Argentina to Attack Inflation While Pursuing Gas Opportunities

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(Energy Analytics Institute, 9.Mar.2022) — Argentina’s economy grew around 10.3% in 2021 but one of the country’s primary headwinds relates to taming inflation, the country’s Economic Minister Martín Guzmán said from Houston, Texas.

“The principal objective of the macroeconomic policy is to attack inflation in an economy that is recovering amid an international context of unfavorably high prices,” Guzmán said during a press conference on the sidelines of CERAWeek by S&P Global with select media outlets.

“Development of the energy sector is strategic and not just a question of development and competitive conditions in the sector but also stability related to balance of payments,” Guzmán said, responding to a question from Energy Analytics Institute (EAI).

While in Houston, the minister and his entourage meet with companies from Total, Chevron, and Shell to Equinor, among others. All expressed continued interest in investing in Argentina, the minister said.

Guzmán also had what he called “a good meeting with the US Energy Secretary.”

Gas Sector Key

Argentina is home to the second largest technically recoverable shale gas resources with 802 trillion cubic feet (Tcf), only trailing China with its 1,115 Tcf, according to EIA estimates from its benchmark 2013 study.

The gas sector is one of Argentina’s key sectors “where there is strong opportunity, and we’re working to construct conditions to make this development possible,” Guzmán said.

The Nestor Krichner gas pipeline recently commenced, and it will connect the south and north of the country and “elevate the transport capacity and allow for scaled expansion of production in Vaca Muerta,” the minister said.

RELATED STORY: NRGBriefs: Argentina’s Vaca Muerta-San Jerónimo Pipeline

Argentina’s development plans for the sector entail boosting infrastructure with adequate investments.

“Our plans are to invest more in public infrastructure, science and technology while also progressively reducing energy subsidies,” Guzmán added.

Gas and LNG

Argentina’s gas production in January 2022 was around 130 million cubic meters per day (MMcm/d), according to Energy Secretariat data. The recently launched Plan Gas.Ar aims to slow gas production declines in Argentina.

RELATED STORY: Neuquén Province January 2022 Production Rises YOY

Production has risen and the country no longer has gas pipeline capacity that’s why the second phase of Nestor Kirchner pipeline was launched, Argentina’s Energy Secretariat Darío Martínez said during the press conference.

“The infrastructure for the gas pipeline will take time but we expect to have the first stage installed by the winter of 2023. The primary objective of the gas pipeline is to stop importing LNG and stop burning fuel to generate electricity in Argentina. This will generate import savings… and could allow us to be a provider to the region from Chile, Brazil, and Uruguay with gas from Vaca Muerta.”

But, in the meantime amid arrival of winter and higher energy demand, the country would probably have to import more gas, the secretariat said.

RELATED STORY: NRGBriefs: Argentina Asks Users to Reduce Energy Demand

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