LatAmNRG Heard On The Street: Gas Markets, Argentina Tender

(Energy Analytics Institute, Aaron Simonsky and Ian Silverman, 25.Jun.2019) — Heard on the street related to the Latin America and Caribbean upstream, midstream, downstream and renewable energies sectors.

ARGENTINA

— During the first half of July a tender will be launched in Argentina for the construction of a new natural gas pipeline that will increase Vaca Muerta gas evacuation capacity, Argentina’s Energy Secretariat Gustavo Lopetegui said 14 June in an official statement.

— Echo Energy reports progress on the western cube last week, saying acquisition is now 90% complete, the company announced this week via Twitter.

— Neo Lithium Corp. says PB1-R-25 yielded an average of 1,117 mg/L Lithium, 11,319 mg/L K, Mg/Li=1.59 and SO4/Li=0.1 over 178 m from 87 to 265m depth. Drill result validate additional high-grade lithium brine below the area in Argentina where the resource and reserve was defined in the PFS to only 10 metres in depth, Neo said in a statement.

BOLIVIA

— Bolivia will soon have new markets in Brazil, Argentina, Peru and Paraguay, Bolivia’s Hydrocarbons Minister Luis Alberto Sánchez said 17 June during the Bolivian television program ‘El Pueblo Es Noticia.’

— Bolivia’s economy expected to growh 4.5% in 2019, La Razón reported, citing the country’s Vice Minister of Budgets Jaime Durán.

— Bolivia continues to move forward with urea and LPG sales to Paraguay, Brazil, Argentina and Peru, ABI says.

ECUADOR

— EP Petroecuador has recycled 313,558 plastic bottles using the Tritubot system inaugurated on 8 February 2019

— Ecuador’s new Hydrocarbons Vice Minister Juan Carlos Bermeo Calderón

“The richness and variety of GeoPark’s deep organic project inventory, over our expansive Latin American platform, provides multiple upside growth drivers and secures downside protection across this big, exciting, underexplored continent.”

GeoPark Limited Chief Executive Officer James F. Park said 3 June in an official company statement.

MEXICO

— Mexico’s Energy Secretariat Rocio Nahle says revamp of Pemex’s six refineries to be finished by mid-2020, SENER says via Twitter.

“The Dos Bocas Refinery will mark the beginning of the recovery of national security, through the full exercise of sovereignty over our energy resources, especially our oil”

Pemex General Director Octavio Romero Oropeza said 2 June in an official company statement.

— Mexico’s President Andrés Manuel López Obrador says Ixachi field to produce 80,000 b/d of light oil and more than 600 MMcf/d of natural gas by 2022, up from 3,900 b/d and 30 MMcf/d, respectively.

— The deepwater projects are longer term and possibly outside of what AMLO and his administration can do while in office, thus, why they are not showing as much interest in them as the political benefit declines.

VENEZUELA

— Venezuela’s supplies of gasoline are trending extremely low and it is rumored the OPEC member country has enough supply to only last it another month or so.

— PDVSA’s hydrodesulphurizing plant 3 (HDAY3) at its Amuay refinery is back on line, as of 13 June, the company said in a statement.

REGION GAS MARKET

The natural gas market in the Latin America and Caribbean region remains attractive, a source covering the region tells Energy Analytics Institute.

What follows are excerpts from our conversation:

— Some operators have a unique gas position in terms of potential but bringing production online and in a timely manner may still produce a deficit in supply over the medium term, the source says.

— Trinidad’s market has eroded significantly because of pressure from US LNG, which is notably cheaper. Looking at the larger and historic export markets (Spain, Brazil, Argentina and Chile) much of this demand over the next several years will be satisfied by US LNG (Spain) or domestic production/regional piped trade, the source says.

— Investment is still needed in Brazil and Argentina in terms of infrastructure projects to bring online pre-salt associated gas in Brazil and similarly assisting to send Vaca Muerta gas to Buenos Aires/Rosario as well as being able to store gas to meet seasonal demand. Chile now importing piped gas from Argentina helps alleviate their LNG needs but not entirely, the source says.

— In terms of spot cargo prices US LNG is probably the most competitive source out there just now both in terms of feedstock volume and price. As more infrastructure projects get the green light bringing Permian gas to the Gulf Coast. Spot prices could fall even further. In short there is probably no destination in Latam/Caribbean that won’t look to US LNG to be their main supplier, the source says.

— Moving gas from Peru LNG through the Panama Canal to get to the regasification terminal in Cartagena is attractive but would increase cost from a time and money perspective. The real prize for Peru LNG is of course their ‘proximity’ to the Asia markets which is something that US LNG probably won’t be able to compete with due to the location of the liquefaction plants as they exist just now (although the East Asian market is heavily oversupplied and contract volumes have been locked in over the next decade from other sources), the sources says.

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© Energy Analytics Institute (EAI)

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