ARPEL has recently launched the reports entitled “How Will the New Law Transform the Gas Market in Brazil and the Region?” and “Vaca Muerta: Investment and Energy Policies to Accelerate Development”, which were prepared based on the first and second deliveries of the Digital Dialogs 2021 series.

This initiative is part of the Latin America & Caribbean Gas Conference, an event that has been held since 2018 jointly by ARPEL, the International Gas Union (IGU) and EnergyNet, with the support of the Latin American Energy Organization (OLADE).

The purpose of these dialogs is to promote the development of natural gas as an energy that reduces emissions, contributing to energy transformation and boosting economic recovery in the Region, through dialog between companies, governments and other stakeholders.

In the first edition, held in May under the title “How Will the New Law Transform the Gas Market in Brazil and the Region?”, the speakers were: Alfonso Blanco, Executive Secretary of OLADE; Aldo Barroso Cores Junior, Director of Natural Gas of the Brazilian Ministry of Mines and Energy; Heloisa Borges, Managing Director of Oil, Gas and Biofuels Studies at EPE; Edmar Fagundes de Almeida, Researcher at UFRJ; Sylvie d’Apote, Director of Natural Gas at IBP; Pablo Erias, Commercial Manager of TGN, and Guilherme Gonçalves, Consultant at IHS-MARKIT, both ARPEL member companies.

Law No. 14134, known as “The New Gas Law,” passed in Congress in April 2021, seeking to build a competitive market from a monopoly scenario.

The conclusions from the Report highlight that Brazil is facing the challenge of balancing a rigid gas supply, associated with oil, with a flexible demand, associated with the backup electric power generation from hydroelectricity. Therefore, Brazil will continue to be an importer in the short and medium term, opening up good opportunities for LNG, the development of domestic supply and regional integration.

One of the main messages of the Report refers to the fact that the maturity of Vaca Muerta and an expected growing demand in Brazil are opening new possible regional integration schemes between these two countries, through Bolivia.

The second delivery of this series of digital dialogs took place in June and focused on “Vaca Muerta: Investment and Energy Policies to Accelerate Development.”

In this edition the speakers were: Verónica Tito, Legal Advisor at the Undersecretary of Hydrocarbons for the Ministry of Economy’s Secretariat of Energy; Gabriela Aguilar, General Manager Argentina and VP South America of EXCELERATE; Jorge Ciacciarelli, Independent Consultant and former Executive Secretary of ARPEL; Ceferino Ángel Di Camillo, Commercial Planning Manager of TECPETROL; Pablo Erias, Commercial Manager of TGN, and Patricio Da Re, Manager of Strategy, Business Development and Investee Management, G&E Vice-Presidency of YPF, the three member companies.

The GasAr Plan, established by Decree 892/2020, defined a contracting scheme that made the demand for natural gas certain, with a four-year time horizon, aiming at boosting investment and the search for new business development opportunities.

The report highlights the fact that there are investment needs in gas transport infrastructure in the very short term to continue developing Vaca Muerta, particularly towards the central and northern region of Argentina.

It also points out that Brazil and Chile are great opportunities as regional destination markets for the Vaca Muerta gas, so it is necessary to develop a transport infrastructure but, above all, to strengthen the regional integration of the Southern Cone energy markets in order to optimize gas flows and the use of infrastructure.

Another of the key messages included in this document is that developing regional markets would also facilitate a better integration of Vaca Muerta with global LNG markets, which are increasingly more liquid and integrated and in full development at the regional level.

As a conclusion, the development paths referred to throughout the Report include many investment alternatives, so it is necessary to have a comprehensive view of the Vaca Muerta development that is properly combined with the energy policy, the climate policy, and decarbonization commitments.

Both Reports are available in Spanish and English.

Link to download the Digital Dialog Argentina document: https://arpel.org/library/publication/529/

Link to download the Digital Dialog Brazil document: https://arpel.org/library/publication/528/