Page 10 - LatAmOil Week 47 2019

LatAmOil ARGENTINA/BOLIVIA LatAmOil
Amendments to Bolivian gas deal could save YPF $300mn in 2019
ARGENTINA’S national oil company (NOC) YPF is reportedly set to reduce its bill for natural gas imports by $300mn this year and may suc- ceed in doing the same next year.
The savings are likely to stem from the revi- sion of YPF’s contract with its Bolivian coun- terpart YPFB, the national news agency Telam reported last week. It explained that the two companies had amended their 2006 agreement on gas supplies to allow for seasonal variations in delivery volumes. The amendment provides for YPFB to cut the amount of gas pumped to Argentina via a cross-border pipeline by nearly 50%, it said.
The two sides agreed to revise the contract last year and finalised the amendment in Feb- ruary 2019. The amendment is due to remain in force until February 2021, Telam stated.
Under the original version of the deal, YPFB was supposed to deliver 21.3mn cubic metres per day of gas all year long. But in recent years YPF has needed less gas. It has been able to push its own production levels up as new fields in the Vaca Muerta shale formation have come on stream.
As such, it secured YPFB’s agreement to reduce supplies to at least 16 mcm per day between May and September, when demand for heating is usually highest. Delivery volumes typ- ically peak at around 18 mcm per day in July and August, the coldest months of the year.
Between October and April, Argentina is
due to receive 11 mcm per day of Bolivian gas. In practice, YPFB is not always able to supply the amounts specified in the contract, owing to inadequate investment in exploration.
Bolivian imports currently account for about 11% of Argentina’s total gas consumption, Telam noted. Production from domestic fields makes up another 84%, and the remaining volumes are split between LNG imports with 4% and alter- native sources, which are more costly, with 1%.
Postponed tariff hike
In related news, Argentina’s Ministry of Energy has announced plans to delay a planned increase in natural gas tariffs.
According to a resolution published in the Official Gazette earlier this week, the new rates will now take effect on February 1, 2020, and not on the previously scheduled date of January 1, 2020.
In the resolution, the ministry indicated that it was also shifting the reference period that would be used to calculate the new tariff. The rate will be indexed to reflect variations in world gas prices between February and August of 2018, it stated.
This is not the first time Buenos Aires has postponed the tariff hike. The ministry is required to review gas transportation and dis- tribution prices twice every year, and the most recent review was originally scheduled for Octo- ber 1, 2020. ™
Argentina receives Bolivian gas via a cross-border pipeline (Photo: Bolivian press)
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w w w . N E W S B A S E . c o m Week 47 28•November•2019