As Bulgheroni explained during a meeting of CEOs held by the IAPG at the Expo Argentina Oil&Gas 2022 in La Rural, the initiative will require an investment of between US$10,000 and US$15,000 millionand includes the construction of an LNG plant, a gas pipeline from Vaca Muerta and storage works and port infrastructure for the progressive generation of between 4.5 and 13 million tons of LNG. “This can be achieved through a consortium led by YPF, and we want it to include all the producers that are the operators of the molecules, with companies that have had experience in managing these plants and eventual buyers”said the CEO of PAE.
The PAE proposal coincides with the growing demand for LNG in the world, necessary to sustain the global economic recovery after the pandemic and to meet the decarbonization goals, in a climate of international tension due to the price of energy derived from the conflict between Russia and Ukraine. Marcos Bulgheroni predicted that in the current context of geopolitical reordering and energy transition, the demand for LNG will not only grow, but its consumption will increase exponentially in the world. An opportunity in the midst of the crisis.
“The context was already complicated from before. Now Europe has to replace natural gas from Russia because national security policies take precedence over the market, but there the problem is LNG because there are no additional amounts of supply to cover that demand “he evaluated.
as anticipated Ambit, Martín Guzmán spoke about this topic with the main oil companies in the United States during his recent tour of Houston. There, the Minister of Economy offered the resources of Vaca Muerta in exchange for the 60 LNG ships at a reasonable price that the country needs this year, plus the possibility of installing an LNG plant in Patagonia. The US has eight active LNG plants and more than 1,000 tankers sailing the oceans, mainly affected by the supply in Europe and Asia, due to the lack of Russian gas. Its production capacity reaches 400 million cubic meters of gas per day and, on top of that, the Federal Energy Regulatory Commission (Ferc) has already approved the construction of 14 new LNG terminals. An example of what is happening is Spain, a net importer of gas, which until recently was supplied with 50% of the gas from Algeria. But as of January, the US surpassed that country as the first supplier, with 30% of imported gas, against 28% for Algeria.
In fact, today for Argentina the supply of LNG for the coming winter is one of the great concerns left by the war. In 2021 the Government paid shipments to US$8.5 per million BTU and demanded a total of almost $1.1 billionbut today due to the impact of the Russian invasion, LNG shot up to peaks of almost u$s50. It is estimated that only LNG will be disbursed this year about $4.5 billiona star figure for the coffers of the Central Bank.
Given this situation, Marcos Bulgheroni considered it necessary “rearrange priorities and find a balance” for “develop Vaca Muerta and the other oil and gas projects because that will allow the country’s matrix to change”. To achieve this, he said it is essential “expand the transportation capacity and find the country’s markets with the world because after many years of development, the industry knows how to produce efficiently and now is the time to develop it.”
In this sense, another of the proposals that Bulgheroni released at the CEO meeting was the possibility of uniting Vaca Muerta with the Norte Grande, “closing the ring” with the carriers TGS and TGN to start looking for external markets, in particular the plaintiff south of Brazil, a country that could be “export steadily”. As analyzed, this demand can be supplied with a Buenos Aires-Porto Alegre ring and a second from Montevideo, even redirecting the northern gas pipeline where gas is currently transported from Bolivia to Argentina, to jointly, “be more efficient and competitive”with volumes of 30 to 40 million cubic meters per day for the main market in the region, with a focus on industrialists from São Paulo.
But as always happens in business, efforts must be shared. For this reason, Bulgheroni stated that the national government must issue “clear signals” in the long term, “Guarantees that the gas will flow, firm contracts and even country-country agreements, to give it an international framework and, of course, access to foreign currency to finance and repay this project, for example, through a trust so that part of those dollars allow us to pay for that investment”.
“We come from a complicated framework in which companies are financially restricted to make investments and increase production. For this reason, although it is an opportunity for the country, it is not known who is going to meet the demand that arises after the conflict”he added.
Bulgheroni warned that high energy prices “are bad news for the country’s trade balance” and although the uncertainty does not allow us to anticipate how the trend will continue, he admitted that he does not envision a 2022 with falling prices. “The problem is imports and these prices now force us to review the original strategy. The positive thing is that these situations lead you to reorganize priorities and find a balance, therefore, we have to recover Vaca Muerta: the reserves we have are enough to cover six times the consumption of Argentina for the next 30 years”he remarked.
Source: Ambito
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