Argentina Eyes Brazil Gas Exports,But Bolivia Transit Fees Pose Hurdle
Buenos Aires – Argentina is actively pursuing increased natural gas exports to Brazil,a move fueled by surging production from the Vaca muerta shale play. Though, realizing this potential hinges on navigating a key challenge: securing more favorable transit fees from Bolivia, or identifying alternative export routes, according to a leading gas transport executive.
Daniel Ridelener, Director General of Transportadora de Gas del Norte, emphasized that the ultimate success of these exports isn’t solely within Argentina’s control. “this final price doesn’t depend so much on Argentina, but on Bolivia and Brazil,” he stated during an interview at the Argentina Oil & Gas Expo in Buenos Aires.
Vaca Muerta Fuels Export Ambitions
Argentina’s burgeoning natural gas production, currently at 100 million cubic meters per day (cu m/d) from Vaca Muerta, is poised to reach 250 million cu m/d by 2030. this significant increase considerably exceeds domestic demand, averaging 140 million cu m/d, prompting producers to seek new markets. Brazil represents the most notable possibility, having expressed interest in importing 30 million cu m/d.
While existing pipelines connect Argentina to Brazil,Chile,and Uruguay,brazil is the primary focus. Spot sales to Brazil via Bolivia have already occurred this year, but long-term contracts remain elusive.
ridelener offered a more conservative estimate than Brazil’s stated demand, predicting exports could realistically reach 10-20 million cu m/d. Even at a starting point of 8 million cu m/d, he believes it would be a viable venture, justifying the estimated $1.6 billion investment needed in Argentinian infrastructure.
Pricing and bolivia’s Role: the Key Obstacles
Beyond volume, price competitiveness is paramount.Currently, Brazilian industrial users pay $15-$20 per million British thermal units (MMBtu) for gas, significantly higher than the $5-$6/MMBtu price in Argentina.
The most immediate route to Brazil utilizes existing, underutilized pipeline capacity thru bolivia. Bolivia, once a major gas supplier to Brazil, has experienced a dramatic decline in production – falling from a peak of 60.8 million cu m/d in 2014 to 28.6 million cu m/d in June. This decline makes leveraging thier pipeline infrastructure an attractive, low-investment option.
However, Bolivia’s transit fees are proving to be a major sticking point. ridelener revealed Bolivia charges $1.40-$1.90/MMBtu to transport gas 1,200 km to brazil, compared to just 50 cents/MMBtu for the same distance within Argentina.
“This is a conversation that we need to have,” Ridelener stated, highlighting the need for renegotiation. Without lower transit fees, or the growth of alternative export routes, Argentina’s ability to capitalize on the lucrative Brazilian market will be significantly hampered.
SEO Keywords: Argentina, Brazil, Natural Gas, Exports, Vaca Muerta, Bolivia, Transit Fees, Energy, South America, Commodity Insights, Pipeline, Gas Prices.
