Argentina will start exporting liquefied natural gas (LNG) from the second quarter of 2019 from its resource-rich Vaca Muerta shale play.
Belgian energy shipping firm EXMAR announced Wednesday in a statement that it signed a long-term contract with Argentina's energy company YPF to produce and export LNG from the Port of Bahia Bianca located in the country's east.
The initial plan, according to the contract, is to export 500,000 tons of LNG every year to overseas markets, the statement said, adding up to eight LNG cargoes per year will be produced over a ten-year period.
The ten-year contract will deploy EXMAR's floating LNG liquefaction unit (FLNG) to Argentina in order to produce and export LNG from the Vaca Muerta source at the Neuquen Basin located in the western part of the country.
LNG's popularity increased in recent years as it provides consumers the mobility and supply diversification whereas piped natural gas can only be supplied from a single source country. The growing numbers of LNG facilities around the globe both increases the availability and decreases the prices of the commodity.
The Argentinian exports will join the ranks of growing exports volumes, which are currently led by Qatar, Australia and Malaysia.
Vaca Muerta is a geological formation of 30,000 square kilometers containing oil and gas found at a depth of more than 2,500 meters, located mainly in the province of Neuquen, according to YPF.
"The relevance of Vaca Muerta is so significant that the development of only a small part of this formation could cover the country’s energy deficit," YPF said on its website.
Argentina consumed 85.9 million tonnes of oil equivalent energy in 2017, according to the BP Statistical Review of World Energy 2018 report.
It produced 27.4 million tonnes of oil and 31.9 million tonnes of oil equivalent natural gas last year, according to the report.
"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", President of YPF Miguel Gutierrez said in the statement.
EXMAR’s Chief Executive Officer Nicolas Saverys said in the statement that the agreement "opens up new markets and opportunities for the fast-track monetization of natural gas reserves along new routes of energy."
By Ovunc Kutlu