Reports related to this article:
Project(s): View 3 related projects in PECWeb
Released May 09, 2023 | SUGAR LAND
en
Researched by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--A report by Wood Mackenzie suggests that Latin America could double its net gas imports as demand increases and countries experience production declines.
Wood Mackenzie highlighted in its "Natural Gas Resources in Latin America" report that the region could increase its natural gas imports by 2035 between 7 to 12 billion cubic feet per day (Bcf/d) to meet demand.
According to the company, last year, the region imported 4.9 Bcf/d, while in 2023, Wood Mackenzie forecasts gas imports at 5.2 Bcf/d. Additionally, it expects that the demand for natural gas in Latin America will increase by 1.4% per year in the next decade, and it will stabilize at 25 Bcf/d, while regional gas supply is projected to decrease at a rate of 5.6% during that same period.
"We forecast that supply will be unable to close the gap with increased demand," highlighted Adrian Lara, analyst for Latin America upstream oil and gas for Wood Mackenzie. "This could potentially be mitigated with new gas developments or yet-to-find resources, but there are significant challenges with infrastructure restrictions and unfavorable exploration incentives. The likely result will be a steady increase of imports in the region."
Countries such as Bolivia and Colombia could face significant challenges as they see their output and reserves decline. Bolivia, for example, has registered lower natural gas outputs since 2014. The South American nation is an exporter of natural gas, though it could lose that status if its output continues to decline.
Meanwhile, Colombia has only 8.7 years of hydrocarbon reserves at current production levels. Moreover, the government is restricting any new exploration contracts as it focuses on renewable energies. As a result, Colombia may have to deal with stagnant production and depleting reserves while its demand for natural gas increases.
On the other hand, nations such as Argentina and Venezuela could benefit from the increase in demand and restricted supply of natural gas.
Argentina has seen stable production of natural gas as it develops Vaca Muerta, the second-biggest gas shale reservoir in the world. Over the last few years, shale production has been representing a larger share of the nation's output, and it can continue increasing in the near future.
Additionally, the nation is working to expand its offshore natural gas production by constructing the Fenix project in the Tierra de Fuego province. All these developments are going in hand with the construction of midstream infrastructure to ease bottlenecks caused by higher production of natural gas. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipeline and Production project databases can click here for Fenix project reports.
Venezuela, meanwhile, has massive natural gas reserves estimated at 200 trillion cubic feet, according to the U.S. Energy Information Administration. Nevertheless, the nation's energy industry is suffering due to a lack of investments, maintenance, and sanctions. It requires considerable development to become a significant natural gas producer.
"As many countries shift away from oil and coal in favor of gas to support the energy transition, demand will continue to grow in the next decade," said Lara. "For Latin America countries, the challenge will be meeting this demand while their own production declines."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Wood Mackenzie highlighted in its "Natural Gas Resources in Latin America" report that the region could increase its natural gas imports by 2035 between 7 to 12 billion cubic feet per day (Bcf/d) to meet demand.
According to the company, last year, the region imported 4.9 Bcf/d, while in 2023, Wood Mackenzie forecasts gas imports at 5.2 Bcf/d. Additionally, it expects that the demand for natural gas in Latin America will increase by 1.4% per year in the next decade, and it will stabilize at 25 Bcf/d, while regional gas supply is projected to decrease at a rate of 5.6% during that same period.
"We forecast that supply will be unable to close the gap with increased demand," highlighted Adrian Lara, analyst for Latin America upstream oil and gas for Wood Mackenzie. "This could potentially be mitigated with new gas developments or yet-to-find resources, but there are significant challenges with infrastructure restrictions and unfavorable exploration incentives. The likely result will be a steady increase of imports in the region."
Countries such as Bolivia and Colombia could face significant challenges as they see their output and reserves decline. Bolivia, for example, has registered lower natural gas outputs since 2014. The South American nation is an exporter of natural gas, though it could lose that status if its output continues to decline.
Meanwhile, Colombia has only 8.7 years of hydrocarbon reserves at current production levels. Moreover, the government is restricting any new exploration contracts as it focuses on renewable energies. As a result, Colombia may have to deal with stagnant production and depleting reserves while its demand for natural gas increases.
On the other hand, nations such as Argentina and Venezuela could benefit from the increase in demand and restricted supply of natural gas.
Argentina has seen stable production of natural gas as it develops Vaca Muerta, the second-biggest gas shale reservoir in the world. Over the last few years, shale production has been representing a larger share of the nation's output, and it can continue increasing in the near future.
Additionally, the nation is working to expand its offshore natural gas production by constructing the Fenix project in the Tierra de Fuego province. All these developments are going in hand with the construction of midstream infrastructure to ease bottlenecks caused by higher production of natural gas. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipeline and Production project databases can click here for Fenix project reports.
Venezuela, meanwhile, has massive natural gas reserves estimated at 200 trillion cubic feet, according to the U.S. Energy Information Administration. Nevertheless, the nation's energy industry is suffering due to a lack of investments, maintenance, and sanctions. It requires considerable development to become a significant natural gas producer.
"As many countries shift away from oil and coal in favor of gas to support the energy transition, demand will continue to grow in the next decade," said Lara. "For Latin America countries, the challenge will be meeting this demand while their own production declines."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
