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HOUSTON, March 14 (Reuters) – Brazil’s state-run oil firm Petrobras (PETR4.SA) is in talks with U.S. liquefied natural gas (LNG) suppliers for a long-term import deal, a Petrobras executive said.
Brazil is Latin America’s largest oil producer, but consumes more gas than it produces and relies on imports to fill the gap. Petrobras buys pipeline gas from neighbor Bolivia and imports LNG cargoes to meet domestic demand. The U.S. is the world’s top LNG exporter.
“We continue to import on the spot market, but we are going to the long-term market,” said Petrobras’ director of energy transition and sustainability, Mauricio Tolmasquim, in an interview on the sidelines of the CERAWeek conference in Houston.
Petrobras and British energy provider Centrica (CNA.L) last month announced a contract for the Brazilian company to buy 0.8 million tons per annum (MTPA) of LNG for 15 years, starting in 2027. That was Brazil’s first long-term LNG supply agreement.
Long-term LNG contracts give Petrobras reliable supplies compared with purchases on the spot market. Brazil is also looking to boost its own production and is negotiating prices to import from Argentina through a set of pipelines that pass through Bolivia.
“(We) want to buy from Argentina, yes, but as in any business, you have to see other supplies (including) LNG, domestic gas, so we have to compare,” Tolmasquim said.
Companies and the governments of Brazil, Argentina and Bolivia have been in talks in recent years to take advantage of existing regional transportation infrastructure to reverse the flow of gas so that supplies from the massive Vaca Muerta shale play in Argentina can reach customers in Brazil, including Petrobras.
“We continue to talk. I think that there is real possibility to make some deal,” Tolmasquim said, adding that price negotiations have progressed since last year on a tolling fee to be charged by Bolivia to let Argentina’s gas pass through its portion of infrastructure on its way to Brazil.
“We are talking about what price we need that can be accepted by most parties,” he added.
The reshuffle of the gas flows could ultimately benefit Bolivia, a traditional gas supplier for the region, as its own output dwindles to volumes barely meeting domestic demand, Tolmasquim said.
Reporting by Marianna Parraga; Editing by Simon Webb and Marguerita Choy
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