Argentina gears up for gas exports to Chile, Brazil

Argentina posted the first year-on-year increase in natural gas production of 2021 in June as an upstream subsidy program bears fruit ahead of a resumption of pipeline exports in October.

Production averaged 126.985mn m3/d in June, up slightly from a year earlier, according to energy secretariat figures.

In the January-June period, Argentina's gas production declined by 6pc, on the year, to 117.938mn m3/d.

The decline comes after output had already declined by 5.7pc, on the year, to 125.3mn m3/d in the first six months of 2020, in part due to strict coronavirus-related restrictions.

The subsidy program entailed auctions to supply gas at above-market wellhead prices for power generation in 2021-24 in an effort to boost shale output and cut back on LNG imports.

Although industry leaders have largely praised the plan they also cautioned it came too late to significantly boost production to meet peak demand in the southern hemisphere winter.

Still, the increase was good news for companies gearing up to resume gas exports, largely to neighboring Chile but also to Brazil.

Firms participating in the program were given priority to export 11mn m3/d as part of firm, non-interruptible contracts between October 2021 and April 2022.

The export roster

Canadian methanol producer Methanex is set to receive a large portion of the supply heading to Chile in the spring. The producers are now seeking permission to export.

France's Total is seeking to export 500,000m3/d to Italian generator Enel in October-April for a wellhead price of $3.328/mn Btu and an additional 300,000 from January-April for $3.6/mn Btu, and 200,000m3/d to Methanex for $3.45/mn Btu, according to documents posted on Argentina's energy secretariat website.

Pan American Energy, a 50:50 joint venture between BP and Bridas, wants to export 600,000m3/d to Methanex for a wellhead price of $3.51/mn Btu and 200,000m3/d to Enel for $3.05/mn Btu. The company is also seeking to export 500,000m3/d in October-December followed by 200,000m3/d in January-April to Chilean generator Colbun for $3/mn Btu.

Compañia General de Combustibles, a subsidiary of Argentinian firm Corporacion America, is aiming for 500,000m3/d to Methanex for $3.65/mn Btu while local integrated firm Pampa Energia is seeking to export 1.5mn m3/d to Colbun for $3.267/mn Btu.

Argentina's state-controlled YPF is seeking to export 209,000m3/d to Chilean gas supplier Innergy Soluciones Energeticas for $3.1/mn Btu, 500,000m3/d to YPF Chile for $3.06/mn Btu and 1.291mn m3/d to Methanex for $3.46/mn Btu.

Germany's Wintershall is asking to export 700,000m3/d for $2.95/mn Btu to the 640MW Uruguaiana thermal plant operated by Argentinian energy company Saesa in Brazil's southern state of Rio Grande do Sul.

By Daniel Politi