Imports of liquefied natural gas (LNG) to Latin America fell by 4.2 million tons (Mt), or 32%, during January-September versus the same period in 2019 as the coronavirus ravaged the region’s economies, according to new analysis by data intelligence firm Kpler.

LNG imports to Latin America

Latin America has seen a particularly sharp decline this year compared to other LNG-importing regions in the world, said Kpler’s Homayoun Falakshahi, senior commodity analyst, during a webcast presentation on Thursday.

Europe, for example, saw an 11% year/year increase in LNG imports over the same span, while Asia recorded a 2% increase. In both cases, however, the increases were because of high imports during the first quarter, before the pandemic made its impact felt around the world.

Falakshahi also noted that Latin America’s LNG import volumes were on the decline before the pandemic. The last quarter in which the region posted a year/year increase was in 1Q2019, Kpler data show.

In Brazil, “LNG and thermal coal imports have pretty clearly weakened a lot through Q2 and Q3” of this year, said Kpler’s Reid I’Anson, senior commodity analyst. He noted that the reason for this is two-fold.

In the second quarter, Brazil’s LNG import weakness was mainly because of an overall drop in power demand amid the pandemic, while in Q3 it primarily was the result of a bump in hydroelectric output.

Normally in Brazil, “if you have a strong hydropower output, thermal power output tends to weaken on a year/year basis and vice-versa,” I’Anson said. “This was not true through Q2, and this is very rare.”

Both hydropower and thermal generation were either flat or lower on a year/year basis throughout the second quarter in Brazil, reflecting overall economic weakness.

“But this has since reversed into Q3,” I’Anson said, “and we’ve moved back into a more normal situation” of an inverse relationship between the two power sources.

Latin America’s largest LNG exporter, Trinidad and Tobago, has seen its export volumes to the Americas steadily decline over recent years, although they have stabilized at an average of about 450,000 tons/month over the last year, Kpler data show.

Total exports from the Caribbean island averaged 12.5 Mt/y in 2018, accounting for a 3.5% global market share, according to the International Group of Liquefied Natural Gas Importers.

In 2020, however, “the story has been a bit different,” said Falakshahi. “What is interesting is the destination of this LNG,” he said, explaining that the biggest impact on Trinidad’s LNG exports has been in shipments to Europe.

After hitting a peak of about 700,000 tons/month in April, they plunged to about 200,000 tons/month in July, where they have mostly remained since.

Exports from Trinidad to Europe did tick up slightly to 240,000 tons/month in September, however. The country’s exports to Asia and the Americas have remained relatively stable over the same span, Falakshahi said.

He also noted that Kpler has recently seen a few cargoes coming out of Trinidad’s Atlantic LNG terminal sitting idle in floating storage for a few weeks before finding a buyer.

Mexico, meanwhile, is seeking to join the ranks of LNG exporters in the Americas by liquefying natural gas produced in the United States and exporting it to Asia.

Sempra Energy and Mexico Pacific Limited LLC each are nearing a final investment decision on liquefaction terminals planned for the country’s Pacific Coast. The government has announced a third project for the port city of Salina Cruz, although experts have questioned the project’s viability.Mexico has seen its own LNG imports largely displaced in recent months by new pipeline infrastructure, including the 2.6 Bcf/d Sur de Texas-Tuxpan offshore pipeline and the Waha-to-Guadalajara, aka Wahalajara system.