By Marco Curi
The situation in Bolivia is complicated after the claim of the Government of Argentina for the non-compliance in the sale of gas, since it has not been able to cover the volumes that were committed in the fifth addendum of the contract, which are 10 million cubic meters per day (MMm3/d) in summer and 18 MMm3/d in winter. From Bolivia, the state-owned Bolivian Fiscal Petroleum Deposits (YPFB), assures that they are negotiating.
“The negotiation with Bolivia for the sixth import addendum was postponed until the end of the month, but there are no great hopes of obtaining even the same volume of gas that was imported last winter, which totaled about 14 (MMm3/d)”, said the Secretary of Energy of Argentina, Darío Martínez, to the Río Negro portal. .
The neighboring country’s authority maintained that this is a major concern in the Argentine Northwest (NOA), where several thermal power plants depend on the gas sent by Bolivia. The portal La Política On Line reported that the The Argentine government, through the company Integración Energética Argentina SA (IEASA or former Enarsa), analyzes terminating the contracts with YPFB for breaching the agreed provision.
The latest addendum to the contract (which has already been renegotiated five times) which ended in December of last year, implied a daily supply of 10.7 MMm3/d in summer and 18 MMm3/d in winter. These volumes are in turn a renegotiation of the 2020 contract that established a daily supply throughout the year of 21.3 MMm3/d. For this reason, the new proposal of the Ministry of Energy for 2022 establishes a provision of 7 MMm3/d in summer and doubles it in the winter months. If Bolivia does not agree, it would have to return to the original contract that established 23 MMm3/d throughout the year.
Reviewing the official data (see infographic), it is evident that in 2021 the maximum volume that Bolivia sent to Argentina was 16.7 MMm3/d in March.
Critical situation
The economist and director of the technical department of the General Mosconi Argentine Institute of Energy, Julián Rojo, explained to the Río Negro newspaper that “they will send less amounts of gas. In fact, the Secretary of Energy in the report that it made for the gas hearing already put some estimated import quantities, with more LNG than gas from Bolivia.”
He assured that, in the same document, the body led by Martínez included gas prices, which are estimated at US$23.70 per LNG and US$7.46 for the value of the Bolivian resource.
In the opinion of energy analyst Francesco Záratti, Our country is going through a very delicate situation, since it cannot fulfill the contract with Argentina until 2026, with 27 MMm3/d and less the fifth addendum.
“From what I see that the Argentines have the frying pan in their hands, in the sense that they are importing more expensive LNG, so it can have repercussions not only in low volumes, but also in the decrease in prices,” said the expert.
In turn, the former Minister of Hydrocarbons, Mauricio Medinaceli, mentioned that the Bolivian breach has been going on for many years and recalled that the State had to pay a fine of US$100 million to Brazil under the gas contract. “Although I don’t think the contract will be dissolved, but the problem could be reflected in the purchase and if you can minimize the risk of not paying fines and that the export volumes are less and less,” he remarked.
For the director of Hydrocarbons, Mines and Energy of the Government of Santa Cruz, Eduardo Ibáñez, the current production values are the lowest in the last five years. He said that given the country’s gas production of 43 MMm3/d, minus 13 MMm3/d from the domestic market, 30 MMm3/d remain and with it 20 MMm3/d go to Brazil.
So, there are only 10 MMm3/d left for Argentina when they ask for 14 MMm3/d, therefore, the country will continue to default, affecting the trade relationship.
By Marco Curi
The situation in Bolivia is complicated after the claim of the Government of Argentina for the non-compliance in the sale of gas, since it has not been able to cover the volumes that were committed in the fifth addendum of the contract, which are 10 million cubic meters per day (MMm3/d) in summer and 18 MMm3/d in winter. From Bolivia, the state-owned Bolivian Fiscal Petroleum Deposits (YPFB), assures that they are negotiating.
“The negotiation with Bolivia for the sixth import addendum was postponed until the end of the month, but there are no great hopes of obtaining even the same volume of gas that was imported last winter, which totaled about 14 (MMm3/d)”, said the Secretary of Energy of Argentina, Darío Martínez, to the Río Negro portal. .
The neighboring country’s authority maintained that this is a major concern in the Argentine Northwest (NOA), where several thermal power plants depend on the gas sent by Bolivia. The portal La Política On Line reported that the The Argentine government, through the company Integración Energética Argentina SA (IEASA or former Enarsa), analyzes terminating the contracts with YPFB for breaching the agreed provision.
The latest addendum to the contract (which has already been renegotiated five times) which ended in December of last year, implied a daily supply of 10.7 MMm3/d in summer and 18 MMm3/d in winter. These volumes are in turn a renegotiation of the 2020 contract that established a daily supply throughout the year of 21.3 MMm3/d. For this reason, the new proposal of the Ministry of Energy for 2022 establishes a provision of 7 MMm3/d in summer and doubles it in the winter months. If Bolivia does not agree, it would have to return to the original contract that established 23 MMm3/d throughout the year.
Reviewing the official data (see infographic), it is evident that in 2021 the maximum volume that Bolivia sent to Argentina was 16.7 MMm3/d in March.
Critical situation
The economist and director of the technical department of the General Mosconi Argentine Institute of Energy, Julián Rojo, explained to the Río Negro newspaper that “they will send less amounts of gas. In fact, the Secretary of Energy in the report that it made for the gas hearing already put some estimated import quantities, with more LNG than gas from Bolivia.”
He assured that, in the same document, the body led by Martínez included gas prices, which are estimated at US$23.70 per LNG and US$7.46 for the value of the Bolivian resource.
In the opinion of energy analyst Francesco Záratti, Our country is going through a very delicate situation, since it cannot fulfill the contract with Argentina until 2026, with 27 MMm3/d and less the fifth addendum.
“From what I see that the Argentines have the frying pan in their hands, in the sense that they are importing more expensive LNG, so it can have repercussions not only in low volumes, but also in the decrease in prices,” said the expert.
In turn, the former Minister of Hydrocarbons, Mauricio Medinaceli, mentioned that the Bolivian breach has been going on for many years and recalled that the State had to pay a fine of US$100 million to Brazil under the gas contract. “Although I don’t think the contract will be dissolved, but the problem could be reflected in the purchase and if you can minimize the risk of not paying fines and that the export volumes are less and less,” he remarked.
For the director of Hydrocarbons, Mines and Energy of the Government of Santa Cruz, Eduardo Ibáñez, the current production values are the lowest in the last five years. He said that given the country’s gas production of 43 MMm3/d, minus 13 MMm3/d from the domestic market, 30 MMm3/d remain and with it 20 MMm3/d go to Brazil.
So, there are only 10 MMm3/d left for Argentina when they ask for 14 MMm3/d, therefore, the country will continue to default, affecting the trade relationship.
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