Excelerate Energy FSRU starts operations in Argentina
BUENOS AIRES, June 3, 2021 – Excelerate Energy’s Exemplar FSRU has started operations at the Ingeniero White port in Bahía Blanca, Argentina, to help cover the winter peak of natural gas demand in the country, the company announced on a press release on Tuesday.
The Exemplar, which has a regasification capacity of 17 mcm per day, will be operational for 98 days during the southern winter, when the natural gas demand for households and industries in Argentina peaks up to 170 mcm per day, compared to a 100-mcm-per-day consumption in summer.
The contract for this service is valued at USD 17 million and together with the other regasification unit in Escobar – also operated by Excelerate Energy – will help save the Argentine government around USD 350 million by using natural gas for power generation instead of costlier fuels such as fuel oil.
Argentine public energy company Integración Energética Argentina (IEASA) has already secured three LNG shipments valued at USD 800 million. The company has opened a bidding process for a total of 13 LNG shipments between May and September 2021 at a price of USD 7.20 per million BTU, to which USD 1.30 per million BTU has to be added under regasification costs, for which it will pay close to USD 290 million.
Argentina currently has a shortage of natural gas as the Vaca Muerta shale gas play and other gasfields are struggling to pick up the pace after a continued 18-month decline caused by the Covid-19 pandemic restrictions and recent protests in April in the Neuquén province by several unions.
The power generation facilities in the country that use gas oil, fuel oil and coal have a cost of up to USD 13.5 per million BTU, whereas locally produced gas from Neuquén costs USD 3.70 per million BTU. However, the Neuquina Basin is currently injecting 62 mcm per day of natural gas, almost 10% less than what the producing companies agreed to under the government sponsored Plan Gas, which aims to incentivise the local production of natural gas.
“We are proud to be able to collaborate with the country through our LNG services,” Gabriela Aguilar, general manager for Excelerate Energy Argentina, said in the press release. “The technical decision to use a regasification unit for the winter mirrors the global market tendencies in net exporting countries, such as the USA, Egypt and the UAE, who decide to import LNG for their peak demands and generate important savings.”
The savings comes at a critical time for the Argentine government as it struggles to retain hard currency much needed to cover strategic imports and pay public and private debt, specially the massive IMF credit acquired during the previous Macri administration, for which it is supposed to pay USD 57 billion by 2024.
Read our latest insights on:
Ports and the energy transitionINTERVIEW