Vaca Muerta in Argentina, one of the world’s largest shale deposits is rated to be one of the worlds largest largest gas exporters
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Flavia Royon, the Energy Secretary, announced that Argentina is focusing its efforts on increasing exports as the production of shale-gas deposits in Vaca Muerta increases. The first objective of the government’s plan is to stop gas imports entirely by 2024-2025, except during times of peak winter demand.
She said that the construction of a pipeline in Neuquen, with a large capacity, from Vaca Muerta is fueling exports. The Energy Summit was organized by the El Cronista newspaper.
In July, the pipeline named for former President Nestor Kirchner began operations with a capacity of 11 million cubic meters per day. The first section from Vaca Muerta into the provinces of Buenos Aires had been completed. By October or November, the addition of compression facilities will bring that up to 22 million cu m/d, and the 40 million cubic m/d capacity should be achieved by 2024’s second half, several months earlier than scheduled.
Royon stated that the distribution of shale gas in Argentina will be expanded with the reversion to a northern pipe to transport Vaca Muerta from Patagonia.
Royon stated that “Argentina will not need to import LNG from Bolivia or gas” due to the increased capacity of Vaca Muerta. We will be able to supply ourselves.
Argentina is leading the project of a pipeline to reduce the imports and exports of liquid fuels like diesel, and other alternatives such as gasoline. These have been the main drains on the country’s international reserves. It appears that the effort is working. Argentina had a US$4.4 billion energy deficit last year. Thanks to increasing exports and decreasing imports, it should be able to achieve a surplus this year of US$100m and US$3.7billion in 2024.
Royon added that liquid and gas alternatives would still be imported at times of high demand, such as during the winter heating season or droughts when hydropower is depleted. She added that these imports would not be regular.
Royon stated that “Argentina will not need to purchase large quantities of LNG.” With these infrastructure projects in place, Argentina will be able to substitute imports.
Vaca Muerta is the driving force behind this, as it’s one of the largest shale deposits in existence. It has been in development only for a decade and already produces 50% of the 140 million cubic meters of natural gas produced by the country, with the majority of that production occurring in Neuquen province. According to the government, the province’s gas production, led by Vaca Muerta will increase from 91.4 million cu m/d per day in July, to 140 million cubic meters/day in 2030. Argentina predicts the total production of gas in its country will be 174 million cu m/d.
This will bring gas production above the average annual output of 140 million cubic meters, but it is still short of the peak demand of 200 million cu. m./d.
Growth potential drives the creation of legislation and projects for the exportation of gas. Initially, it will be through existing pipelines, to Brazil, Chile, and Uruguay. Later, the gas can be exported liquefied to the world market.
Royon stated that Argentina has a great opportunity to take advantage of Vaca Muerta.
In early this year, Argentina presented a bill before Congress that would provide tax incentives and other financial incentives for companies to build liquefaction capability.
Three projects to construct liquefaction stations for gas export are currently in the feasibility phase. The project is a US$10 billion potential project between Malaysian Petronas and Argentina’s state-backed YPF, who have already reserved land at the Port of Bahia Blanca. This terminal will be supplied by a pipeline that has a capacity of 90 million cubic meters per day, allowing it to export over 25 million tons of LNG annually. The investment could reach up to US$40 million.
Royon stated that Argentina has the opportunity to benefit from the global gas demand in order to achieve net-zero emissions of carbon by 2050. She said, “We are in a good position to take advantage of LNG.” “Vaca Muerta is well-equipped to take full advantage.”
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