Brazil has authorized iron ore producer Vale to import LNG to serve its own heating demand.
Brazilian oil and gas regulation agency (ANP) will allow Vale to import LNG equal to 1.66mn m³/d (58.6mn cf/d) of regasified fuel, to be supplied by any country, by sea transport. It marks the first time Vale has requested this authorization.
LNG imports to Brazil are increasing this year as the country faces a severe lack of rainfall and constrained hydropower generation, which makes up 65pc of Brazilian installed power capacity. Until recently, companies in Brazil typically bought gas directly from state-controlled Petrobras. But as the country opens its gas market and the hydropower crisis worsens, authorizations to import LNG from external sources may become more frequent.
The country regasified an average of 17mn m³/d of LNG in the January-April period this year, compared with an average of 8.28mn m³/d in 2019 and 8.38mn m³/d in 2020, according to Ministry of Mines and Energy data.
In June Petrobras was authorized to increase LNG imports by 50pc to 30mn m³/d.
Gas-fired power generation has gained more importance in Brazil this year as a result of hydropower generation restrictions, absorbing a larger share of Brazilian gas production. Brazil's gas output averages 57mn m³/d, with an additional average of 59mn m³/d reinjected into oil and gas wells.
