13 Apr Natural Gas Prices in Argentina, Bolivia, Brazil, and Chile
The title could be more precise, as this analysis focuses specifically on natural gas (LNG) import prices in Argentina, Brazil, and Chile, as well as Bolivia’s export prices. It is important to clarify that domestic natural gas prices in these four economies—a significant area of analysis—will not be addressed here.
Drawing on official publications from each country, I compiled unit import values and Bolivia’s export prices. A key advantage of these sources is their accessibility, as they are free; however, they are not always fully up to date. Despite this, they serve as a solid foundation for studying price trends in the region.
Let’s move on to the data. The following figure presents the behavior of these variables during the period 2011–2014. Note that “Imp” refers to imported gas, while “Exp” indicates exported gas. All prices are expressed in US dollars per thousand cubic feet (USD/Mcf). For those concerned about potential inaccuracies, I assure you that I took meticulous care to minimize the risk of errors while standardizing the variables.
While the figure largely speaks for itself, I would like to emphasize a few key observations:
* Brazil and Argentina generally exhibit the highest LNG import prices. However, the recent decline in Argentina’s prices warrants close attention to potential developments in 2014.
* In 2011, Chile’s LNG import prices were similar to those in Argentina. By 2013, however, a noticeable downward trend had emerged, with prices reaching approximately 9 USD/Mcf.
* Bolivia’s export prices remained stable within a range of 9 to 11 USD/Mcf, reflecting the relatively steady international oil prices during this period.
* If we were to isolate data from 2013, we would notice a slight downward trend in LNG import prices, raising concerns about what might unfold in 2014.
This brief post presents insights from an analysis that required several hours of work (constructing the figure was no small task), but the findings are quite intriguing. Why? Consider this: if Argentina secures access to “cheap” LNG, Bolivian natural gas exports may lose competitiveness, potentially prompting Bolivia to adopt a more cautious approach in its economic policies. Additionally, the gap between Chile’s and Argentina’s import prices creates interesting opportunities for arbitrage. While I won’t elaborate further, I’m confident many of you can infer the possibilities.
That’s all for now. Wishing you a wonderful and truly blessed week.
S. Mauricio Medinaceli Monrroy
Kabul
April 13, 2014
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