Argentina is close to reaching an agreement for gas supply with Bolivia. The scarcity that the industry expects for the winter could be greatly alleviated by the rains in Brazil, which allow for a little more hydroelectric power (the cheapest source of all) in the Yacyretá and Salto Grande dams, in addition to Bolivia can redirect its exports to these sides.
Although the agenda for the contract expired on March 31, Argentine officials continued to negotiate with their Bolivian counterparts. There is an expectation of having the same amount of gas that there was last year on the coldest days of the year. It would be 14 million cubic meters per day (MMm3/d), with the illusion that the Bolivian Fiscal Oilfields (YPFB) can be extended to 20 MMm3/d.
The base will be 10 MMm3/d, which would be paid at 8 dollars per million BTU. Above that, the volume will be paid with an extra prize of 10 dollars per million BTU, according to the EconoJournal portal. In this mission they continued at the close of this edition in the Ministry of Economy, the Secretariat of Energy and the state company Energy Integration Argentina (Ieasa) with the directors of YPFB.
Praying to the rain had its effect. In March, Brazil restored the levels of its reservoirs to about 70 percent. It means more cheap hydroelectric power for them and also, in a few weeks, for Argentina. In addition, the country governed by Jair Bolsonaro, which has priority to obtain gas from Bolivia, will need lower deliveries, which frees up the capacity for the fuel to flow through the North Gas Pipeline and meet the demand of provinces such as Jujuy, Salta and Tucumán. .
All in all, if Bolivia could meet 14 MMm3/d, it already provides a much calmer forecast for planning gas deliveries in the winter. In principle, it will avoid the purchase of liquefied gas and liquid fuels that today are above 35 and 25 dollars per million BTU.
Also, large Argentine industries such as Techint, Aluar, Arcor and Loma Negra could avoid cuts and scheduled shutdowns of their plants.
During the Argentina Oil & Gas exhibition, the CEO of PAE, Marcos Bulgheroni, starkly raised the energy problems that are coming as a result of the Russian invasion of Ukraine. “I can’t imagine a 2022 with international prices going down from current levels,” he said.