Brazil Mulls Reversal of Gas Pipeline to Import Gas from Argentina's Vaca Muerta

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Brazil Mulls Reversal of Gas Pipeline to Import Gas from Argentina's Vaca Muerta

Brazil on the map (© Shutterstock/hyotographics)
Brazil on the map (© Shutterstock/hyotographics)

Brazil is exploring ways to import natural gas from Argentina's Vaca Muerta shale formation, including a potential reversal of a pipeline currently used for Bolivian gas, Mines and Energy Minister Alexandre Silveira said Thursday, March 21. 

Brazil’s plan comes as the country struggles to meet rising domestic gas demand, leading to increased reliance on liquefied natural gas (LNG) imports despite being Latin America's top oil producer.

Traditionally, Brazil relied heavily on Bolivian gas. However, declining Bolivian output forced a renegotiation of supply contracts with state-controlled Petrobras late last year. The new agreement extends the timeframe for Bolivia to complete deliveries.

Argentina, meanwhile, plans to stop importing gas from Bolivia this year when a domestic pipeline becomes operational, transporting shale gas from Vaca Muerta to the north of the country.

Brazil is encouraging both Bolivia and Argentina to reverse the flow of the existing gas pipeline to allow utilization of the existing infrastructure to deliver Vaca Muerta gas to Brazil's northern regions.

"That gas would be crucial for Bolivia's energy security," Silveira told Reuters, highlighting how the reversal could help the Andean nation offset its dwindling reserves.

Brazil is also exploring alternative gas transportation routes through Uruguay and Paraguay while promoting increased domestic onshore gas production.

With oil output from its prolific presalt region expected to plateau soon, Brazil is seeking new frontiers for oil production, including the environmentally sensitive Equatorial Margin. 

Although Silveira stressed the potential risks of not drilling Equatorial Margin, Petrobras' plans have been hampered by a lack of environmental permits.

Looking ahead, Minister Silveira is preparing to participate in the upcoming OPEC+ meeting in June, where he intends to discuss the energy transition during the meeting, emphasising Brazil's leadership in advocating for stricter regulations and a global biofuel alliance. 

Brazil joined OPEC+ as an observer in January 2024.

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