Argentina's LPG production and exports are poised to rise following the deregulation of the LPG market after decades of government intervention.
The South American country has undergone a major shift this year with the liberalization of the LPG market. For decades, the Argentinian government capped LPG volumes and prices in the domestic market and required local suppliers to sell at a government-calculated export parity price that was published monthly. While the government continues to publish the export parity price, sellers no longer need to adhere to it. As a result, the pricing mechanism is expected to become a remnant of a regulated era, allowing for gas and NGL producers to reap higher margins from their production and greater price competitiveness.
Less government intervention is already spurring additional investments in infrastructure to tap the estimated 308 trillion cf of natural gas reserves in the Vaca Muerta formation. Argentina's two main LPG maritime exporters already have projects underway to help boost output and exports.
Mega plans to bring a new fractionation train online at its Bahia Blanca plant in early 2026 that will help boost the company's NGL production to around 7,000 metric tonnes (t)/d.
"Today we produce around 4,800 t/d of C2, ethane, propane, butane, and natural gas," Mega's chief executive Tomas Cordoba said at an Argentinian energy conference in December. The $260mn project will add about 2,300 t/d to production and will be finished in the first quarter, he said. The additional volume will be directed to the export market, according to Mega.
Meanwhile, Transportadora de Gas del Sur (TGS) is working on a $300mn project to process Vaca Muerta's natural gas that contains "20-25pc of liquifiable components," the company's chief executive Oscar Sardi said at the same event. Sardi said the project includes a storage facility in Puerto Galvan, a 600km pipeline, and a fractionation plant in Bahia Blanca.
"We are working on the 43mn m³/d gas project, which will result in approximately 7,700 t/d" Sardi said. "Since the country already has its propane and butane needs satisfied, this additional product will be exportable."
The two projects are expected to further boost Argentina's seaborne LPG exports, which hit a record 1mn t from January to mid-December, the highest level since at least 2014, Kpler data shows. Brazil remains the main destination, accounting for 689,000t of Argentina's shipments from January to mid-December.
Brazilian LPG demand is projected to grow by 5-8pc under the government's incoming Gas do Povo subsidy scheme, which provides cheap cooking gas to low-income residents, according to Sindigas, a local LPG association. The country's four main retail distributors — Copa Energia, Nacional Gas, Supergasbras and Ultragaz — account for nearly 90pc of Brazil's domestic market and have already confirmed that incremental demand under the program will be met by US and Argentinian LPG imports.
Argentina has also re-emerged as an LPG supplier to China against a backdrop of trade uncertainty since the start of the US-China trade war. At least three vessels carrying a combined 115,000t have made the journey to China this year, marking a return after a five-year hiatus.
A tale of two markets
Beyond waterborne exports, Argentina — with its growing supply — is positioning itself as the key regional LPG supplier for the southern cone via land exports given its proximity to landlocked countries.
Bolivia, which has historically been self-sufficient in LPG and exported surplus volumes to neighbouring Paraguay, has cut off trucked LPG exports to Paraguay this year due to its own declining production, forcing the country to satisfy its domestic requirements first. As a result, Paraguay is increasing its purchases from Argentina. Paraguay imported 97pc of its LPG supplies from Argentina between January-October, already outpacing the 74pc it imported in full-year 2024, the latest Paraguay government data show. Bolivian-sourced LPG supplies meanwhile accounted for just 3pc, down from 26pc year over year.
