Argentina: Larger natural gas production leads to drop in imports last year
Thanks to an incerase in production, Argentina has been able to lower its natural gas imports to a quarter of the amount needed to supply the domestic demand, according to a report by the Abeceb consultancy published yesterday.
Natural gas extraction rose 3.5 percent in the second half of 2015, compared to the first six months of the year, an increase mainly reached thanks to state-controlled energy company YPF. The firm’s production rose 14.2 percent in 2015, consequently leading to fewer natural gas imports, mainly from Bolivia.
Argentina not only imported less natural gas but it also saved money as the price paid to Bolivia steeply dropped throughout the year thanks to the decline in oil prices worldwide. Argentina used to pay US$10.4 per million BTU in September, a rate that dropped almost by half to US$5.4 in November.
At the same time, the price paid domestically to stimulate the natural gas production was higher at the end of 2015 than the amount used for imports from Bolivia. The state pays companies as much as US$7.5 per million BTU for new output.
A similar scenario was seen with liquefied natural gas (GNL). While the amount was on the rise in 2013 and 2014, the country lowered GNL imports by 29 percent last year — reducing the bill by half compared to 2014 thanks to the decline of international prices.
The increase in natural gas production has been mainly thanks to the VacaMuerta shale area in Neuquén.
YPF’s policy to exploit the deposit has been to partner with transnational corporations capable of providing capital, as it shale oil and gas investment requirements are significantly higher than those of conventional deposits. It has already done so with the US-based Chevron in the Loma Campana deposit as well as with Petronas and Dow Chemical, among others.
Argentina has 30 times more unconventional gas and nine times more unconventional oil than traditional reserves, according to YPF. Thanks to recoverable shale resources, Argentina has the world’s second largest gas reserves, after China, and the fourth largest of oil, after Russia, the United States and China.