<article><p class="lead">Argentina is poised to quickly ramp up LNG imports in the coming months to meet its heating season, as domestic gas production dwindles and Bolivian pipeline imports slow.</p><p>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 <a href="https://direct.argusmedia.com/newsandanalysis/article/2189716">to call on</a> state-run IEASA to secure a floating storage and regasification unit (FSRU) and boost LNG imports. The government also requested the <a href="https://direct.argusmedia.com/newsandanalysis/article/2182232">reopening</a> 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. </p><p>The energy secretariat <a href="https://direct.argusmedia.com/newsandanalysis/article/2181598">estimates</a> that Argentina will need 21mn m³/d of additional gas in May, 42mn m³/d in June, 49mn m³/d in July, 28mn m³/d in August and 9mn m³/d in September. It will probably have to source this through spot LNG imports.</p><p>Escobar, which can only receive partial cargoes because of draught restrictions, has been Argentina's only import facility since the country <a href="https://direct.argusmedia.com/newsandanalysis/article/1782057">released</a> the 150,900m³ <i>Exemplar</i> FSRU at Bahia Blanca in October 2018. </p><p>Escobar's inability to take standard-size cargoes pushed up logistical costs, with IEASA typically paying a premium to spot rates for partial deliveries. Such constraints have often required vessels to unload partial cargoes in Brazil on their way to Escobar. </p><p>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 124mn m³/d in 2020 from 135mn m³ in 2019 and 129mn m³/d in 2018, while Vaca Muerta production dropped to 14mn m³/d from 16mn m³/d in 2019 and 22mn m³/d in 2018, government data show. Lower production last year meant Argentina had to step up its LNG receipts, with IEASA buying 31 partial cargoes, equivalent to around 17 standard-sized cargoes, up from 26 partial cargoes a year earlier.</p><p>Bolivian pipeline gas imports are not expected to recover in the coming months, despite IEASA agreeing a new short-term contract with Bolivian producer YPFB last year. Under this <a href="https://direct.argusmedia.com/newsandanalysis/article/2173809">new deal</a>, Bolivia will only be required to supply a minimum of 14mn m³/d in May-August, having previously committed to at least 16mn m³/d in May and 18mn m³/d in June-August. Bolivian gas production has been declining since at least 2016, falling to 42.2mn m³/d in January-October last year from 47mn m³/d in the whole of 2019 and 56.6mn m³/d in 2016, government data show. </p><p class="bylines">By Ellie Holbrook</p><p><div class="picture"><div><span class="pic_title">IEASA purchased cargoes 2019-20</span> <span class="units">trillion Btu</span></div><img src="https://argus-public-assets.s3.amazonaws.com/2021/03/02/argentinacargoes02032021053654.jpg"></div></p><p><div class="picture"><div><span class="pic_title">Argentinian domestic gas production</span> <span class="units">bn m³</span></div><img src="https://argus-public-assets.s3.amazonaws.com/2021/03/02/argentinadomesticproduction02032021054533.jpg"></div></p></article>
