Brazil Hikes LNG Imports On Southern Drought

Brazil is back in the spot market after a relatively quiet 2011, with recent buying activity from state-owned Petrobras helping to drive cargo prices to their highest levels in nearly a year. Although overall Brazilian demand for power is up 6% in 2012, it is mainly short-term factors like drought and power exports that are behind the country’s surging LNG imports (see related article above). These totaled 0.3 MMt/y across five cargoes this month, up from three shipments in March, one in February and none in January. Brazil has significantly increased its electricity exports to neighboring Uruguay recently, a country struggling to meet domestic power needs. Additionally, Brazil’s southern region is suffering under a severe drought that has resulted in much lower hydro electricity output. The central-west region has started exporting large amounts of power to the south to make up the shortfall, with electricity exports quadrupling from last year. Download here