Argentina seeking $10 billion investment to jump-start LNG exports, minister says
By Eliana Raszewski
BUENOS AIRES (Reuters) – Argentina, battling a deep and dear power deficit, is seeking to entice some $10 billion in non-public funding to assist it soar begin exports of liquefied pure fuel (LNG) by 2027, financial system minister Martin Guzman mentioned on Wednesday.
Argentina is residence to the massive Vaca Muerta formation, the second largest shale fuel reserve on this planet, however lagging home manufacturing and pipeline capability have stored the South American nation a significant LNG importer to cowl winter demand.
Guzman informed power sector executives that Argentina, which wants liquefaction crops to transform its fuel to LNG, may hit exports of $15 billion by 2027, an formidable goal because it ramps up native output and builds a significant new fuel pipeline.
“We’re working with a gaggle of nations and corporations to be certain that if Argentina generates LNG manufacturing capability, then there might be demand for it,” he mentioned in a presentation.
International LNG costs have soared this 12 months, pushed up by the struggle in Ukraine and sanctions on main fuel exporter Russia. That is tipping Argentina in the direction of an power deficit that analysts have estimated as deep as $5 billion this 12 months.
Argentina would, nevertheless, must win over skeptical traders who harbor issues about authorities intervention available in the market, unclear regulation, strict controls on foreign money alternate, excessive inflation and the nation’s current debt crises.
Guzman mentioned the federal government was working to generate extra certainty for the sector and ease entry to overseas foreign money.
“It’s essential to facilitate direct overseas funding flows to the sector in Argentina,” he mentioned.
Olumide Ajayi, senior LNG analyst at Refinitiv, mentioned Argentina would be capable to minimize its import invoice by ramping up manufacturing in Vaca Muerta, although LNG costs and provide dynamics could also be tougher in 2027 than the present tight market.
“Within the midterm if they will ramp up Vaca Muerta and encourage funding into upstream they might start to quick observe LNG exports,” he mentioned.
“However by then it could possibly be too late as a result of different initiatives elsewhere have been already sanctioned in response to demand available in the market.”
(Reporting by Eliana Raszewki; Modifying by Nicolas Misculin, Adam Jourdan and David Gregorio)
