HOUSTON, Sept 24 (Reuters) - Brazil's imports of liquefied
natural gas (LNG) are set to hit a record in September, data
from Refinitiv and consultancy Kpler shows, as U.S. cargoes
normally meant for Europe are diverted to the Latin American
nation to address a power shortage.
The worst drought in almost a century has starved the
hydropower plants that normally supply nearly two-thirds of
Brazil's electricity. The country has, as a result, turned to
U.S. gas to keep its lights on, with its LNG purchases helping
drive global gas prices to record levels.
"The strong demand from Brazil means there is less LNG
supply being directed to European terminals," said Laura Page,
senior LNG analyst with Kpler consultancy firm.
European gas storage has fallen to its lowest in at least 10
years https://reut.rs/3kyV8m4, making traders fiercely compete
for LNG ahead of the winter heating season in the Northern
hemisphere. Prices in Europe and Asia are at record seasonal
IMPORTS TO JUMP
More than 80% of Brazil's LNG deliveries this month will
come from U.S. plants in Louisiana and Texas, Refinitiv data
shows. Overall gas imports are set to hit 1 million tonnes by
month's end, up nearly 20% over July's record, Kpler estimates.
"The worst month (for demand) will be October," said Rivaldo
Moreira Neto, chief of Brazilian consulting firm Gas Energy. "I
don't expect any improvement in the next three to six months."
In July, U.S. LNG purchases by Brazil and Argentina combined
surpassed China's, with the two taking 62.4 billion cubic feet
(bcf) of gas, compared to China's 42.2 bcf, the U.S. Department
of Energy (DOE) said.
A record 142 vessels carrying the super-chilled fuel from
the United States landed in Brazil in the six months ended July
31, the DOE said. Some partially discharged in Brazil and
emptied their tanks in Argentina. An additional 17 cargoes are
on their way.
New LNG terminals that will increase import capacity are
opening as state-controlled Petroleo Brasileiro relinquishes
what was a near-monopoly in natural gas.
Last week, a power plant backed by BP Plc gas
connected to one of the first privately owned LNG import
terminals was turned on months ahead of schedule to avoid
"Until it rains, and we don't know when it is going to
happen, price levels will cause despair," said a trader who buys
cargoes for Brazil.
(Reporting by Sabrina Valle; Editing by Muralikumar