Us$123 Billion Lng Build-Out Risks Derailing Energy Transition In Latin America

Key points

A rash of new LNG terminals and gas pipelines threatens to saddle Latin America with costly stranded assets and exposure to energy price swings, in spite of the region’s vast renewables potential, finds a report from Global Energy Monitor.

Data in the Global Gas Infrastructure Tracker show planned LNG export and import terminals in the region totalling an estimated US$123.6 billion in new investments, much of which are concentrated in three countries: Mexico, Argentina, and Brazil.

New LNG export projects have a high likelihood of becoming stranded assets if countries meet their own climate objectives, and recent geopolitical events, including Russia’s war in Ukraine, have demonstrated the volatility and unreliability of LNG imports. 

All of these expansions to the region’s role in the LNG economy are planned despite the International Energy Agency’s warning that the global LNG trade should peak in the middle of this decade for the world to meet its climate goal of limiting global warming to 1.5℃. 

Latin America’s LNG buildout faces significant barriers, however, and is by no means certain to advance. Given the region’s abundant renewable resources and its progress planning new renewable energy projects, countries could avoid sinking investment into the global LNG boom and focus on developing clean energy.

Robert Rozansky, Global LNG Analyst at Global Energy Monitor, said “Latin America already has one of the cleanest electricity mixes in the world, so rushing headlong into the LNG economy would be a mistake. The silver lining is that many projects are still in the planning stages, so the region has an opportunity to sidestep the global LNG boom and avoid weighing down economies with risky fossil fuel investments. The smarter bet is to double down on the region’s vast wind and solar potential.”

Contacts

Robert Rozansky

Project Manager, Global LNG Analyst, Global Energy Monitor

[email protected]

Gregor Clark

Project Manager, Latin America Energy Portal, Global Energy Monitor

[email protected]

About the Global Gas Infrastructure Tracker

The Global Gas Infrastructure Tracker (GGIT) is an information resource on natural gas transmission pipeline projects and liquefied natural gas (LNG) import and export terminals. The internal GGIT database and wiki pages are updated continuously throughout the year, and an annual release is published and distributed with data summary tables. The data are released under a creative commons license and can be downloaded here.

About the Portal Energético para América Latina (Latin America Energy Portal)

GEM’s Latin America Energy Portal offers a region-wide perspective on energy infrastructure in Latin America and the Caribbean, through interactive maps and thousands of wiki pages. The Portal synthesizes GEM’s research on nearly 5,000 projects throughout the region, including coal- and gas-fired power plants, oil and gas pipelines, oil and gas extraction sites, LNG terminals, solar farms, wind farms, coal terminals, coal mines and steel plants that meet a predetermined size threshold.