On May 6, the first of a series of digital dialogs organized for the Latin America & Caribbean Gas Conference took place, focusing on how the new law will transform the gas market in Brazil and the region.

This cycle is organized by IGU (Unión Internacional del Gas), Olade (Organización Latinoamericana de Energía) and ARPEL, supported by Energy Net.

The panel was made up of Aldo Barroso Cores Junior, Director of the Natural Gas Department of the Brazilian Ministry of Mining & Energy; Pabo Erias, Commercial Manager at ARPEL’s partner TGN; Heloisa Borges, Head of Oil, Gas and Biofuel Research at EPE (Empresa de Pesquisa Energética); Sylvie d´Apote, Head of the Natural Gas Department at IBP; Edmar Fagundes de Almeida, from the School of Economics of the UFRJ, and Guilherme Goncalves, a consultant specialized in the Brazilian gas market from another ARPEL’s partner, IHS-Markit.

The moderator was Alfonso Blanco, Executive Secretary at Olade.

ARPEL’s acting Executive Secretary Miguel Moyano was in charge of welcoming the audience. He pointed out that: “These activities seek to contribute to the regional energy agenda and the development of natural gas as an alternative to decarbonize economies and generate wealth. To do this, we have gathered first-line professionals from government institutions, international entities, public and private companies, associations from the sector, and academics to discuss topics such as energy and climate policies, investment opportunities, infrastructure projects, and the development of the gas market.”

The Ministry of Mining and Energy said that the New Gas Law and the regulatory changes seek to promote competence and investment in order to reduce prices and streamline the economy. “Transformation takes time, and we still need to work on regulatory aspects, although the first effects can already be seen,” said Barroso Cores Junior.

In turn, Erias claimed that Vaca Muerta is a stable, extensive, and competitive offer that could be leveraged by the Brazilian market. He mentioned three important projects under analysis: Uruguayana-Porto Alegre Pipeline; Neuquén-Mendoza TGN Reinforcement, and the new Mendoza-Córdoba gas pipeline, as well as the possibility to physically inject gas to Bolivia.

Borges remarked that EPE research has identified potential investments, for example, of more than US$ 10 billion, to develop over 6,000 km of transport gas pipelines, several routes to bring offshore gas to the continent, and LNG investments that would provide flexibility.

According to IBP, the business sector considers the new Gas Law as a positive shift, since it will encourage new players in the market to get involved, both at the pre-salt layer and at the new frontier in Sergipe.

Fagundes de Almeida remarked that we are facing the challenge of equalizing a flexible demand with an inflexible offer. “We need to find creative mechanisms to respond to the gas demand from thermal power stations in order to reduce the varying demand in Brazil within the context of a deregulated market, allowing offer monetization and infrastructure construction,” he said. “Regional integration opportunities are linked to the ability to provide flexible offers to respond to the variable demand of the Brazilian market,” he added.

Finally, Goncalves, from JHS-Markit, pointed out that natural gas imports from Bolivia will continue to be important, and that the challenge for Brazil is the varying power generation demand, since it relies on the water cycle. Therefore, he said that LNG is relevant because it provides flexibility, creating favorable conditions for imports under the current circumstances.

“Due to its size and regional impact, the Brazilian market streamlines the region integration, opening opportunities for infrastructure development and the transformations required for market integration,” Alfonso Blanco de Olade concluded.