The strategic context changed in April 2025 when Argentina and Brazil advanced a technical report evaluating infrastructure options to transport Argentine gas to Brazilian markets. That analysis identified Uruguay as a potential transit route for regional flows, moving beyond its traditional role as an end-user. Brazil’s natural gas supply is projected to reach 87 million cubic meters daily by 2035, representing a 50 percent increase from current levels, driven by pre-salt production growth and new processing infrastructure including Petrobras investments of $11 billion in Sergipe-Alagoas fields and Equinor’s Raia project in the Campos Basin.
Argentina’s Vaca Muerta development is creating exportable volumes that could supply neighboring markets on a long-term basis. YPF is preparing two additional projects for submission under Argentina’s RIGI large investment regime, which would bring the company’s total committed investments with partners to $154.1 billion. The expansion of Argentine shale gas production positions the country as a potential supplier capable of meeting both domestic demand and sustained export commitments.
For Uruguay, the infrastructure buildout required to enable these flows presents both opportunity and challenge. Mercosur presidents emphasized in July 2025 the need to deepen gas integration, utilize existing infrastructure, develop new transport works to strengthen energy security, and harmonize regulations to facilitate private investment. Uruguay’s Industry Minister Fernanda Cardona advocated in August for energy integration as a means to strengthen decision-making capacity while generating opportunities for productive activity and employment. The practical realization of these ambitions depends on infrastructure financing, predictable regulatory frameworks and long-term contracts that make cross-border exchanges economically viable for all parties.
This article was curated and published as part of our South American energy market coverage.
