Argentina seeks gas project for US $ 5 billion despite economic chaos

The Argentine State Oil Company, YPF SA, advance in its plans to build an export terminal for natural gas $ 5,000 million, despite the political and financial chaos in the country. The driller, who led the development of the shale deposit Dead cow, is in talks with potential international and local partners regarding the design of a liquefied natural gas facility. But the substance of these discussions has changed dramatically after the opposition candidate, Alberto Fernandez, beat the market-friendly president, Mauricio Macriin a primary vote last August 11, which ended the actions of Argentine companies before the fear that a more protectionist government will take power.

However, YPF leaders remain optimistic about Argentina's chances of becoming an established member of the small but growing club of LNG exporting countries. "We can not put the car in front of the horse being distracted by the news," he said. Marcos Browne, executive vice president of YPF for natural gas and electricity. "This is the direction in which we must move forward."

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Argentina faces stiff competition for LNG buyers as US suppliers. in Australia, exports are increasing, adding to global excesses and lowering fuel prices. However, the YPF terminal could take advantage of its location in the southern hemisphere, where seasonal gas consumption decreases when it is coldest in Asia and Europe, which increases the demand for heating in these regions.

Tango LNG liquefaction and storage terminal, which cools the gas in the liquid state to be shipped abroad, has increased production on the Atlantic coast of Argentina while preparing the country's first full fuel load, starting at the end of the month. October. Tankers will leave the port of Bahía Blanca every 40 days or so until May 2020, when the winter starts in Argentina and demand for domestic gas increases. Exports will resume in the same period next year.

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However, the barge can produce only 500,000 metric tons of LNG per year, compared to a global trade of nearly 290 million metric tons in 2017. A larger terminal allowing Argentina to have access to Large importers in Asia are essential to Unlock production at Vaca Muerta, where drillers face low demand for much of the year. It is not yet clear whether the LNG facility would be terrestrial or offshore and where it would be built. Options include anchoring multiple floating liquefaction units, such as Tango, similarly to the Golar LNG Ltd. project. in Cameroon, said Browne.

At YPF, the arrival of a new government will probably entail changes of administrationand the political situation will not be clear when the terminal's final plans are ready in about two years. However, Fernández should continue to support the development of shale fields because Argentina desperately needs export dollars to support its currency, the peso.

"The LNG terminal will be a machine to bring back money," said Sebastian Mocorrea, executive vice president of corporate affairs at YPF. "Nobody in their minds would interfere with that."

CP