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Carlos M. Bechelli Destileria Argentina de Petroleo S.A. Buenos Aires Roberto D. Brandt Ecoenergia S.A. Buenos Aires
The development of a regional natural gas market in southern Latin America based on a common pipeline network is a clear possibility in the medium term.
It is, therefore, important to summarize precisely the present status and outlook for the natural gas industry in Argentina, Brazil, Bolivia, Chile, Uruguay, and Paraguay (Fig. 1).
Latin American gas
The international gas industry has shown an extremely dynamic evolution during the past 3 decades as a result of energy policies oriented towards supply diversification in general and oil substitution in particular.
Latin America has participated in this trend with the development of natural gas production at a commercial scale in ten countries: Argentina, Bolivia, Brazil, Colombia, Chile, Ecuador, Mexico, Peru, Trinidad and Tobago, and Venezuela. Venezuela, Mexico, and Argentina are by far the largest producers, accounting for more than 76% of the gross volumes produced in the region in 1990, whereas Bolivia is the sole major exporter.
Taking into consideration that Mexico has only marginally exported natural gas to the United States in the past, while Venezuela reinjects important volumes and is relatively far from potentially significant consumption centers, the development of a Latin American regional market appears closely related to the future evolution of supply and demand in the zone of influence of Argentina and Bolivia.
The international oil and gas trades differ substantially. In the case of oil, relatively low costs and operational flexibility result in the existence of a world market with "instantaneous exchange" around 48% of total commercialized production. In the case of natural gas, high transportation/distribution costs and operational rigidity only allow international trade to develop on a regional scale, with "long-term exchange" of 14.9% of total commercialized production (76.6% by pipelines and 23.4% by LNG carriers).
In 1990, 53 of 58 existing export/import operations were directed towards four regional markets: North America (with the United States as major importer), Western Europe, Eastern Europe, and Eastern Asia (with Japan furnishing most of the demand).
The remaining operations involved Bolivia/Argentina, Algeria/Tunisia (gas "in transit" to Italy), Iraq/Kuwait, Sharjah/Dubai, and Sharjah/ United Arab Emirates. They represented only 2.8% of international gas trade.
Geographical limitations as a result of freight constraints tend to encourage bilateral agreements and vertical integration between exporters and importers. Therefore, future developments might result in the gradual creation of a fifth regional gas market in southern Latin America, comprising the countries shown in Fig. 1.
Southern Latin America
The following sections describe current natural gas supply and demand in Argentina, Brazil, Bolivia, and Chile. Potential projects in these countries, plus Uruguay and Paraguay, are also covered. From this, the prospects and scope of eventual regional integration with pipeline networks can be put in perspective.
Table 1 gives natural gas reserves in the countries under analysis, as of Dec. 31, 1990. The figures for Chile are as of Dec. 31, 1989. …