Argentina calls off September LNG tender: source

Argentina calls off September LNG tender: source

Argentina’s state-owned Enarsa has called off a proposed tender for the delivery of two cargoes of liquefied natural gas in September on expectations that the additional supplies will not be needed, a source close to the situation said Monday.

“The announcement was made [for the tender], but then it was canceled because the boats were not needed,” the source said.

The tender would have seen two cargoes delivered to a floating regasification terminal in Escobar, up river from Buenos Aires.

The bidding round attracted the interest of Brazil’s Petrobras, Spain’s Gas Natural Fenosa plus trading firms Trafigura and Glencore, El Inversor Online news service reported August 6, without sourcing the information.

Enarsa, which oversees national gas imports, could not be reached for comment Monday. The company has an unwritten policy of not speaking openly with the press.

A source at YPF, which handles the tenders and deliveries, declined to comment on the report and the tender cancellation, citing company policy.

Argentina has seen demand for gas decline this year, in part due to warmer-than-normal temperatures so far in the May to September cold season. Fundelec, a power industry group, calculates that temperatures averaged 13.5 Celsius (56.3 Fahrenheit) in June, nearly two degrees higher than the 11.6 C historical average.

As a result, gas demand fell 5.8% to an average of 120.2 million cu m/d in June from 127.6 million cu m/d in the year-ago period, according to the national statistics agency Indec.

Enarsa lined up most of its LNG deliveries for 2015 in an October 2013 tender, when 98 cargoes were ordered. However, it periodically enters the spot market to meet unexpected demand, particularly during the cold season.

Argentina has been importing increasing amounts of gas since 2004 as declining output from its fields has led to shortages. Gas production dropped 20% to an average of 114 million cu m/d in 2014 from a record 143 million cu m/d in 2004, but it has started to recover. Production reached 118 million cu m/d in May, helped by rising output from shale and tight plays.

The output, however, is still shy of the country’s 130 million cu m/d average demand this year and peaks of 180 million cu m/d, according to the Argentine Institute of Oil and Gas (IAPG), an industry group.

Argentina’s gas imports totaled 43.6 million cu m/d in June, up 2.3% compared with 42.6 million cu m/d in June 2014, according to the latest Energy Secretariat data. Of the imports, 16.5 million cu m/d was by pipeline from Bolivia and the rest LNG. The LNG imports totaled the equivalent of 27.1 million cu m/d in sendout capacity in June, up 8% compared with 25.1 million cu m/d in the year-ago period, the data shows.

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