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Argentina To Start First-Ever LNG Exports In 2019

YPF gas

Argentina will be joining the ranks of exporters of liquefied natural gas (LNG) next year when it stars exporting gas from its Vaca Muerta shale play.

Argentina’s energy firm YPF and Belgian energy shipping company Exmar have signed a ten-year agreement, under which Exmar will deploy a floating LNG unit (FLNG) to the Port of Bahía Blanca in the second quarter of 2019, Exmar said on Wednesday.

The FLNG unit will be redeployed as Tango FLNG to produce and export LNG from Vaca Muerta, one of the few shale gas plays in production outside the United States.

Thanks to the deal, Argentina will become part of the “select club of global LNG exporting nations, with an initial plan to export 500,000 tons of LNG per year to overseas markets,” Exmar said in a statement.

“Thanks to the commercial relationship with EXMAR we are now able to add value to the resources extracted from Vaca Muerta, and take full advantage of the seasonal opportunity with Asian markets and our unique location to serve demand centers”, YPF President Miguel Gutierrez said.

Argentina’s natural gas demand is highly seasonal, with peak demand in the Argentinian winter and significantly lower consumption during the summer months.

In October, as the Argentinian summer was approaching, the economy was shrinking, and demand for natural gas dropping, YPF was said to be scaling back its natural gas output and halting production at some wells.

Given the seasonality in Argentina’s natural gas demand, Texas-based LNG company Excelerate Energy and Argentina’s Transportadora de Gas del Sur signed in September a memorandum of understanding to jointly study the technical and commercial viability of an LNG project at the Bahía Blanca port city for liquefying and exporting natural gas during the summer season. The companies expect to complete the study by the end of this year.

By Tsvetana Paraskova for Oilprice.com

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