Argentina’s natural gas production hit a 21-year high in July, according to the latest data from the nation’s Energy Secretariat.
Production was 151.7 million cubic meters/day (MMcm/d), or about 5.3 Bcf/d, up 9.8% compared to July of last year. Argentina’s Vaca Muerta shale field accounted for 55% of output, the Energy Secretariat said.
Crucially, energy has once again become an economic contributor in the country. Argentina achieved an energy trade surplus of $2.7 billion in the first six months of the year. Exports were up 26.8%, and imports dwindled by 55.1%.
Statistics agency Instituto Nacional de Estadística (Indec) said this was the first time in 15 years that Argentina had achieved a positive commercial balance in energy, not counting the Covid-19 pandemic’s blight in 2020.
Over the last decade and a half, the country has relied on LNG imports from May-October as natural gas demand rises in the winter months.
According to Kpler data, Argentina’s liquefied natural gas imports have fallen each month year/year through this Southern Hemisphere winter. In August, Argentine LNG imports amounted to 405,540 cubic meters (cm), compared with 497,656 cm in the same month last year, according to Kpler.
More Investment
Miguel Galuccio, CEO of Vista Energy SA, told reporters last week that his company would invest more than $1 billion in Vaca Muerta exploration and production this year. "In 2012, Vaca Muerta was for believers. Today, Vaca Muerta is for engineers," he told Reuters.
In the second quarter, Halliburton Co. reported revenue of $3.4 billion from its international operations, up 8% year/year and “led by Latin America, which delivered a 10% increase,” said CEO Jeff Miller.
Miller cited “improved activity across multiple product service lines in Argentina.”
Baker Hughes Co. CEO Lorenzo Simonelli in a recent presentation noted Argentina’s plans for LNG exports.
“Argentina is talking about LNG...So beyond what’s always been talked about, with regards to Qatar, Australia and the U.S., you’ve got new, emerging areas that are going to be LNG feedstock for the world where gas is prevalent.”
Argentina’s 51% state-owned oil and gas company YPF SA, in partnership with Malaysian national oil company Petronas, said the northern edge of Patagonia would be the spot for a planned LNG export project that could be as big as 15-20 million metric tons/year.
The $30 billion LNG export terminal would be “the largest investment in Argentine history,” Río Negro Gov. Alberto Weretilneck said.
The Régimen de Incentivo a las Grandes Inversiones (RIGI) bill, legislation that incentivized large investment projects, made it through congress in June and would help projects such as the LNG plant.
Political swings in Argentina and extreme capital controls and other bureaucratic provisions have hindered projects of this nature from going ahead in the past. RIGI offers tax, customs, legal and foreign exchange benefits for any investment in Argentina exceeding $200 million.
The country also is in talks to export natural gas to Brazil through Bolivia. Bolivian state hydrocarbons company YPFB said earlier this year it could transport 3 MMcm/d of Argentine gas into Brazil.
Argentina is also shipping around 5 MMcm/d to Chile this winter.
The reconfiguration of the Gasoducto del Norte is slated to end later this year, allowing Vaca Muerta natural gas to get to the north of Argentina. But analysts have also sounded warning about a lack of natural gas infrastructure, including the need for more capacity on the Nestór Kirchner natural gas pipeline.
