and Argentina, the region's future supply-demand balance hinges largely on developments in Bolivia, according to Leigh Bolton, the founder of UK-based energy advisory firm Holmwood Consulting Limited.
"LNG has traditionally only been imported in Brazil during the dry season when the country needs gas-fired power generation," Bolton said in a telephone interview. "Chile is different. Gas-fired generation is a growing part of the electricity mix, especially in the north.
"Each country is different. Chile has begun importing LNG and talking about reversing the direction of its pipelines across the mountains to feed regasified LNG into Argentina. But the continuation of that will depend on whether Bolivia honors and renews its supply agreements. If Bolivia says it's going to deliver what it said it would and develops new onshore fields, demand for LNG imports in the region will fall."
While investments in renewable power sources could ease the region's hydropower dependence, natural gas-fired generation will remain vital due to the intermittent nature of solar and wind energy, according to Bolton.
"Every country in the world that has implemented solar and wind projects also has gas-fired power generation," Bolton said. "If somebody comes up with a sensible, commercial electricity storage or battery/fuel cell solution in which electricity can be stored over long periods of time in bulk, that's a different argument. But I don't see anything on the horizon."