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Executive says that Brazil's Petrobras is in negotiations with US LNG suppliers to secure a long-term agreement.

Petrobras, Brazil's state run oil company, is in negotiations with U.S. LNG suppliers to establish a long-term deal for imports.

Brazil is Latin America’s largest oil producer but it consumes more than it produces, and depends on imports to make up the difference. Petrobras imports LNG and buys pipeline gas in Bolivia to meet its domestic needs. The U.S. exports the most LNG in the world.

Mauricio tolmasquim is Petrobras director of energy transformation and sustainability. He spoke to CERAWeek in Houston on the sidelines.

Petrobras, a Brazilian energy company, and British energy supplier Centrica announced last month a partnership.

Contractual Terms

The Brazilian company will purchase 0.8 million tonnes per annum (MTPA), of LNG, for 15 years starting in 2027. This was Brazil's very first long-term LNG agreement.

Petrobras can be assured of reliable LNG supplies with long-term contracts, as opposed to buying on the spot market. Brazil is also seeking to increase its own production, and is currently negotiating with Argentina to import LNG through pipelines that run through Bolivia.

Tolmasquim stated, "We want to purchase from Argentina. Yes, we do. But, as with any business, it is important to compare other sources of gas (including) domestic LNG.

In recent years, companies and governments from Brazil, Argentina, and Bolivia were in discussions to use the existing regional transport infrastructure to reverse gas flow so that supplies of the massive Vaca Muerta shale formation in Argentina could reach Brazilian customers, including Petrobras.

We continue to speak. "I think there's a real chance to make a deal," Tolmasquim stated. He added that negotiations on the price of Argentine gas passing through Bolivian infrastructure on its route to Brazil have advanced since last year.

He added, "We're talking about the price that we need to be able to accept by most parties."

Tolmasquim stated that the reshuffle in the gas flow could benefit Bolivia as it is a traditional supplier of gas for the region. However, its own production has been shrinking to barely meet domestic demand. (Reporting and editing by Simon Webb, Marguerita Choy, and Marianna Pararaga)

(source: Reuters)