OREANDA-NEWS. Brazil's mines and energy ministry has authorized Brazilian state-controlled oil company Petrobras to re-export shipments of up to 6.6mn m3 of LNG on the spot market, after it guarantees domestic natural gas supplies.

The authorization is valid until July 2017, but can be revoked at any time if the ministry is concerned about domestic natural gas supplies.

Petrobras is the only importer of LNG in Brazil and owns the country's three regasification terminals.

Petrobras already uses capacity at the 4mn t/yr Sines terminal in Portugal to store and reload LNG. This enables it to optimize management of loading and delivery windows. The company has been increasingly active as an LNG supplier in recent months, having previously focused on meeting domestic demand and occasionally delivering cargoes to neighboring Argentina.

Brazilian demand for LNG has declined in recent weeks after government started to suspend the dispatch of thermal power generation to which it resorted during a severe drought over the past two years.

In the first three weeks of August, gas-powered plants generated an average of 6,068MW, down 23.4pc over August 2014, according to preliminary data from the electricity clearing house (CCEE).

In the same period, electricity consumption has declined by 2.4pc, according to the CCEE.

Electricity demand is falling in response to a deepening economic recession. According to recent market forecasts, Brazil's GDP will contract by over 2pc in 2015 and the recession will endure until 2017.