Brazil and Argentina signed an agreement on Monday to study the development of infrastructure for natural gas exports to Brazil, with Brazilian authorities saying the deal could lead to imports of as much as 30 million cubic meters of gas per day by 2030.
The memorandum of understanding (MOU) will create a working group to identify the measures needed to make the supply of gas from Argentina to Brazil viable, with emphasis on gas from Argentina's massive Vaca Muerta formation, Brazil's Mines and Energy Ministry said in a statement.
Brazil is Latin America's largest crude oil producer, but its gas output is insufficient to meet growing domestic demand, which made increasing gas supply a priority for Brazil President Luiz Inacio Lula da Silva.
Vaca Muerta is the world's second-largest shale gas reserve and fourth-largest shale oil reserve. Argentina's state oil firm YPF YPFDm.BA is leading activity there in hopes of turning the country into a major energy exporter.
The working group will analyze possible routes for the gas to reach Brazil, the Brazilian ministry said.
Brazilian Mines and Energy Minister Alexandre Silveira told reporters the initial potential is for Brazil to import 3 million cubic metres per day from Argentina, potentially reaching up to 30 million by 2030.
The routes to be analyzed include the reversal of flow of Bolivia's pipeline, a route going through Paraguay, and another one through Uruguay, according to the ministry.
Brazil and Argentina will also analyze the possibility of a direct connection at Uruguaiana, a Brazilian city that borders Argentina, it added.
(Reuters - Reporting by Fabio Teixeira in Rio de JaneiroEditing by Alistair Bell and Matthew Lewis)