(Energy Analytics Institute, 30.Mar.2022) — Gazprom expressed interest in supplying liquefied natural gas (LNG) to Argentina to replace market share lost due to sanctions imposed by the US and Europe in response to Russia’s invasion of Ukraine.
Gazprom reportedly sent an offer to state-owned company Integración Energética Argentina (IEASA, formerly Enarsa) on 29 Mar. 2022 related to a tender for a second block of gas imports amid the start of Argentina’s winter period, El Cronista reported 30 Mar. However, the Russian company’s offer was not convenient in economic terms.
Other companies and traders that participated in the tender included Trafigura, Vitol, Naturgy, Shell and BP. Approximately eight LNG shipments were awarded, industry sources told El Cronista.
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Prices were around $40/MMBtu, which would be five times the total average for 2021, which was $8.33. The price band spanned from $35 to $45 and the eight shipments could cost Argentina more than $750mn in total.
Argentina, which is home to the prolific Vaca Muerta gas formation, struggles to cover gas demand during winter months and each year turns to LNG to plug the supply gab. Higher LNG prices this year have been brought about by the Ukraine war, which has led to a spike in LNG demand amid strained Russian gas and oil exports.
Throughout this winter, Argentina will need around 70 LNG shipments, but there is speculation there will only be physical availability for 30-35 shipments, since much of the LNG will be diverted to countries willing to pay higher prices.
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By Aaron Simonsky. © Energy Analytics Institute (EAI). All Rights Reserved.
