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Natural Gas May 18, 2021 01:30:03 AM

Argentina’s Natural Gas Producers Seeking to Expand Regional Exports

Anil
Mathews
OilMonster Author
While he declined to provide details, Mariani described it as "important" in supplies, adding that the deliveries are to be from October to April.
Argentina’s Natural Gas Producers Seeking to Expand Regional Exports

SEATTLE (Oil Monster):  Argentina's natural gas producers are looking to step up output to increase exports to neighboring countries over the next few years, but exporting large amounts of LNG globally may take another decade as the country's economic crisis deters investment, senior executives said May 17.

"The first step is to use existing capacity that is being underutilized," Rodolfo Freyre, vice president of gas, electricity and development at BP-backed Pan American Energy, the country's fourth-biggest gas producer, said at an energy forum organized by the Ambito Financiero newspaper.

Argentina has about 20 million cu m/d of cross-border pipeline capacity built in the late 1990s and early 2000s to deliver gas to Brazil, Chile and Uruguay, which ran at nearly maximum use in those years. A subsequent decline in production, however, stifled the exports for more than a decade until output growth resumed in 2014. Exports averaged 2.8 million cu m/d on average in 2020, down from 4.2 million cu m/d in 2019, according to Energy Secretariat data.

Even so, Freyre said the recent exports have been a good start to renew relationships with buyers in those markets, backed by the promise of the huge Vaca Muerta shale play.

He added that exports are poised to grow now that the Argentinian government has authorized selling under fixed-term contracts instead of those that can be interrupted if supplies are tight. The new allowance is for exporting during the warmer months of October to April or May, but not in the colder months of June to September, when the country must import LNG to meet peak demand for heating, Freyre said.

The next step for growth will come from allowing exports 365 days per year, which would encourage buyers to replace other energy imports, Freyre said. In the case of Chile, for example, he said buyers could import from Argentina instead of from the global LNG market.

Indeed, Gustavo Mariani, CEO of Pampa Energia, the country's fifth-biggest gas producer, said his company is waiting for an export contract to be approved.

While he declined to provide details, Mariani described it as "important" in supplies, adding that the deliveries are to be from October to April.

"Given the fact that we are increasing our production this winter so aggressively, we are very optimistic that we will be granted this export contract," he said May 13 in a conference call with investors. "I think there will be no problem for the country in its capacity to export after the winter because there will be excess of production vis-a-vis local consumption."

Courtesy: www.spglobal.com

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