Southern Cone gas and power short-term outlook: January

Slow-paced economic activity and the below-average long-term hydrology in Brazil in January maintained reservoir levels at favourable conditions, allowing system operators to displace thermal output. In Chile, on the other hand, despite the recovery reservoir policy, poor hydrology reduced their levels to 30%, increasing thermal dispatch and power spot prices in the Central region. Enarsa and YPFB signed the seventh addendum, which reduced export obligation to Argentina to 4 Mcmd during summer and 8 Mcmd at peak during winter. In this scenario, the Argentinian government announced the reversal of two compressor stations in Gasoducto Norte between San Jeronimo and Cordoba to cover the Northern provinces demand. From the Bolivian perspective, this addendum opens opportunities to supply Brazilian players, especially during summer, through interruptible agreements.