Argentina Encourages More Domestic Natural Gas Production

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Argentine government continues with plans to spur an increase in natural gas production with the extension of its incentive plan, known as Plan Gas.Ar.

The extension is aimed at reinsuring and boosting hydrocarbon production, internal self-sufficiency, and exports.

The National Energy Department sanctioned the first phase of the plan in November 2020 with the goal of purchasing 70 million cubic meters per day (Cbm/d) of gas from 2021 to 2024.

In March 2021, the Gas.Ar 2 plan was launched for the purchase of additional volumes of natural gas during the winter season (May - September), complementing the contracts already awarded for 2021-2024. Producers in the Neuquén and Austral basins provided the gas for plans 1 and 2.

The third round, announced in October 2021, was aimed at increasing the national supply by 6 million Cbm/d, raising the total purchased gas capacity to 76 million Cbm/d, with increments for the winter season up to 2024.

With the fourth and fifth phases recently announced, the government seeks to maintain the capacity already contracted until 2028 and incorporate incremental production volumes from the Neuquina, Austral and Noroeste basins. These tenders will be key to filling the Néstor Kirchner gas pipeline in Vaca Muerta and replacing imports of liquefied gas and liquid fuels.

The fourth round focuses on accelerating production developments in the Neuquén basin to supply the President Nestor Kirchner Gas Pipeline, which is expected to transport 11 million cubic meters per day of natural gas starting in June 2023, plus 3 million Cbm/d that would be incorporated as of January 2024 with the start of operations at the Tratayen and Salliqueló compressor stations. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil and Gas Pipeline Project Database can click here for the Kirchner Gas Pipeline project report and click here for the Tratayen and Salliqueló compressor station reports.

Regarding winter demand, a 7 million Cbm/d contract is expected to be awarded to run in the high-demand season starting in 2024, with another 7 million to be incorporated as of May 2025. Both contracts would run until 2028.

Finally, the fifth phase of the plan has been split into two rounds, one focused on extending the commitments assumed by the producers of the Austral basin in the Gas.Ar1 plan and the other seeking to encourage new projects to increase production capacity in the Austral basin (Chubut, Santa Cruz and Tierra del Fuego states), and in the Northwest basin (Jujuy, Salta, Formosa, Chaco, Santiago del Estero, and Tucumán states). With this, the Energy Department seeks a better use of the existing national transport capacity, which is currently idle for the above-mentioned basins.

The volumes demanded with the fourth and fifth rounds of Gas.Ar plan do not include LNG export projects or the construction of the second section of the Nestor Kirchner gas pipeline, which in addition to incorporating greater demand, would open the door to future natural gas export projects to Brazil. Subscribers can click here for the related project report.

Among the announced liquefaction projects, the joint investment between state-controlled YPF (Buenos Aires, Argentina) and Petronas (Kuala Lumpur, Malaysia) stands out. The companies are working on the design of a liquefaction train to produce 5 million tons per year of LNG starting in 2027, with the possibility of expanding up to 25 million tons per year by incorporating another four trains in phases.

Subscribers can click here for the related project report. Industrial Info is tracking 275 active oil and gas production projects in Argentina, valued at US$16.38 billion. This includes US$4.3 billion worth of investments in the Neuquén Basin, US$431 million in the Austral Basin and US$6.5 million in the Noroeste Basin. Subscribers can click here for a list of detailed project reports.

Subscribers can click here for a list of all projects referenced in this article and click here for a list of related plant profiles.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).