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Argentina Moves Closer to LNG Exports From Vaca Muerta Shale

Argentina could be a step closer to start exporting LNG and monetizing its huge resource in the Vaca Muerta shale play after maritime LNG infrastructure firm Golar LNG signed a 20-year deal with Pan American Energy (PAE) for the deployment of a Floating Liquefied Natural Gas (FLNG) vessel in Argentina.  

“The FLNG project will monetize Argentine gas, tapping into the vast resources from the Vaca Muerta shale formation in the Neuquina Basin, the world's second-largest shale gas resources,” Golar LNG said.

The project is expected to start LNG exports by 2027, establishing Argentina as an LNG exporter, the company added.

Vaca Muerta—Spanish for ‘dead cow’—has been dubbed the Argentinian Permian, although its geologic properties have been compared more appropriately to the Eagle Ford

Argentina’s Vaca Muerta shale play is estimated to hold recoverable resources consisting of 16 billion barrels of oil and 308 trillion cubic feet of natural gas. Those numbers make the Vaca Muerta the world’s second-largest shale gas deposit.

Golar LNG’s deal for FLNG offshore Argentina is planned to be the first phase of a potential multi-vessel project, the company said, adding that “it is anticipated that other large natural gas producers in Argentina will join.”

“The project will provide an international outlet for Argentina’s vast and attractive natural gas reserves, creating value to Argentina and its gas stakeholders,” Karl Fredrik Staubo, chief executive officer of Golar LNG, said.

Argentina is also reportedly considering exporting gas from Vaca Muerta to Brazil via pipelines in Bolivia, by potentially reversing the flow northbound to Brazil.

Energy companies from the three South American countries have started talks, but progress has been slow and there are a lot of issues to overcome to make such gas flows happen, industry executives and analysts told Reuters earlier this year.  

Despite being South America’s top crude oil producer, Brazil has faced a shortfall of natural gas as its demand is soaring. The gap in supply has led to Brazil importing more LNG, especially when hydropower conditions aren’t optimal.

By Charles Kennedy for Oilprice.com

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