BBAM2023: Latin America’s Thriving Project Market

Breakbulk Americas 2023: Latin America’s project market is gearing up for significant expansion in the coming years, with offshore wind in Brazil and nearshoring in Mexico among the drivers of growth, speakers on a main stage panel session told listeners in Houston.

“Energy, mining, and infrastructure are taking up the biggest share of megaprojects currently under construction and the region is tipped for huge growth in the renewables sector, particularly offshore wind and hydrogen,” said Murilo Caldana, project director at FOX Brasil and moderator of the “Latin America Spotlight: Outlook, Projects and Opportunities” session.

“The decommissioning market is also on the rise and alongside this, large scale port development to service the needs of the region’s projects,” he added.

In Argentina, surging shale gas production at the world-class Vaca Muerta formation and the buildout of supporting infrastructure is generating myriad opportunities for project logistics, said Pablo Hanacek, head of industrial projects at DHL Global Forwarding Argentina.

The 30,000 square-kilometer oil and gas formation in Neuquen Basin in western Argentina is home to the second-largest shale gas reserves in the world and the fourth-largest unconventional crude reserves. A massive infrastructure drive to ensure the gas keeps flowing is also providing breakbulk with fresh streams of work.

“Projects are not only related to the consumption of gas and the potential export to other countries, but it will also cascade into other projects such as LNG, fertilizers and ports. So definitely we are very excited,” Hanacek said.

In Brazil, Latin America’s largest economy, hydrocarbons, renewable energy and pulp and paper continue to represent the fastest-growing sectors for breakbulk.

The Port of Açu in the north of Rio de Janeiro, one of Brazil’s most important offshore oil and gas hubs, is one of the largest port complexes in the Americas, with 10 private terminals including a multi-cargo terminal (T-MULT).

The port also houses Latin America’s largest natural gas-fired thermoelectric park.

“The forecast for oil and gas in Brazil in the next few years is very good,” said panelist Jose Lucas Moreira, commercial manager terminals at the Port of Açu. “We expect to be in the top five oil producers in the world.

“There are a lot of projects going on, but I’d like to highlight the decommissioning of platforms, which is a new area for us in Brazil. The Port of Açu is one of the most capable ports to handle this new demand in the market. The scenario is very good for us. We believe there will be a lot of work to do.”

Moreira also pointed to opportunities stemming from energy transition, including offshore wind. “Brazil has a huge coastline, almost 8,000 kilometers. We have three hotspots to develop offshore wind, including right in front of Açu. We strongly believe it will be a reality very soon and we are ready to receive it.”

Mexico, meanwhile, is gearing up for more investment amid nearshoring from China. Carlos Carcamo, asset-based sales director at Mexico-headquartered heavy-lift specialist Tradelossa, said the trend represented a “real opportunity” for the country.

Some 400 US and Asian companies are interested in relocating to Mexico by 2024, generating some 700,000 jobs, while nearshoring could boost the country’s GDP by US$50 billion over the next six years.

“Our advantages are with the trade agreement we have with the US, the location close to the US and the cost of labor force. It’s an opportunity to grow and make a real change in the international market.”

Marcelo Lopes, manager of logistics and trade compliance at offshore drilling company Valaris, pointed to the importance of pricing integrity in Latin America, as well as the benefit of local knowledge.

“Knowing the territory is so important,” Lopes said. “And most of the time the companies that understand the territory are the small operators – it’s not always the big guys. I believe in today’s business, when you have that local knowledge, and the understanding of how that country operates.”

The session was sponsored by PhilaPort – the Port of Philadelphia. 

Watch our post-panel interview with Pablo Hanacek: