Enarsa, the state company that deals with the import of LNG, anticipated the purchase of 30 boats for the winter. You’ll pay an average of $20.60 per million BTU, the industry measure. Like this year’s budget indicated that they would pay approximately US$50/US$55 For this unit, Enarsa estimates there will be billions of dollars in savings.
Total, Vitol and BP were the winning traders. Each will bring 10 boats during the winter: one between May and June, another in July and the rest in August-September. Bids went as high as $29 per million BTUs.
The price of LNG has gone down lower demand in Europe.There they anticipated a tougher winter season than they had so far. European countries still have their deposits halfway through and believe they will reach them by the end of the year.
In general, a group of traders usually appears in these races. In addition to those mentioned above, Union Fenosa, Trafigura, Gunvor, Enarsa did not specify who participated. But market sources have indicated that Total, Vitol and BP are the winners.
Argentina requires more than 150 million cubic meters of gas during the winter. The country produces almost 100 million, but lacks the rest in the months of colder temperatures. Through the Vaca Muerta pipeline, local capacity will increase by approximately 11 million cubic meters. generating savings of US$900 million. It is because local gas costs a fifth (or less) than international gas.
Even if the Vaca Muerta pipeline will generate lower tax costs, it will still be necessary to resort to foreign LNG this winter. Only with the second phase of Vaca Muerta was it possible to double the transport capacity and further reduce imports.
Just as the high international gas price was a martyrdom for the Central Bank’s dollar reserves in 2022, now Argentina You will save compared to last year.
The purchase of each LNG “charge” was budgeted at approximately US$55 per million BTU. A ship would cost between 100 million dollars and 110 million dollars and, in this sense, the total expenditure would exceed 3,000 million dollars for this year.
But the upfront purchase will involve the payment of prices of US$ 20-21 per million BTU. In this case, each vessel purchased will be in the order of 30 to 40 million US dollars, depending on the size. The savings would be at least between 1,800 million and 2,000 million dollars.
During 2022, Argentina allocated US$2,700 for LNG imports. It paid an average of $29 per million BTUs, the industry standard. It was the highest price paid for that product. In 2021, it had paid $1.1 billion for that gas.
Although it is estimated that this year imports will decrease due to the construction of the gas pipeline that will connect Vaca Muerta with Buenos Aires, the country will still need foreign gas to get through the winter.
Each LNG tanker, which typically runs between $100 million and $110 million in the winter, could now be bought for $40 million. This would imply a lower spend of between $60 million and $70 million per “charge”. If this number is multiplied by 30, the number of ships Argentina will need, a relief of approximately $2,000 million is at stake.
Savings or losses? Some traders have bid for $29 per million BTUs. In this sense, if Enarsa buys at $20, it is saving.
The true size of the savings will be given when winter arrives and the new LNG price will be seen at that time. It is estimated that China, which consumed 23% less in 2022 due to its problems with Covid, and European countries will try to replenish stocks, and this will drive up the price.
If the price continues at current levels, Argentina will have guaranteed almost the entire foreign gas supply needed for the winter. The country will only have got a bad deal if the LNG is below US$20.
All expenses purchased now will go to the Regasification vessel Escobar. Although the Vaca Muerta pipeline will cause less need for imports (it will be replaced by domestic gas), the government will also enable the vessel to Bahía Blanca. For there, 8 more locations will be searched.
In 2022, Argentina used a lot of imported diesel for power plants, so as not to spend as much on gas. But this year, With better priced gas, perhaps that fuel isn’t needed.
Most generators prefer to use diesel fuel in their systems, as it causes less wear on the equipment.
Source: Clarin
