Brazil’s state-owned Petrobras is in the midst of discussions with US LNG suppliers on a long-term import agreement, Reuters reported on March 14.

Petrobras officials did not reveal which US suppliers the company has engaged in talks with; however, the discussions are part of the South American country’s efforts to ramp up LNG imports to protect itself against potential low hydropower availability.

"We continue to import on the spot market, but we are going to the long-term market," Mauricio Tolmasquim, Petrobras' director of energy transition and sustainability told Reuters on the sidelines of the CERAWeek conference held March 10-14 in Houston.

The news comes less than a month after the state-run company inked a 15-year agreement to import 800,000 tonnes per year (tpy) of the super-chilled fuel from UK LNG producer Centrica beginning in 2027. The deal marked Brazil’s first long-term LNG supply contract ever signed.

Despite being Latin America’s biggest oil producer, the country of over 211mn consumes more gas than it produces. In addition to importing LNG cargoes from the spot market, Brazil also buys pipeline gas from Bolivia which is transported via the Gasoduto Bolivia-Brasil (GASBOL) pipeline.

Brazil heavily relies on hydropower, which comprises about 70% of its energy mix. However, due to the prospect of droughts and challenges with hydropower dams such as their often far distance from population centres, Brazil requires substantial supply of LNG to offset hydropower’s volatility.

Additionally, Brazil has indicated that it would be keen to purchase gas from Argentina as the Vaca Muerta shale formation is exploited with the required infrastructure put in place to transport the gas to Brazil.

Gas will flow to Brazil via GASBOL once it arrives in Bolivia, however first the existing Bolivia-Argentina pipeline will need to be repurposed to allow gas to flow in the opposite direction.

"(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 told Reuters.