Houston — Imports of liquefied natural gas to Brazil rose 28% during 2014, totaling 13,472,255 cubic meters, a new annual record high, up from 10,514,012 cu m during the year prior, data from Platts unit Bentek Energy showed Tuesday.
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Rising LNG imports to Brazil come as the tropical nation faces its worst drought in recorded history, according to Sabesp, the agency for basic sanitation services of Sao Paulo.
Brazil relies on hydroelectric dams for upwards of 75% of its total domestic power generation under normal climatic conditions, according to Brazil's Ministry of Mines and Energy.
During 2014, the Southeast-Midwest region, where 70% of the nation's hydroelectric capacity is installed, saw reservoir levels decline to just 16.0% of capacity by November, down from 40.3% capacity in January, according to data from the National Electric System Operator. As of Tuesday, data for December was not yet available.
During the recent drought, state-owned oil and gas company Petrobras has shored up the nation's energy supply with increased imports of natural gas, both in its liquefied form and through pipeline imports from Bolivia, which were up an average 4.3% year on year through September, the most recent ministry data showed.
IMPORTS PRIORITIZE NORTHEAST
The majority of LNG sent to Brazil in 2014 arrived at regasification terminals in the Northeast, a first since the country began imports in 2008. Pecem Regas, located near Fortaleza, Ceara, imported a total of 2,164,329 cu m during the year, Bentek said. The Bahia Regasification Terminal, located in Salvador, Bahia, imported a total of 4,743,124 cu m during 2014. Together, the two Northeast terminals imported 51.3% of the volume.
Since 2009, the regasification terminal at Bahia de Guanabara in Rio de Janeiro state has typically imported the largest share of the volume, receiving an average 62% of all LNG imported by Brazil since 2009.
While the inauguration of the Bahia Regasification Terminal has allowed Brazil to increase imports to the Northeast, the recent drought has also restricted capacity along the Gasene pipeline, which normally allows for the transport of up to 20 million cu m/d of gas from the Southeast to the Northeast.
As drought conditions intensified during late 2014, 100% dispatch of gas-fired thermal plants in Brazil's Southeastern states restricted flows along the regional transport pipeline, prompting Petrobras to accelerate LNG imports to the Northeast, most notably leading up to and during the fourth quarter.
SHIFTING SUPPLY SOURCES
Atlantic Basin suppliers continued to export the lion's share of LNG to Brazil in 2014. However, in the tropics, African nations led by Nigeria displaced Trinidad and Tobago as the largest supply source. In the North Atlantic, a dramatic growth in exports was seen from Northern European nations, while re-exports from Southern Europe saw more modest growth.
Nigeria, the single largest supplier to Brazil in 2014, sent 3,346,944 cu m during the year, up from 63.2% from 2,050,600 cu m exported during the year prior. Equatorial Guinea sent 820,000 cu m, after sending no imports to Brazil in 2013. Exports from Angola were unchanged at 160,500 cu m.
In Europe, exports from Norway, Belgium and the Netherlands totaled 2,949,200 cu m, up 242% from exports of 861,806 cu m during 2013. Southern European exports from Spain, Portugal and France totaled 2,002,470 cu m during 2014, up less than 2% from 1,965,006 cu m exported to Brazil during the year prior.