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Argentina’s state oil and gas company YPF is loading the country’s first-ever export cargo of liquefied natural gas, Reuters reported, citing a company statement.
“This is the first step of a process that YPF is leading to export and expand gas markets to the world,” a company vice president said.
The cargo is the equivalent of 30,000 cubic meters and its sale is being handled by U.S. LNG major Cheniere Energy. The destination, however, has not been revealed.
The gas for the cargo was extracted from the coveted Vaca Muerta shale play—one of the world’s largest shale formations and Argentina’s great energy hope. Called “the Argentine Permian”, and the play that can turn Argentina from a net importer of oil and gas into a net exporter. According to Argentine government estimates, the Vaca Muerta could double the country’s oil production to 1 million bpd by 2023, with natural gas production rising to 260 million cubic meters daily.
YPF has estimated liquefied natural gas exports alone could bring in more than US$200 million. This would constitute a tenth of the company’s overall export revenues. According to plans, LNG will be exported during the summer season when local demand is at its lowest since Argentina is not yet producing enough gas for both domestic consumption and exports on a year-round basis.
Billions of dollars have been poured already into the Vaca Muerta, which could be the world’s second-largest gas deposit, but return is slow to come because of the lack of infrastructure in the area, which is boosting the cost of pretty much everything from frac sand to moving the output to export markets. Legislative changes have also affected the profitability prospects of operators in Vaca Muerta and have slowed down its development, with several companies postponing their investment plans for the area.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.