Southern Cone gas and power short term outlook: July 2020

Although Southern Cone countries moved forward with the process of relaxing restrictions, contamination rates keep increasing in high rates. In Chile, for example, some mining activities have slowdown operation due to infection risks; the reduced activity resulted in lower electricity demand after two months of stability. In Argentina, low price caps for CAMMESA auctions are already reducing gas availability for thermal power plants; on the demand side, below-average temperatures increased both gas and electricity demand for heating purposes. As a result, the country needed to increase electricity imports and liquid-fuel dispatch to meet the higher demand. Not all are negative news. In Brazil, TBG has started its transport capacity auction, and the new gas law is moving forward to vote in Congress. Also, the government is supporting a loan to protect the financial situation of local electricity distribution companies.