Skip Navigation LinksMy Argus / News / News Story

Printer friendly

Argentina considers new Bahia Blanca LNG terminal

13 Feb 2017 21:49 GMT
Argentina considers new Bahia Blanca LNG terminal

Santiago, 13 February (Argus) — Argentina's state-owned Enarsa plans to issue a request for proposals for the medium-term lease of a floating storage and regasification unit (FSRU) at Puerto Rosales, near the existing Bahia Blanca facility, starting in 2018, to keep pace with growing LNG demand.

Enarsa is still working on the details of the RFP, in anticipation of issuing it in around one month, a company executive tells Argus.

Enarsa is conducting a separate tender process for a 10-year contract for the construction, operation and maintenance of the LNG terminal, including construction of around 40km (24.9mi) of natural gas pipeline, a berth for the LNG terminal and complimentary installations.

According to an invitation for expression of interest, the terminal could be later used for liquefaction, alluding to Argentina's future potential to export shale gas: "On a second stage, Terminal will permit the mooring of a Natural gas Liquefaction, storage and LNG discharging facility (potentially a barge specifically designed for this proposal)."

Puerto Rosales is located at Punta Alta, Buenos Aires province, within sight of Argentina's first LNG terminal at Bahia Blanca that was launched in 2008 with an FSRU from US firm Excelerate Energy, featuring baseload throughput of 500mn cf/d (14mn m³/d).

The new floating unit would replace the existing terminal with expanded capacity. Enarsa says the existing terminal which it contracted jointly with state-controlled YPF ends in December 2018. The new business would be 100pc Enarsa.

Under a base case scenario, Enarsa would prefer to lease a Q-Max vessel, or a Q-Flex vessel, to accommodate regasification of 30mn m³/d, or 20mn m³/d under a second base case.

Under an alternative scenario, Enarsa would lease a conventional FSRU, with a minimum storage capacity of 150,000m³ and regasification capacity of 30mn m³/d, or 20mn m³/d, according to an invitation for expression of interest published late last year.

The lease would last for seven years, with a possible seven-year extension.

In the published consultations, Enarsa was asked about the implications of the market showing only one Q-Max available by August 2016, a Mitsui OSK Line (MOL) unit that neighboring Uruguay has an option for, implying that the base case could involve a transfer of the option.

"ENARSA's intention is to obtain the best alternative for the project, from a technical and

economical perspective," the company said.

Enarsa currently has a second LNG terminal that was launched in 2011 at Escobar on the Parana River outside of the capital city of Buenos Aires. Because of navigational issues, Escobar can only receive small or partial cargoes.

The planned tenders underline the maturing of an industry that the Argentinian government originally billed as a short-term solution to the country's seasonal gas supply shortages. In 2016, Enarsa purchased 77 LNG cargoes, for a total volume of 4.932bn m³, of which 53pc went to Escobar and 47pc to Bahia Blanca.

Of 14 total suppliers, Spain's Gas Natural Fenosa accounted for 22pc of the supply, followed by Trafigura with 19pc and Russia's Gazprom with 11pc.

The largest share of the imported LNG came from Trinidad and Tobago with 29pc of the supply, followed by Qatar with 21pc, Nigeria 15pc, US 11pc and Norway 9pc. Other cargoes came from Algeria, Australia, Belgium, the UK, Equatorial Guinea and Angola.

Last year Argentina also imported around 17mn m³/d of pipeline gas from neighboring Bolivia under a long-term contract, and a small volume from Chile under a one-time contract running from 17 May to 31 August. Chile and Argentina are expected to repeat the short-term supply in the upcoming winter, utilizing the Norandino and GasAndes pipelines previously used to export Argentinian gas to Chile.