RIO DE JANEIRO, BRAZIL – Brazil needs natural gas so severely that it has asked Argentina for help in securing fuel supplies from abroad.
Brazil has increased imports of liquefied natural gas (LNG) to run power plants during a water crisis that reduces hydroelectric power generation. According to ship-tracking data, LNG imports from Brazil hit a record high this month, which also further tightens the global gas market, whose spot prices have risen to new highs.
Read also: Check out our coverage on Argentina
According to operators with knowledge of the matter, Argentina announced a tender for LNG seeking four shipments to the Escobar terminal, which will be regasified and delivered by pipeline to Brazil.
The gas will supply the Uruguaiana plant, which was shut down more than a decade ago and only operates for intermittent periods to alleviate supply shortages, operators said.
Energy prices are rising worldwide amid limited supply and rapid growth in demand after the pandemic constraints.
In Brazil, low reservoir levels in the Parana River basin have reduced hydroelectric power generation and led utilities to rely on gas, increasing the need to import expensive spot LNG shipments.
Argentina exports domestically produced natural gas to Brazil, but it is rare to import LNG to deliver the fuel to its neighbor.