Argentina to buy 85-90 LNG cargoes this year

OREANDA-NEWS. May 11, 2016. Argentina is planning to import as many as 90 LNG cargoes this year, almost half of them during the southern hemisphere's winter when natural gas demand soars.

"Time will tell but it will be between 85 and 90," energy and mining minister Juan Jos? Aranguren said on the sidelines of an energy conference today.

Argentina has two LNG receiving terminals, at Bahia Blanca and Escobar in Buenos Aires province that were built after the country shifted from exporter to importer status in the late 2000s.

Over the winter months Argentina will buy "all those that we can get in, because it's all about maximizing the two terminals," Aranguren said.

The minister added that "around 40, 41" cargoes will be received in the winter months of June-August, when Argentina routinely suspends industrial gas supply to favor residential consumption that relies on the fuel for heating.

Aranguren said the country is currently paying an average of \$6.50/mnBtu for LNG imports.

Imports that are carried out through Escobar are more expensive at around \$6.80/mnBtu, reflecting the logistical challenges of operating in the terminal, while those carried out through Bah?a Blanca cost around \$5.70/mnBtu.

The increased LNG imports come at a time when the imported fuel can be cheaper than gas produced locally, which can cost as much as \$7.50/mnBtu, although the average price is closer to \$5/mnBtu.

In addition to upping LNG purchases, Argentina is also poised to begin unprecedented pipeline imports of gas from Chile this week. Once a reliable gas exporter for the Southern Cone, Argentina also imports pipeline gas from Bolivia at around \$3/mnBtu.

By importing more gas, the energy ministry is attempting to take advantage of lower international prices and offset imports of diesel, which thermal plants often burn during winter because of a shortage of supply.