Argentina starts exporting LNG

According to Kallanish Energy, natural gas production in Argentina has increased over the last three years, leading to the resumption of oil exports and the beginning of liquefied natural gas operations.

According to a note released by the US Energy Information Administration (EIA), this is largely due to production in the giant basin, Vaca Muerta, which hit more than 1bn cubic feet per day (Bcf /d) last December.

The Argentine Energy Secretariat released earlier this month that oil and gas production hit a record in May thanks to the basin.

Gas production grew by 7.6% and oil by 4.2% over the same period in 2017, making it the highest production in a decade. In addition, May was the 13th consecutive month without importing oil, the longest period since 2012.

The Vaca Muerta basin accounts for 23% of the country’s production and has recoverable resources of 308tn cubic feet (Tcf) of natural gas and 16bn barrels of oil. Only 4% of its 8.6m acres are under development.

Argentina resumed exports of natural gas to Chile and Brazil through pipelines and embarked its first LNG cargo on June 6, from the floating offshore liquefaction unit Tango (Flng), operated by local integrated energy company YPF.

“As Argentina does not have geologically adequate formations to serve as large-scale natural gas storage facilities, natural gas producers have to stop surplus production to accommodate the seasonal consumption pattern,” the EIA said in a statement.

Currently, domestic production exceeds demand during the warmer months, but in the winter, there is still a need to import gas through pipelines (mainly from Bolivia) or in the form of LNG.

Such imports are likely to continue until additional infrastructure is built to transport shale to major demand centers.

The increase in production is helping reduce Argentina’s energy deficit to US$2.3bn by 2018 from US$6.9bn in 2013, according to the Argentine Energy Secretariat.

Source: Kallanish Energy

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