Argentina, Bolivia reach natural gas agreement
Argentine President, Alberto Fernandez and Bolivian President, Luis Arce reached a deal for Bolivia to export 14 MMm3d of natural gas to Argentina. This is a significant boost for Argentina, but not as high as hoped.
The deal will bring savings of $769 MM in foreign-exchange reserves and replace 14 vessels of increasingly expensive LNG, according to Energy Secretary, Dario Martinez.
Bolivia will also give priority to Argentina for further supply if it is able to increase its production.
Martinez said Argentina agreed to pay Bolivia an average $12.18 per MMBtu of natural gas, adding that international LNG prices were more than three times that and diesel prices were over twice as high.
"It is good news for the country, for Argentineans in general, for the central bank's foreign-exchange reserves and for the government's fiscal plan," Martinez said in a statement. "Considering the average price we got, the additional volume (from Bolivia) will allow us to save about $769 MM, and also replace 14 LNG ships."
Fernando Meiter, an analyst at Gas Energy Latin America, told local radio station Mitre on Friday that the deal was not enough to solve Argentina's natural gas deficit, as demand is seen at 120 MMm3d.
According to his calculation, the country would need to import about 70 LNG vessels in 2022.
(Reporting by Eliana Raszewski in Buenos Aires Writing by Gabriel Araujo Editing by Matthew Lewis)
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