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The Government seeks to advance the purchase of gas to save US$ 2,000 million


Enarsa will seek to buy gas now for the winter. He wants to take advantage of the fact that the price dropped almost 70% compared to the 2022 peak.

Just as the high international price of gas was a martyrdom for the Central Bank's dollar reserves during 2022, now there is a possibility that Argentina will

save heavily due to the drop in the price of that product.

Argentina needs imported gas between May and August, when the temperature drops.

Local production is

not enough

to supply demand and the country buys liquid gas (LNG) and fluid from Bolivia.

The state company Enarsa will launch a tender on Monday for the acquisition of these gas tankers.

It is estimated that it will seek to purchase around

30 LNG cargoes.

The purchase of each LNG “charge” was budgeted at about

US$55 per million BTU.

A ship would cost between US$100 million/US$110 million, and in this sense, the total expenditure would exceed US$3,000 million for this year.

But the price of gas fell.

Winter is being milder than expected for Europe and other countries that need imported gas.

The price is around US$ 21 per million BTU.

Enarsa sees an opportunity in that situation.

He plans to bring forward the purchase scheduled for the winter.

From Monday,

offers will be requested from traders of this product


If you manage to acquire 30 ships at $21 per million BTUs (a 62% drop from the original amount), you could end up paying around $1.2 billion.

It would be a saving of US$ 1,800 million with respect to what was agreed.

Economy Minister Sergio Masa stretched that potential benefit to US$2.4 billion in his latest statements.

During 2022, Argentina allocated US$2,700 to LNG imports.

He paid an average of $29 per million BTUs, the industry unit of measure.

It was the highest price paid for that product.

In 2021, it had paid US$1.1 billion for that gas.

Although it is estimated that imports will drop this year due to the construction of the gas pipeline linking Vaca Muerta with Buenos Aires, the country

will continue to need foreign gas to get through the winter.

The start of winter in Europe is being warmer than expected.

For this reason, industries and households in the northern hemisphere are demanding less gas than expected.

The price of the product plummeted in an unprecedented way.

Each LNG tanker, which is typically between $100 million and $110 million in the winter,

could now be had for $40 million.

That would imply a lower expenditure of between US$60 million and US$70 million per "charge".

If that number is multiplied by 30 -the number of ships that Argentina will need-, a relief of around US$ 2,000 million is at stake.

Enarsa is already surveying the main LNG traders, such as Total, Gunvor, Vitol, Trafigura, BP.

Traders also

have their own game


At the beginning of the year, they did not want to give up their product and preferred to retain it, according to sources familiar with these negotiations.

But now they see that the European Union has supplied its reserves, and would only begin to replenish them from April.

The marketers estimated that the temperatures could drop again by February and they would resume sales to most of Europe.

But they also believed that the largest economies of that continent - Germany, France, Italy, Spain - would already be in turmoil as a result of the high prices for heating.

So far, it hasn't happened and all eurozone growth forecasts have improved.

Russia was the main gas supplier to European countries


That business relationship was interrupted by the Russian invasion of Ukraine.

NATO and allied countries stockpiled gas to face a harsh winter.

They are not having it, at least for now.

Enarsa, headed by Agustín Gerez, has been moving for a month waiting for this situation of falling prices and will advance with the bidding from Monday.

On the other hand, the gas pipeline linking Vaca Muerta with Buenos Aires -whose cost will exceed $300,000 million- will save less than estimated.

When LNG was at US$36 per million BTU, the money the government stopped spending to replace foreign gas with national gas was close to US$3.6 billion.

Now, at US$21, what will not be disbursed is close to US$2,000 million.

In any case, national gas will be purchased at US$5, once the pipeline is active.

Outside, it is quoted four times more.

The numbers continue to show an abundant balance.

The real dimension of the savings can be seen in the winter, when the connection work is already in operation.

We will have to see the price of imported LNG at that time to determine the savings for this 2023.

The average temperature is also being a reason for celebration in the main European economies.

The German heavy industry -which requires a lot of gas- evaluated stops

and temporary closures if it did not get that input, or had to pay for it at high prices.

It was because the Government preferred to prioritize the demand for residential gas in the face of the cold.

The milder winter is allowing gas to be available for everyone: homes and industrial activity.

Source: clarin

All business articles on 2023-01-22

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