Argentina roundup: LNG demand forecast, potential LNG buyers, Rigi adherence
Argentina’s No. 1 hydrocarbons province by output, Neuquén, said planned LNG exports could spur a doubling of gas output in the Vaca Muerta formation.
The comments follow a decision by companies YPF and Petronas to build a liquefaction plant on the coast of neighboring Río Negro province.
Neuquén energy minister Gustavo Medele said construction of an eventual gas duct between the jurisdictions would constitute a key signal to trigger upstream outlay.
Planned to be developed in phases, the project – once matured – could require around 100Mm3/d (million cubic meters per day) of gas, around what Vaca Muerta produces today in winter, when domestic demand peaks, Neuquén government said in a statement.
Demand growth could result in the number of rigs dedicated to gas doubling to around 16 compared with today’s fleet.
Neuquén is home to the biggest chunk of Vaca Muerta, which is attracting the bulk of upstream outlay in the country.
Río Negro’s congress has approved a bill adhering the jurisdiction to the federal government’s Rigi investment regime.
Officials are aiming to dispatch the first shipment of LNG in 2026-27 using a liquefaction vessel, YPF chairman and president Horacio Marín said recently.
Plans, YPF has said, envisage the addition of two more vessels in 2029-30 in a second phase, and construction, in a third stage, of an onshore plant in 2031, for eventual overall capacity of 120Mm3/d.
Further details should be disclosed next week during YPF’s 2Q24 results call.
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YPF and Petronas are in discussions over potential buyers of future LNG output.
Talks surround Germany, India and oil major Shell, local press report.
Shell is active in the Vaca Muerta shale play, as a producer and exporter.
Based on operator data, Shell is Argentina's fourth biggest oil producer, registering 31,200b/d in May, according to data from local consultancy Economía & Energía. Of the total, 29,800b/d was shale. The company is not among the country's 10 biggest gas producers.
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Mendoza province could become the third jurisdiction to adhere to Rigi.
Besides Río Negro, the municipal government of port city Mar del Plata has also issued an associated decree.
Mendoza’s lower house, meanwhile, supported an adhesion bill by a vote of 32-13. The draft legislation still needs the green light from the senate.
Under Rigi, qualifying projects will receive tax, customs and forex benefits, with legal and regulatory stability established for 30 years. Projects have up to two years to adhere and have to deploy, within two years, at least 40% of the minimum investment agreed. Adhesion may result in the reduction of some local government autonomy.
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