Argentina to buy gas from Chile to meet peak winter demand, cut diesel imports
Argentina’s state energy company Enarsa has reached an agreement to buy 3.4 million cu m/d of natural gas from Chile to meet peak demand during the June-to-August winter period and reduce diesel imports, a source at Enarsa said.
The imports will be brought in from the Quinteros regasification terminal in Chile, the source said on the condition of not being named, citing company policy.
The supplies will compensate for less-than-expected imports of Bolivian gas this year, as that country struggles to maintain agreed deliveries. Bolivia has a contract to supply 20.5 million cu m/d this year, but is expected to send 2.5 million cu m/d less than that.
“We don’t expect Bolivia to meet its contract this year,” the source said. “The supplies from Chile will supplement what doesn’t come in from Bolivia.”
Argentina turned to Chile for the first time last year, bringing in 5 million cu m/d between May and August as Bolivia failed to meet its contract by 3.5 million cu m/d, according to Energy Ministry data.
The Chilean supplies supplemented imports of 16 million cu m/d from Bolivia and 12.7 million cu/d in sendout deliveries from two floating LNG regasification plants in Argentina, according to the data. Argentina imported 29.6 million cu m/d of gas in 2016, up from 29.4 million in 2015, the numbers show.
LOWER DIESEL IMPORTS
Chile’s regasifed supplies will trim diesel imports this winter as power plant fuel, saving the country $42 million over the period, the source said.
“We won’t have to import as much diesel, which is more expensive than gas and not as efficient for power plants,” the source said.
The gas is expected to replace 1.82 million barrels of the 11.3 million barrels of diesel supplies that Argentina expected to import this year for use as power plant fuel, the source said.
Enarsa agreed to pay $7.89/MMBtu for the supplies from Chile’s state energy company ENAP.
That’s more than the average of $5.87/MMBtu it is paying for LNG supplies between March and August, and the $4.94/MMBtu for supplies from Bolivia this winter, according to Enarsa. But it’s less than the equivalent of $12.20/MMBtu for diesel supplies this winter.
With the additional gas supplies from Chile, Enarsa expects residential demand will be met this winter, but other consumers could still face shortages at times of low temperatures.