(Argus, 6.Dec.2019) — Chilean imports of liquefied natural gas have fallen to their lowest level in at least three years as the South American country imports more gas from neighboring Argentina.
Chile imported just 132,850 mt of LNG in October, according to the latest government data, down 24.9% from September and down 46.2% from the same month of 2018.
All the LNG imported during the month came from the US, which this year has replaced Trinidad and Tobago as the main source of the fuel.
Meanwhile, imports of natural gas pumped across the Andes from Argentina reached 330,120 mt in October, up threefold from 12 months earlier and their highest level since Argentina resumed large-scale gas exports in late 2018.
Total monthly gas imports reached 463,000 mt, up a third from 12 months earlier.
BOOST FROM VACA MUERTA
Argentina is ramping up production of oil and gas from the giant Vaca Muerta shale field in the southern province of Neuquen, reducing its reliance on imported fossil fuels and allowing it to resume large-scale exports for the first time in a decade.
Earlier this year it exported its first cargo of LNG.
Several Chilean power companies have signed contracts with Argentinian gas producers to supply their thermoelectric plants, reducing demand for LNG.
Imports of LNG during the first 10 months of the year totaled 2.23 million mt, down 5.7% from the same period last year, while imports of natural gas from Argentina have risen more than fivefold to 1.75 million mt, according to the monthly report by Chile’s national energy commission.
The availability of natural gas for export, however, heavily depends on domestic demand, which rises sharply during the Southern Hemisphere winter when Argentinians turn on the heating.
CHILE’S HYDRO GENERATION RISES
Chile became one of the largest importers of LNG in the Southern Hemisphere after Buenos Aires cut off natural gas supplies a decade ago as it struggled to deal with a domestic energy shortfall.
Chile was also one of the first countries to begin importing US LNG after the launch of Cheniere Energy’s Sabine Pass liquefaction facility in Louisiana in early 2016.
Unlike with LNG from other suppliers, a 2003 free trade agreement means cargoes from the US are not subject to Chile’s 6% import tariff.
The rise in gas imports come despite a sharp fall in demand for the fuel from Chile’s electricity sector this year. Government data showed that gas-fired power plants generated 820 MWh of electricity in November, down from an interyear peak of 1,606 MWh reached last April. The fall mirrors a rise in hydroelectric generation over the same period.
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