BUENOS AIRES - YPF announced today that a preliminary agreement was reached with Excelerate Energy for the charter of an LNG carrier, which will export Argentina’s excess LNG to the global natural gas market. Tango FLNG has an LNG production capacity of 500,000 metric tons and is expected to produce up to eight LNG-export cargoes per year. Since becoming a net natural gas importer in 2008, Argentina imported natural gas throughout the year. The ship provided by Excelerate has proven experience in the main international LNG terminals, and as part of this agreement, will be in the service to YPF until May 2020. Argentina plans to discontinue LNG imports as domestic gas production increases over the next few years, even as it pays less for the supplies after ending the alleged corrupt practices of the previous administration in the gas trade, President Mauricio Macri said Wednesday. The new pipeline will extend 570 km from the Tratayén processing plant in Neuquén province to the Saturno compressor station in Salliqueló, Buenos Aires province, where it will then stretch another 470 km to San Nicolás, also in the province of Buenos Aires. EIA claims that the formation is geologically comparable to the Eagle Ford shale play in southern Texas and that only four percent of Vaca Muerta’s acreage entered the development phase so far. Shale gas production has surged in Argentina from its Vaca Muerta deposit, more than tripling between January and December 2018, from 0.3 Bcf/d to 1.0 Bcf/d. Year-round exports are expected to start next year. Gabriela Aguilar, general manager of Excelerate in Argentina, added, "It is a milestone for us to partner with YPF in this activity by contributing all of our industry know-how in the transportation of Argentine natural gas to the world.". Contamos con un equipo de profesionales altamente capacitados, que le brindarán el mejor asesoramiento y servic About the size of Belgium, Vaca Muerta represents the world’s second-largest gas reserve and the fourth-largest non-conventional oil reserve. We use cookies on the public areas of our website. Petronas is participating with YPF in the joint venture of La Amarga Chica, while CNOOC participates indirectly through its subsidiary, Pan American Energy, in the Aguada Pichana Oeste. The loading of YPF's product to the LNG carrier will be carried out through an operation that will last approximately 45 days. Commenting for this story is now closed.If you have a Facebook account, become a fan and comment on our Facebook Page! According to information from the EIA, Argentina’s domestic natural gas production has been rising steadily in the past three years, largely due to increased production from the Neuquén Basin’s Vaca Muerta shale and tight gas play. Both parties will be executing the final agreement in the coming days, with the objective of starting operations the first week of September. GNL Escobar, the second LNG import terminal in Argentina. Associated gas from Vaca Muerta will also represent 15% of Argentina gas production by 2024, and other projects in the condensate and dry gas window with breakevens below US$3 per million British thermal units (mmbtu) will enter into full development in the upcoming years. Bids will be opened on September 12. Global LNG demand is showing increasing seasonality, and peak potential LNG production in Argentina during the summer months coincides with strong winter demand from utilities in Asia. Additional investments in onshore liquefaction facilities and pipeline infrastructure are required for the use of additional floating LNG-production vessels. President Mauricio Macri, who was elected in 2015, has sought to increase energy production to counter an energy trade imbalance that began in 2011. Rising natural gas production in Argentina, coupled with competitive global LNG transportation costs, is expected to position the country as an emerging source of gas supply to Asia during peak demand periods, according to new research from Wood Mackenzie. Cost estimates run in the $2 billion range. Excelerate is the pioneer and market leader in innovative floating LNG solutions, providing integrated services along the entire LNG value chain with an objective of delivering rapid-to-market and reliable LNG solutions to customers. It buys pipeline gas from neighbouring countries and also produces its own gas. Natural resources research for financial services, Oil Field Services & Original Equipment Manufacturers, Argentina LNG exports positioned to meet peak demand in Asia. BUENOS AIRES (Reuters) - Argentine oil company YPF SA said on Sunday that it began loading the first shipment of liquefied natural gas (LNG) for export from Argentina. The official energy statistics provider of the U.S. Government added that Argentina’s domestic natural gas production exceeds consumption during warmer months, but production is insufficient to meet demand during colder months (May through September) which requires Argentina to import gas by both pipeline and as LNG. Argentina will likely continue importing LNG during cooler months until additional pipeline infrastructure is built. Wood Mackenzie sees Argentina LNG ramping in 2024 with LNG production volumes reaching 6 million metric ton/year, which could then grow to 10 mmty by 2030. “Because Argentina doesn’t have geologically suitable formations to serve as large-scale natural gas storage facilities, natural gas producers have to shut in surplus production to accommodate seasonal consumption patterns. This seasonal dynamic could attract Asian buyers and present a strong economic case for Argentinian LNG. The government aims to have the pipeline complete by winter 2021 and says that by supplying the Greater Buenos Aires and Rosario areas with domestic natural gas, the pipeline will replace US$ 240 million/year in liquified natural gas imports (LNG). Suscribe, The pipeline from Vaca Muerta is one of the most important infrastructure projects that we have ahead of us, said Energy Secretary Gustavo Lopetegui, The pipeline will extend 570km from the Tratayén processing plant in Neuquén province to the Saturno compressor station in Salliqueló, Buenos Aires province. All quotes delayed a minimum of 15 minutes. The LNG was produced on Exmar NV’s floating LNG production barge called Tango FLNG, at the Bahía Blanca port, and using natural gas piped in from Vaca Muerta. YPF announced today that a preliminary agreement was reached with Excelerate Energy for the charter of an LNG carrier, which will export Argentina’s excess LNG to … This seasonal dynamic could attract Asian buyers and present a strong economic case for Argentinian LNG. Argentina seeks to become one of the few exporting countries of LNG through international sales of leftover gas in summer periods when local demand is … Vaca Muerta shale formation has 308 trillion cubic feet of natural gas and 16 billion barrels of oil and condensate of recoverable resources within 8.6 million acres. Being a frontrunner in both innovative energy, propulsion, automation solutions we are a unique partner to keep your assets in a safe, reliable and […], EIA: Vaca Muerta gas production increase leads to LNG exports from Argentina, EIA: U.S. hits new natural gas highs in 2019, EIA: U.S. LNG exports see minimal impact from Hurricane Delta, Argentinian TecPlata terminal starts receiving imports from Far East, EIA: US LNG exports to dip to just 25 pct capacity. Argentina plans to discontinue LNG imports as domestic gas production increases over the next few years, even as it pays less for the supplies after ending the alleged corrupt practices of the previous administration in the gas trade, President Mauricio Macri said Wednesday. The seasonality of its output could be also seen as a virtue for Asian utilities that are looking to contract just for their peaking demand months in the northern hemisphere. Montevideo, October 29th 2020 - 20:44 UTC. Rising natural gas production in Argentina, coupled with competitive global LNG transportation costs, is expected to position the country as an emerging source of gas supply to Asia during peak demand periods. South America’s first LNG import terminal. The pipeline’s capacity will be 15 MMm3/d, or 530 MMcf/d, with the option to expand to 40 MMm3/d in future stages, depending on the growth of Vaca Muerta production and future gas demand in the country. "Nevertheless, not even the domestic demand and exports to neighbouring countries such as Chile and Brazil are enough for Vaca Muerta's gas potential. ship for Japan. McDermott International Inc. in July was also awarded a “sizeable contract” by Argentina’s YPF SA to provide pre-FEED services for a 5-10 million metric ton/year (mmty) LNG liquefaction facility to serve producers developing the Vaca Muerta. Subscribe to our trusted data and analysis for global energy, chemicals, metals and mining industries. Sign-in to our platforms to access our extensive research, our latest insight, data and analytics and to connect to our industry experts. Excelerate Energy L.P. is a US-based LNG company located in The Woodlands, Texas. Argentina is conducting feasibility studies to identify potential natural gas storage sites,” EIA said. The growth in production sparked a restart of natural gas exporting via pipeline to Chile and Brazil as well as the start of LNG exports. Vaca Muerta LNG (Argentina) This is a project for construction a 5-MTPA LNG liquefaction facility with a potential expansion to 10 MTPA at the Vaca Muerta shale field in Argentina. The natural gas, produced mainly from Vaca Muerta, will be processed by the TANGO FLNG unit at the "Mega" port in Bahía Blanca, and from there, it will be transported by the LNG carrier EXCALIBUR, which has a storage capacity of 138,000 m3. If you would like to learn more about how we use cookies and how you can manage them, see our Cookie policy. Total natural gas production grew 5.8% in June, and Argentina is producing gas at its highest rate in 11 years. Gas distributors can now enjoy Galileo’s MX 1000 Pipeline Boosters. The country also started shipping out small scale LNG exports in June, the first of its kind. Despite other price challenges posed by the seasonal utilisation of LNG plants, Wood Mackenzie estimates breakevens for Argentina LNG of US$8/mmbtu at delivery ex. "Argentina's LNG could be interesting to players who want to diversify supply outside North America. Argentina faces stiff competition for LNG buyers as suppliers from the U.S. to Australia increase exports, adding to a global glut and sending prices for the fuel tumbling. “The pipeline will help us improve the country’s trade balance and increase production from Vaca Muerta, which means more work for Argentines, both in the area and in the entire industrial value chain,” Energy Secretary Gustavo Lopetegui said. A lack of underground natural gas storage facilities close to demand centres in Argentina means that gas flow to potential LNG export terminals will also be seasonal. Production from Vaca Muerta accounts for about 23 percent of Argentina’s total gross natural gas production. “This is the first step of a process that YPF is leading to export and expand gas markets to the world,” Marcos Browne, executive vice president of gas and electric power for YPF, said in the statement. Mauro Chavez Rodriguez, principal analyst, Latin America Gas & LNG, said: "Vaca Muerta's gas production has dramatically changed the outlook for Argentinian gas. Production from Vaca Muerta surpassed 1.0 bcf per day in December 2018. In this webinar we will present Wood Mackenzie independent analysis of the fundamentals and the economics of LNG exports in Argentina, we will analyse the pros and cons and if Argentina's LNG will be able to compete in the global landscape. YPF did not specify the destination of the shipment, which would be ready by mid-week, but said the sales operation was in the hands of U.S. firm Cheniere Energy Inc. Argentina seeks to become one of the few exporting countries of LNG through international sales of leftover gas in summer periods when local demand is lower, boosting the flow of dollars into the country. Reporting by Nicolas Misculin; Writing by Cassandra Garrison; Editing by Peter Cooney. Buy our reports to address business challenges and make better commercial decisions with objective insights, analyses and data.