Brazil LNG demand heading for record year

Market: Electricity, Natural gas
10/05/21

Brazil is on track to import a record volume of LNG this year because of persistent dry weather coupled with the commissioning of new LNG-to-power projects.

As arid conditions dragged on into April, the electricity sector monitoring committee (CMSE) cleared the dispatch of thermoelectric plants and electricity imports. Hydroelectric reservoirs in the strategic southeast/center-west grid ended April at the lowest average level since 2015. September-April rainfall was the lowest since government records began in 1931.

With dry season underway, LNG-linked thermoelectric plants were dispatched ahead of schedule last month to slow the decline of the reservoirs.

LNG demand started the year at above-normal levels, with send-out of 18.25mn m³/d in the first two months of the year, according to mines and energy ministry data. This compares to just 4.94mn m³/d in the same period of 2020 and 18.17mn m³/d in the first two months of 2015, when full-year send-out hit a record 17.94mn m³/d.

All of the January-February send-out came from two terminals operated by state-controlled Petrobras — Guanabara with 15.33mn m³/d, and Pecem 2.93mn m³/d. Petrobras recently reported total send-out of 19mn m³/d in the first quarter, up nearly 175pc on the year.

In April, thermoelectric generation soared by 37pc to 11,613MW, up from 8,492MW in April 2020, according to preliminary data from the electricity clearinghouse CCEE. Nearly all of the increase came from gas-fired power plants, with an average of 5,837MW, more than double the year-earlier average.

Shrinking role for Petrobras

Petrobras' leading role in LNG imports is starting to shrink, in line with its anti-trust commitments. The company is currently in the process of leasing its Bahia LNG terminal. Private-sector Gas Natural Acu's (GNA) 1.33GW GNA1 LNG-to-power project in Rio de Janeiro state is scheduled to begin commercial operations on 31 May. The 1.5GW Porto de Sergipe LNG-to-power project is expected to begin operating by June.

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