MercoPress. South Atlantic News Agency

Bolivia and Argentina postpone decision on gas supply contract

This winter is going to be hard because Bolivia does not have the capacity to deliver the 14 MMm3/day that it delivered to the country last year, Aranguren explained

Bolivia's Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) and Integración Energética Argentina Sociedad Anónima (IEASA) agreed to postpone the decision on a sixth addendum to the contract for the supply of natural gas for yet another month, according to a YPFB statement relesed Friday. Negotiations had been previously extended for two months, which ended on March 31.

“During this period of time, the terms and conditions will be defined so that this agreement on the natural gas that Bolivia exports to northern Argentina will be positive for our economic reactivation,” the statement said.

Back then, the energy companies had agreed that 7.5 million cubic meters (MMm3d) of natural gas were to be pumped daily to Argentina, with the possibility of extending the volumes to 12 MMm3d in the Winter.

According to El Tribuno, Gasnor, the company in charge of natural gas distribution in northern Argentina, had announced earlier this week that shipments of Bolivian gas would amount to 10 MMm3/day. However, El Deber said YPFB was open to reaching 12 MMm3/day.

Under the new conditions, Argentina will pay between US$ 35 and US$ 45 per million BTU, the unit of measurement of Liquefied Natural Gas (LNG), according to Clarín. Last year, Argentina paid an average US$ 8.33 for the same product during the winter, but prices went up since Russia's invasion of Ukraine.

According to energy analysts, northern Argentina may suffer gas shortages if Bolivia does not comply with the delivery of 14 million cubic meters (MMm3/day) in the winter.

Argentina's Minister of Productive Development Matías Kulfas has acknowledged this week that in case of natural gas shortages, “coordinated” measures with industry businesses would be needed to optimize resources.

“We have closed with a volume of 7.5 MMm3/day with the Argentine market, with the intention to reach up to 12 MMm3/day during the winter. This is still in technical work as we need to send the remaining gas, in counter seasonality, to Brazil,” said the Bolivian oil company's executive president, Armin Dorgathen.

“This winter is going to be hard. We are not necessarily going to have the gas molecules we are used to,” said Argentina's former Energy Minister Juan José Aranguren. One of the reasons, he specified, is that “Bolivia does not have the capacity to deliver the 14 MMm3/day that it delivered to the country last year,” he went on.