Bolivia Sends Less Gas, and Argentina Sees A Breach

Bolivia sent an average of 10.2 million cubic meters of natural gas to the Argentine market in January. Almost one million less than what was established in the contract. To cover its deficit, Argentina had to import LNG, liquefied natural gas.

ENARGAS, the National Gas Regulatory Entity of Argentina, published the statistical information on its website. According to it, between January 21 and 30, the neighboring nation had to import additional volumes of LNG due to lower deliveries from Bolivia. Currently, deliveries of energy to the Argentine market were below 10 million cubic meters per day.

YPFB, the Bolivian state-owned enterprise, and IEASA, a state-owned company in Argentina, signed the fourth appendix to the contract for the purchase and sale of gas. The appendix states that this year, the Bolivian oil company must deliver 11 million cubic meters of gas per day.

Argentinian Río Negro newspaper published a note on the website yesterday. It states that a heatwave triggered the demand for electricity. To activate thermal power plants, Argentina had to use not only the part of the LNG reserves but also diesel and even coal.  This situation made it clear that the Bolivian Fiscal Petroleum Deposits caused a lack of natural gas. The contract with Argentina underwent violation, said the newspaper.

Brazil Takes Priority Over Argentina

Alvaro Rios Roca, a managing partner of Gas Energy Latin America and former Minister of Hydrocarbons, states that the cut in natural gas exports to Argentina has several reasons. On the one hand,  a drop in Bolivian production caused this. But at the same time, YPFB prioritized contracts with Brazil. There is a drop in Bolivian gas production. Last year it amounted to 54 million cubic meters per day.  And this year it is 53 million, said Rios Roca in an interview with the Argentine newspaper. He added that in this situation of lower production, the contract with Brazil takes precedence over the contract with Argentina.

Until March 10, the contract with Brazil requests 31.08 million cubic meters, adding that Bolivia’s local market consumes about 13 million cubic meters. That leaves about 8 to 9 million cubic meters for Argentina that is effectively less than what the current appendix marks, he explained.

The consultant and former Minister of Hydrocarbons remarked that there is a breach of 1.5 million cubic meters per day for about ten days. In the contract with Brazil, it will continue until March 10. In the extension of the contract, some penalties make it privileged over Argentina.