Excelerate wins tender for FSRU lease in Argentina

Excelerate Energy won a tender to reactivate the country's Bahia Blanca regasification terminal, bringing the company back to the port where it imported LNG for a decade.

Excelerate has been informed of the award of the short-term lease of a floating storage and regasification unit (FSRU), although there has not yet been an official announcement from the government, a company official told Argus.

Argentina's state-controlled YPF carried out the hastily arranged tender on behalf of state-owned energy company Ieasa, with the aim of supplementing domestic gas supply during the peak-demand winter period that starts in May.

The lease runs from late May through August.

YPF and Ieasa declined to comment.

The award points to the small field of candidates that were in a position to compete on short notice. Excelerate had already operated the LNG import terminal in Bahia Blanca from 2008 until late 2018, when former president Mauricio Macri bid a ceremonious farewell to the US firm's 150,900m³ Exemplar FSRU. At the time, Argentina was counting on its Vaca Muerta shale formation to restore its role as a regional gas exporter. But the play has not lived up to expectations, partly because of government price intervention and broader economic policies that have discouraged large-scale investment.

Elsewhere in Buenos Aires province, Excelerate still operates a smaller LNG import terminal in Escobar.

The government recently launched a subsidy program meant to stimulate domestic gas production, but industry executives say it came too late to ensure adequate supply for the winter months.

Argentina also imports pipeline gas from Bolivia, where output is falling, and seasonal regasified LNG from Chile.

In the first two months of 2021, Argentina's gas production declined by 11pc, on the year, to 115.3mn m³/d. That continues a trend from last year, when production fell by 8.6pc year on year, to 123.2mn m³/d, according to energy secretariat data.

By Daniel Politi