MercoPress. South Atlantic News Agency

Bolivia's gas output problems spells collapse for Argentine reserves

Argentine authorities are already speaking of a “collapse” in gas reserves

Just when the deal between IEASA and Bolivia's YPFB for the supply of gas is about to end (Jan. 31), Argentina has been offered 35% less for the winter compared to previous years, it was reported.

The Bolivian state-run company has proposed to pump nine million cubic meters per day (MMm3/d), or 35.71% less than the gas sent last year, when it reached 14 MMm3/d.

YPFB claims the reduction stemmed from a decline in productivity, which would make the 14 million m3 / day mark unattainable, while the company feels it can meet 9 million m3 per day.

As per the current agreement, Bolivia is to send over 14 MMm3/d of natural gas for the winter season and 8 million in the summer, which YPFB already had troubles meeting in October due to output problems in Campo Margarita.

The new offer poses a serious problem to Ieasa and the Argentine authorities, since the 5 million m3 deficit would need to be replaced with the more expensive liquefied natural gas (LNG) which needs to be imported from elsewhere and which is not suitable to all thermal power plants in Argentina. Therefore, the local electricity supply would also be jeopardized.

”The Bolivian impossibility, due to the drop in production, worries Argentine negotiators since the difference must be liquefied natural gas (LNG) imported from overseas at prices up to four times more expensive, plus transportation from the coast of Buenos Aires to northern provinces,“ Radar Energético reported.

Argentine authorities are already speaking of a ”collapse” in gas reserves, since they were expecting to buy 12 million m3 / day and not two thirds that amount, which is therefore far below expectations.

Bolivia and Argentina must negotiate before Jan. 31 the new addendum to the natural gas purchase-sale contract.