Collaboration between Latin American countries and infrastructure planning are important to help boost LNG exports in the region and beyond.
But the region also needs the right signals to be able to monetize the resource, delegates heard at the CERAWeek by S&P Global conference in Houston, Texas.
There is around 100mn t/yr of LNG export potential in Latin America in the next decade coming from Mexico, Argentina, Trinidad and Tobago and Guyana, according to Sarah Bairstow, president and chief commercial officer at Mexico Pacific.
Mexico Pacific is developing an LNG project with a capacity of 15mn t/yr of LNG on the west coast of Mexico. The firm is targeting LNG exports and also has an alliance with state-controlled company CFE to supply gas. "The west coast of Mexico has abundance of gas and we had to leverage the fundamentals to create certainty in the market and guarantee value for the region," she added.
Argentina has a huge opportunity to become an LNG hub given its vast resources at its Vaca Muerta field that that has 308 Tcf in natural gas, according to the US Energy Information Administration. "The [Argentinian] government has noticed this and infrastructure is being built," Pan American Energy vice president Rodolfo Freyre said. Around 50pc of natural gas production in Argentina comes from shale gas at Vaca Muerta, Freyre added.
Support from the Argentinian government is essential to develop LNG projects in the country and all the political parties have agreed that the energy sector is key for the country's economy, he added.
Companies like YPF, Malaysia's Petronas and Tecpetrol have shown interest in developing LNG infrastructure for exports. They are waiting for approval of a law that would allow for 30-year contracts to export LNG and tax incentives for large-scale investments, such as LNG export terminals.
Collaboration between countries in the region is also key to make LNG projects economically viable, delegates heard. Freyre pointed out a potential collaboration between Argentina and Brazil for LNG exports, as the latter's demand for natural gas will continue to increase in the coming years. But Petrobras chief energy transition executive and sustainability officer Mauricio Tolmasquim prioritized the use of existing pipeline infrastructure for natural gas exports from the southern cone.
"LNG from Argentina to Brazil doesn't make sense. We have a pipeline between Brazil, Bolivia and Argentina which makes more sense to use as the infrastructure is there," he said.
US LNG pause an opportunity
The US government's temporary pause on new LNG export licenses creates an opportunity in Latin America as customers are looking more broadly for the gas to meet their demands, Bairstow said.
"We are watching closely the pause by the US on LNG. It impacts around 16mn t worth of our US LNG projects," she said, adding that around 200mn t of new LNG capacity is needed by 2050 which makes Latin America and other regions such as Qatar an immense alternative for new projects.
But Freyre disagrees that the US pause is spurring development in Argentina as the country was already increasing production from its vast resources at the Vaca Muerta field, which is enough to boost LNG exports.
"LNG is here for us. It is the option that Argentina has to put economic value to its resources and deal with its economic issues," he said.
