LNG

The governments of Argentina and Bolivia confirmed a new pipeline natural gas agreement with the Argentinians saying they would save foreign exchange reserves with the Bolivian gas and would have to buy 14 fewer LNG cargoes to meet their needs.

Argentine President Alberto Fernandez and his Bolivian counterpart Luis Arce reached a deal in talks in Buenos Aires for Bolivia to export 14 million cubic metres of natural gas per day to Argentina during the Southern Hemisphere winter season.

A joint statement said that the price of the Bolivian supplies was set at US$12.18 per million British thermal units.

Argentina’s Energy Secretary, Dario Martínez, said the Bolivian provisions would mean about 14 fewer cargoes of LNG would have to be purchased at high price and would save Argentina around US$770 million in LNG import costs.

“This is good news for Argentina, for the Central Bank’s dollar reserves and for the government’s fiscal plan,” said Martínez in a statement.

Analysts note that Argentina has suffered from an ailing economy and has been unable to meet investment needs to monetize its huge shale oil and gas resources.

A Bolivian Government statement later said the provision of gas in 2021 from Bolivia to Argentina was established at 14 million cubic metres er day, in winter, and for the rest of the year at 10 million cubic metres and this would be repeated.

Possible increase

“The President of Bolivia Luis Arce agreed with his Argentine counterpart, Alberto Fernández, the sale of natural gas and promised to give priority to its neighbour in case there is a greater production of natural gas on the Bolivian side,” added the statement.

“We are making an effort to maintain the levels of past gas supply to the Republic of Argentina and with additional gas that may be produced in Bolivia,” declared the Bolivian President.

Bolivia added that specific mechanisms between the Bolivian and Argentine state energy companies, Yacimientos Petrolíferos Fiscales Bolivianos and Argentina’s IEASA (Integración Energética Sociedad Anónima) would benefit both countries.

“The Argentine and Bolivian presidents agreed on the importance of realising concurrent actions so that the contract of Purchase and Sale of Natural Gas between YPFB and IEASA, reflects a new régime,” added Bolivia.

“It guarantees the supply of 14 million cubic metres, giving priority to making available additional volumes in the winter period as well as waiving the rights and obligations through to 2025, whose effect will be entrusted to the responsible Ministries and departments in order to draft the corresponding documents,” it added.

“The Presidents further agreed to advance in the study of investment opportunities for YPFB in the Vaca Muerta Shale basin in Argentina, working jointly to identify the alternatives for supplying liquid fuels in order to secure the energy security of both states,” stated Bolivia.