Page 4 - LatAmOil Week 21 2021

LatAmOil COMMENTARY LatAmOil

Scepticism over Argentina’s

LNG export potential

Argentina’s ambitions to become a major LNG exporter are unlikely to be

realised in the shorter term, and the country’s producers are prioritising

regional pipeline exports

PERFORMANCE ARGENTINA still harbours ambitions to Obstacles
become a major exporter of LNG thanks to its Scepticism over Argentina’s shorter-term LNG
WHAT: Vaca Muerta shale resource – though gas pro- export potential has come from various sources
Argentina’s ambitions duction from the play peaked in 2019. Given recently. Among these is the Oxford Institute
to become a major LNG this decline, and broader political and economic for Energy Studies (OIES), which published a
exporter look increasingly uncertainties, these ambitions look increasingly paper on the country’s gas export prospects in
unachievable in the short unachievable in the shorter term. collaboration with Austral University earlier
term. Indeed, the country is currently preparing to this month.
import more LNG over the winter to meet higher OIES echoed the expectation that new full-
WHY: domestic gas demand. Meanwhile, Argentina’s scale LNG projects were unlikely to be devel-
The country’s economic gas producers appear to be prioritising regional oped in the country before 2030. It cited a lack
and political situation gas exports via pipeline. of political and economic predictability, as well
remains unpredictable, In the longer term, though, there is more as the absence of “clear, long-term” energy pol-
and producers are confidence in Argentina eventually being able to icies. The institute said it was possible that new
prioritising pipeline gas ramp up LNG exports, bolstered by the country’s projects could be developed for start-up beyond
exports. Gas Plan 4, which aims to support domestic pro- 2030, but warned that there was a risk of assets
duction, among other measures. Even so, devel- winding up stranded given a government pledge
WHAT NEXT: oping a major liquefaction terminal would take to achieve carbon neutrality by 2050.
Argentina will ramp up several years from the point that there is enough According to OIES, one major challenge for
LNG imports over the confidence in future gas supply to sanction such Argentina if it is to develop new liquefaction
winter to meet higher a project. Indeed, BP-backed Pan American capacity is the seasonal nature of its domestic
domestic gas demand. Energy’s vice-president of gas, electricity and gas demand. In particular, demand rises over the
development, Rodolfo Freyre, said at an energy period May-September winter period, and OIES
forum organised by the Ambito Financiero warned that this would result in lower utilisation
newspaper this month that he did not expect any rates for any new LNG plant, affecting the eco-
such facility to come online until around 2030. nomics of such a project.

Argentina’s production
growth and export
ambitions are
underpinned by the
Vaca Muerta shale play.

P4 www. NEWSBASE .com Week 21 27•May•2021