Southern Cone gas and power short-term outlook: October 2023

With the end of winter in Argentina, gas exports to Chile started increasing in October – including exports through Norandino – and will continue to grow as the start-up of the Nestor Kirchner pipeline further increase producers gas surplus during summer. In the power sector, great rainfall in the North due to El Niño phenomenon had water inflows increase 195% compared to long-term average levels. However, these remarkable water volumes did not impact reservoir levels. On the other hand, aforementioned phenomenon also affected Brazil's North region, which faced a record-level drought this month. Nevertheless, this did not reflect spot prices substantially, and its main impact will be on tariff charges. From the gas perspective, LNG imports will remain restricted to contractual commitments and will increase in 2025, pushed by the start of GNA II and Barcarena power plant (Celba).