Drought-stricken Brazil to tap a tight LNG market

Brazil

BRASíLIA, August 14, 2024 – Brazil is looking to import greater volumes of LNG in the coming months as drought depletes its hydropower capacity, Bloomberg reported on Wednesday.

The new demand will hit already stretched global LNG supplies, clashing with demand from Asia and Europe.

Brazilian energy suppliers, NOC Petrobras among them, are seeking six LNG cargoes for September delivery, the report cited traders as saying.

The impact of the shift to gas-fuelled power is expected to drive an increase in power prices.

A parallel situation is being faced in neighbouring countries, such as Colombia, which has ramped up LNG imports to boost gas-fired power generation, National Hydrocarbons Agency president Orlando Velandia Sepúlveda told The Energy Year earlier this month.

“Given the El Niño phenomenon, we have needed thermally generated energy to make up for the drop in hydroelectric generation while water was scarce,” Velandia Sepúlveda said. “This made it necessary to increase LNG imports and led to higher electricity costs.”

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