Argentina was again forced to import gas in the winter

Will Argentina be able to get warm this winter? With cool temperatures looming, with the onset of the off-season – in June in the southern hemisphere – the global rise in gas prices, particularly under the influence of the war in Ukraine, made the country’s energy forecasts fluctuate for a while, forcing some of this commodity to be used to import. Barely out of the renegotiation of its debt with the International Monetary Fund ($45 billion, restructured March 25), Buenos Aires had to enter full-scale negotiations to ensure its supply without fully siphoning off meager foreign exchange.

A deal with Bolivia, Argentina’s traditional winter gas supplier, was finally sealed on Thursday, April 7, despite the country’s falling production. Bolivia is thus guaranteeing 14 million cubic meters of gas per day, as well as priority for Argentina for additional volumes subject to availability. Everything for the period from May to September. These amounts are comparable to those received in winter 2021, according to the Argentine Ministry of Economy.

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Argentina’s center-left government has celebrated a bargain deal with the friendly country chaired by Luis Arce (left). “The average price of the agreement (…) is around $12.18 per MMBtu [million de British Thermal Units, unité de mesure du gaz], during the international LNG price [gaz naturel liquéfié] three times as high and diesel twice as high”, responded Dario Martinez, the Minister of Energy.

Exhausting and costly contortions

Argentina also signed an agreement with Brazil on Friday, April 8th. The neighboring country will supply 2 gigawatts of additional electricity from May to September. Last but not least, “The first LNG vessels, intended to balance demand during the winter period, have already been tendered,” affirms the Economy Ministry, which is ensuring that no program of voluntary cuts within the industry is implemented this winter, as the sector had feared.

It’s a grueling and costly feat for a country paradoxically sitting on a treasure trove of petrol. “The potential of Vaca Muerta is enormous”, notes Mariano Barrera, an economist at the Latin American Faculty of Social Sciences, referring to the monumental 30,000 square kilometer gas oil exploration site in the south-west of the country. This is the second largest unconventional gas resource in the world, according to Argentine estimates.

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