Argentina awards gas supply contracts under Plan Gas round No. 5

Argentina awarded natural gas supply contracts and approved associated contract models as part of a process to extend 2020-24 hydrocarbons production incentives program Plan Gas to 2028.

The contracts correspond to round No. 5, which the government held to extend production commitments in Chubut and Santa Cruz provinces (No. 5.1) and obtain, where transport capacity allows, additional gas from the Austral and Noroeste basins (No. 5.2).

Three parties had presented proposals to provide additional production under No. 5.2. 

An Interoil-operated consortium, known as Glacco Compañía Petrolera-Roch-Áreas Chorrillos-Palermo Aike-Campo Bremen-Moy Aike-Océanos, was awarded a contract to supply base volume of 30,000m3/d at a price of US$3.46/MMBTU (million British thermal units) from May 2023-December 2024. It was also awarded volumes of up to 207,000m3/d at prices ranging from US$5.90/MMBTU to US$9.98/MMBTU, from May 2023 to December 2028.

In 2009, with Mercuria Energy Group, Roch acquired Austral basin areas Chorrillos, Palermo Aike, Campo Bremen, Moy Aike and Océanos, among other assets.

Tecpetrol, meanwhile, secured a contract for volumes of up to 300,000m3/d, at prices ranging from US$4.75/MMBTU to US$8.75/MMBTU, from May 2023 to December 2028. Documents, however, cite Golfo San Jorge basin blocks El Tordillo, La Tapera and Puesto Quiroga as the source of the gas.

Alianza Petrolera Argentina, which said it would obtain the gas from the Austral basin, secured a contract for volumes of up to 300,000m3/d, at prices ranging from US$5.00/MMBTU to US$9.50/MMBTU, from May 2023 to December 2028. 

In terms of the extension of existing supply commitments corresponding to Chubut and Santa Cruz producers, contracts have already been awarded to Pan American Energy (Chubut) and CGC (Santa Cruz).

Volumes have also been awarded under round No. 4, to extend and expand commitments from producers in the Neuquén basin, home to the Vaca Muerta unconventionals formation.

Production of gas in the Neuquén basin has been trending up, while output in the rest of the country has been trending down as investment flows heavily into shale and tight gas operations. 

Under Plan Gas – launched in 2020 and designed to help spur investment and cover demand – producers bid for contracts to supply offtakers.

The first round was held to secure base volume of 70Mm3/d (million cubic meters per day) for 365 days a year. Subsequent rounds were held to secure additional gas, including over the colder months, when demand spikes.

In the latest process, production commitments made under round No. 1 and round No. 3 were extended and officials also secured more. The government wanted to secure gas to fill the first phase of the under-construction, publicly funded Vaca Muerta gas pipeline, which will have capacity of around 11Mm3/d, rising to about 22Mm3/d once compression plants are installed, which could happen by end-2023.