Argentina plans to carry out its first LNG export by the middle of this week, with the inaugural partial cargo bound for US-based Cheniere Energy.
The 147,900m³ Fuji LNG tanker arrived at Buenos Aires province on 1 June, and yesterday state-controlled YPF began loading 30,000m3 of LNG.
The operation is taking place at the port of LPG fractionator Mega, a joint venture between YPF, Brazil's state-controlled Petrobras and US chemicals giant Dow.
Cheniere purchased the cargo in the spot market.
The exports kicked off earlier than expected. YPF executives had said as late as last month that LNG exports would begin in the third quarter.
The 2.5mn m3/d Tango floating liquefaction barge was installed as part of a 10-year charter agreement with Belgium's Exmar that was signed in November 2018.
YPF still expects LNG exports to begin in earnest in the third quarter. A company official explained the partial cargo it is selling this week is what was generated to start up the newly installed liquefaction barge. "We had two options, either sell it or just leave it in there for the future, but we found a buyer," the official explained.
"This is the first step in a process that YPF is leading to export and expand the gas market to the world, to monetize Argentinian gas in a concrete and reliable fashion during the months of warmer temperatures," said Marcos Brown, YPF's executive vice president for gas and electricity.
Argentina's growing production, largely from the Vaca Muerta shale formation in southwestern Neuquen province, is reducing the country's need for pipeline and LNG imports.
But the country has not been able to absorb all of the production, forcing some companies, including YPF, to curtail output and fueling the campaign to export.
Argentina's gas demand in Argentina is seasonal, surging during the winter on the back of heating requirements.
From the late 1990s to 2004, Argentina had been a steady exporter of pipeline gas, mainly to Chile. In subsequent years, a dearth of investment and domestic price controls led to production declines and soaring demand that forced Buenos Aires to resort to LNG in 2008, eventually installing two receiving terminals.
Argentina currently has one LNG receiving terminal after a contract for the Bahia Blanca floating storage and regasification unit (FSRU), which had a baseload throughput capacity of 14mn m³/d (500mn cf/d), was not renewed last year.
Argentina has also resumed some pipeline exports to Chile and Brazil.
In the first quarter of 2019, natural gas production rose 4.8pc to 130.9mn m3/d, compared to the same period of 2018, according to the latest energy secretariat data.
