Energy companies in Argentina and Brazil are exploring ways to reverse the flow of a natural gas pipeline network currently sending Bolivian gas southwards.

As reported by Reuters on Monday, April 1, the shift aims to address a regional gas deficit and Brazil's growing dependence on volatile liquefied natural gas (LNG) prices.

Initial proposals to utilize Bolivian pipelines for transporting Argentina's abundant shale gas faced resistance from Bolivia. Executives familiar with the discussions say Bolivia seeks to import Argentine gas and resell it to Brazil. However, the strategy is deemed too expensive by Brazil.

"It's a commercial problem," said Mauricio Tolmasquim, chief energy transition officer at Brazil's state-controlled Petrobras, a major Bolivian gas importer. "We have to find some common ground."

Tolmasquim also told Reuters that Petrobras preferred receiving more gas from Bolivia to fill its pipelines, although Bolivia is at just 60% of the capacity. 

"If Bolivia can increase (supply) for Brazil, that would be perfect because then we can find another way to bring the gas from Argentina, (such as) building another pipeline to the south of Brazil or we can resort to LNG," he added.

Argentina, with the world's second-largest shale gas reserves, sees this pipeline reversal as the fastest and cheapest solution. However, the country must first complete domestic gas transportation projects and establish a framework for negotiating tariffs with Bolivia.

Meanwhile, Bolivia's gas exports, once a regional mainstay, are expected to decline significantly by 2029. And Brazil has made clear that Argentine gas is crucial to balance their future gas needs.

If both Argentina and Bolivia overcome logistical and commercial hurdles, Argentine gas could flow to Brazil as early as next year during Argentina's low-demand season, according to energy consultancy Gas Energy Latin America.