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Latin America's LNG market faces muted outlook

Wednesday, May 24, 2017

Subject

The outlook for the LNG market.

Significance

With major oil and gas reserves, and around 5% of global GDP, South America might in theory be expected to play an important role in the global liquefied natural gas (LNG) business. It both produces and consumes LNG, but the factors affecting LNG production and consumption are national and global rather than primarily regional. In global terms, the region is neither a major producer nor a large market.

Impacts

  • With no new LNG production or export facilities currently announced, the region will not become a major producer soon.
  • The Panama Canal will play a key role in facilitating LNG trade around the region and globally.
  • For countries lacking material gas production, for example Chile, LNG will continue to be a key energy source.
  • Growing gas production in Brazil and Argentina over the medium to long term may increasingly relegate LNG consumption.
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