Brazilian natural gas market participants are increasingly looking to Argentina, which is surpassing Bolivia as Latin America's main exporter.
The Argentinian government has authorized TotalEnergies, Argentina's Tecpetrol and independent Pan American Energy (PAE) to export to Brazil. The first will sell to its subsidiary in Brazil — which also obtained Brazilian regulator ANP's permission to import gas from Argentina — while the other two will sell to trading companies in Brazil.
Those licenses are set to operate from Argentina to Brazil through Bolivia's existing infrastructure connecting the three countries, which is considered to be the most practical route for now. Argentina's state-owned YPFB is lobbying Brazil and Argentina to lease their respective gas transport infrastructure to move gas from Argentina's Vaca Muerta shale cluster, which holds an estimated 308 Tcf of gas, according to the US Energy Information Administration, to Brazil.
The shale formation in Argentina's Neuquen province is connected to Bolivia and Brazil by the northern Gasoducto Norte pipeline and the Bolivia-Brazil pipeline. On the Argentina side an effort to reverse the pipeline flow is in motion. The agreement allowing Bolivia to supply gas to Argentina ends in September.
When Vaca Muerta gas is converted into LNG, PAE has an edge, as its floating natural gas liquefaction unit (FLNG) and export terminal has set up a joint venture with FLNG owner Golar.
"[The LNG] route would allow for more flexibility on small-scale and spot operations," said Gerardo Rabinovich, director of Argentina's state-owned Empresa Medocina de Energia (Emesa) and vice-president of the country's General Mosconi energy institute.
Other pipelines in place include one connecting Agentina's Paso de los Libres to Brazil's Uruguaiana before heading to Rio Grande do Sul state's capital Porto Alegre. But that option would require more infrastructure investment than the Brazil-Bolivia pipeline.
A fourth path is a less likely pipeline connecting Argentina, Paraguay and Brazil, which would cost $7.5bn, according to consulting firm Rystad Energy. Paraguay's industry and trade minister Javier Gimenez visited Mato Grosso do Sul state in Brazil to discuss the project earlier this month.
The proposed line would follow the bioceanic corridor, a road for transporting cargo connecting the Atlantic and Pacific oceans that already has an environmental license. This alternative would jibe with Paraguay's goal of developing an industry park.
