Argentina buys gas from Bolivia for up to $17 a million BTUs and exports it for just 7 dollars to Chile. It is more to Methanexthe Canadian company based in the trans-Andean country and the world’s largest producer of methanol, is sold the Argentine resource for $2.85, while for the local distributors in charge of supplying the local industry the price triples. The inconsistency arises from the decisions of the Secretary of Hydrocarbons of the Nation, Federico Bernalwho is most responsible for the inexplicable maneuver.
With the firm contracts expiring in April, Methanex is now seeking to close a new agreement to process up to 4 MMm3/day of Argentine gas starting next September. Even in the Bernal Secretariat they talk about selling him up to 5 million. Will it also be at a subsidized price? With these levels of gas, plus the 1.5 MMm3/day that the foreign firm acquires in the Chilean market, it intends to produce some 4,500 tons of methanol per day.
The daily production of gas last March was 81.67 million cubic meters. But as estimated by Federico Bernal, in the second half of 2023 it will reach 145 million. If that figure is reached, the new volumes will surpass the historical record of annual average production of 2004, which was 143 MMm3/d.
Of the total natural gas, today the priority demand (households), Cammesa and the industries (P3+GU users) take almost a third each approximately: 31, 25 and 35 MMm3/d, respectively, according to the latest Enarsa daily dispatch report on Monday, April 24. The remaining 10% is divided between CNG and fuel generation: 6.5 and 4 MMm3/deach.
In fact, today they are imported 3.2 MMm3/d highland gas. The last contract signed between Argentina and Bolivia last year established two purchase prices for gas. Up to the first 10 million cubic meters is paid $9 per million BTU and if more fluid is required, the price is updated quarterly based on a formula based on market indicators and that today is located at $17 per million BTU. The contract between the two countries is valid until 2026 and will apply for this winter, when more gas is requested.
The promise to start up the Néstor Kirchner Gas Pipeline as of June 20 will require filling the pipes with product. For this reason, the GasAr Plan was relaunched, with new rounds (4 and 5) and expansion of the first ones (1 and 3). In the multiple tenders, gas was awarded for values between $3.20 and no more than $3.60 average. Only CGC took up $9.50 by the resource of the Austral Basin, which has a higher cost of transportation and extraction.
The local production record opened the possibility of exporting to Chile. Although it resumed in 2018, last year shipments of 300,000 cubic meters of gas per day to the trans-Andean region of BioBío were agreed (between June 1 and September 30) to $7 per million BTU. But the volume exported increased. Last February alone, Neuquén gas exports reached 175.9 million cubic meters, approximately 6.28 MMm3 per day, representing 9% of provincial gas sales in a single month. These deliveries were achieved through the Pacific Gas Pipeline at an average price of $7.81 andl million BTUs, reaching a total sales value of US$50.7 million. However, Methanex receives it for just $2.85.
Therefore, the Argentine State buys gas from Bolivia and its local producers that is more expensive than the sale price set for exports. Thus, the development of industries abroad is promoted above the interest in the domestic industrial sector. An inconsistency of those who have to make the country’s energy decisions.
Source: Ambito
