According to the report “Natural Gas Resources in Latin America,” Wood Mackenzie forecasts that gas demand in the region will grow at an average annual rate of 1.4% over the next decade, stabilizing at around 25 bcfd. With natural gas supply expected to decline at a rate of 5.6% over the period, the region will face challenges.
“We forecast that supply will be unable to close the gap with increased demand,” said Adrian Lara, principal research analyst, Latin America upstream oil and gas for Wood Mackenzie. “This could potentially be mitigated with new gas developments or yet-to-find resources, but there are significant challenges with infrastructure restrictions and unfavorable exploration incentives. The likely result will be a steady increase of imports in the region.”
With Latin America’s growing natural gas deficit, imports could range between 7-12 bcfd by 2035 to meet demand. In 2022, net imports were 4.9 bcfd, and Wood Mackenzie’s 2023 forecast projects 5.2 bcfd.
Countries in the midcontinent will be most challenged with gas integration, while countries like Argentina, with its strong reserves, may find opportunities to supply neighboring countries.
“Colombia’s gas production needs to offset declines of at least 300 million MMcfd by 2030 or else it will require a higher level of gas imports. Venezuela has a significant amount of undeveloped gas resources in the Mariscal Sucre offshore assets, estimated at 13.6 trillion tcf, and some of which could be jointly developed with Trinidad and Tobago. Peru also has discovered undeveloped resources in the Camisea region accounting for approximately 3.7 tcf. The question remains which of these resources can become more attractive to operators, and whether the infrastructure and market restrictions can be overcome in a timely manner,” Lara said.
Contingent resources are equal to 80% of remaining reserves in Latin America, Wood Mackenzie said.
“As many countries shift away from oil and coal in favor of gas to support the energy transition, demand will continue to grow in the next decade,” said Lara. “For Latin America countries, the challenge will be meeting this demand while their own production declines.”