Argentina Proposes Itself as a Global LNG Supplier

To begin mass production and export of liquefied natural gas, Argentina needs a strategic investment of five billion dollars.

Argentina has all the prerequisites to become the new global supplier of liquefied natural gas (LNG). According to Buenos Aires Pagina 12 newspaper, Argentina does not want to miss a unique opportunity to enter the global hydrocarbon market, which is undergoing a period of great changes after the start of the armed conflict in Ukraine. Last week, Argentina has banned the unloading of a vessel, carrying Russian LNG, at Bahia Blanca terminals “because this would violate the regime of international sanctions.”

Thus, Buenos Aires offers itself as a potential energy partner for European countries. According to Página 12, “it is true that in recent months the Old Continent has managed to accumulate a lot of gas in its warehouses, but there are still no sufficient guarantees of energy security in the 2023-2024 winter period.” In addition, natural gas presents the most important fuel for Europe during the energy transition, and the cooperation with Argentina offers European countries good prospects for energy stability. During a recent summit between the European Union and the Community of Latin American and Caribbean States (CELAC), Argentina satisfied a request by Brussels to “postpone for an unspecified period” its membership in the BRICS group of countries that comprises Brazil, Russia, India, China, and South Africa.

According to Argentina’s Deputy Minister of Hydrocarbons, Juan José, “We need to work very quickly to take advantage of the opportunity for the continued rise in LNG prices.” Argentina is trying to attract international investment to start commercial exploitation of the huge Vaca Muerta reservoir, a geological formation the size of Switzerland, a real treasure chest full of extremely valuable shale hydrocarbons. To be able to start, Argentina needs at least five billion dollars. One of the financial partners of Argentina in this project may be China that is constantly looking for new sources of energy supply. But Europe is much closer: the distance between Argentina and Germany is 6,800 nautical miles, while the port of Bahia Blanca is more than 10,000 miles away from China.