Argentina is poised to ramp up LNG imports in the coming months to meet its heating season, as domestic gas production dwindles and Bolivian pipeline imports slow.
Argentina’s 2020 output was the lowest since 2017, as production from its Vaca Muerta shale formation fell short of expectations.
The prospect of weaker production this year prompted the energy secretariat to call on state-run IEASA to secure a floating storage and regasification unit (FSRU) and boost LNG imports. The government also requested the reopening of the 3.7mn t/yr Escobar import terminal last month. Escobar shut last year following a lawsuit from a nearby resident who cited the risk of an explosion.
The energy secretariat estimates that Argentina will need 21m m³/d of additional gas in May, 42m m³/d in June, 49m m³/d in July, 28m m³/d in August and 9m m³/d in September. It will probably have to source this through spot LNG imports.
Vaca Muerta production was expected to meet the country’s winter requirements, reducing Argentina’s dependence on LNG deliveries and eventually allowing a switch to LNG exports. But domestic output fell to 124m m³/d in 2020 from 135m m³ in 2019 and 129m m³/d in 2018, while Vaca Muerta production dropped to 14m m³/d from 16m m³/d in 2019 and 22m m³/d in 2018, government data showed.
Lower production last year meant Argentina had to step up its LNG receipts, with IEASA buying 31 partial cargoes, which is equivalent to around 17 standard-sized cargoes, up from 26 partial cargoes a year earlier.
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