Gas Geopolitics in the Mercosur Countries

Abstract

Lic. Eduardo M. Barreiro Abstract In a world context in which the economy tends to globalize; in which the oil prices are the same in any point of the planet, only depending on the API gravity and sulfur content, to speak of "Gas Geopolitics in the Mercosur Countries" seems redundant and old fashioned. In the concept of "geopolitics" a local connotation is implicit, particular and different of the rest of the world; therefore opposed to the globalization concept. But the globalization is not yet valid for the natural gas. Its value is not the same in United States, in Europe or Japan. Neither the prices, nor its oscillations, nor the contracts, are equal; there are market differences. This is due to a fundamental motive: transportation. To transport gas is more expensive than to transport oil. If transported by pipeline, same pipe diameter transfers only 1/5 of the implicit energy in the crude transportation. The needed investment in the gas pipeline construction is higher (pretreatment plants are more complex, safety procedures are strict, control systems much more expensive). The cost is much higher if the gas is carried by ship; LNG transports demand a previous liquefaction process, transportation in a special and dedicated ship, more expensive than an equivalent tonnage oil tanker, and the regasification at the arrival point. The World Gas Market has been divided in three main geopolitical regions:Canada/United States/MexicoNorth Africa/Europe/C.I.S. RepublicsJapan and North Pacific Countries. Up to now, South America and specially the Mercosur countries have been ignored as an emergent geopolitical new area, because its emerging gas market only recently started to be delineated. But in spite of the fact that is new, possibilities are big. With potential markets which foreseeable characteristics are presented in this work, and providing countries that can supply gas reserves for those markets, Mercosur is appearing as a new geopolitical area to consider, and in a region for large investments in production, transportation, distribution and natural gas utilization. Nevertheless, the development will not be as explosive as has been outlined by some authors; it will be slow. The bottle neck is not only the huge amount of money needed for the necessary investments, but the time that will take the accomplishment of the needed infrastructure works. The historical conversion process to gas use in Argentina, first gasified country of the region, will be analyzed, and the analogies and differences with the other countries are going to be outlined. Gas reserves, that exist in the countries in several basins to cover the supply to other member countries, are going to be presented. The necessary transportation infrastructure to send natural gas to other Mercosur markets will be summarized. With this work I shall try to present a photograph of this new geopolitical area for the natural gas, to define it, and to incorporate it by own rights into the other geopolitical areas of the world.