Argentina sees recovery in gas output on incentives, but LNG imports to increase
Argentina’s government expects a pricing incentives program will turn around a slide in natural gas output in the next few years, but LNG imports are poised to rise this year, including via a possible second floating storage and regasification unit (FSRU), Energy Secretary Dario Martinez said.
“Producers are investing in [gas] resources,” he said late March 30 in an interview with Telefe Neuquen, a local TV broadcaster. “We want to create a virtuous cycle that guarantees more gas for Argentina and reduces gas imports.”
The secretariat launched the incentives program in December, creating a system of auctions for long-term gas supply contracts with the goal of pre-selling 70 million cu m/d — half of the 140 million cu m/d of average consumption — of supplies each year to distributors and power plants, plus additional amounts during the cold months of May to September. In the first tender, contracts were awarded for supplying 67 million cu m/d at an average of $3.50/MMBtu, while in the second an additional 4.5 million cu m/d was awarded for deliveries during the cold season at about $4.70/MMBtu.