EIA: Vaca Muerta gas production increase leads to LNG exports from Argentina

Gas production growth from Argentina’s Vaca Muerta has lead to exporting the country’s LNG, the Energy Information Administration (EIA) said.

According to information from the EIA, Argentina’s domestic natural gas production has been rising steadily in the past three years, largely due to increased production from the Neuquén Basin’s Vaca Muerta shale and tight gas play.

Production from Vaca Muerta surpassed 1.0 bcf per day in December 2018. The growth in production sparked a restart of natural gas exporting via pipeline to Chile and Brazil as well as the start of LNG exports.

Argentina’s first LNG export cargo was shipped on June 6 from the offshore Tango FLNG.

This recent growth in the country’s shale and tight gas production has partially offset declines in its natural gas production from mature fields.

Production from Vaca Muerta accounts for about 23 percent of Argentina’s total gross natural gas production. Vaca Muerta shale formation has 308 trillion cubic feet of natural gas and 16 billion barrels of oil and condensate of recoverable resources within 8.6 million acres.

EIA claims that the formation is geologically comparable to the Eagle Ford shale play in southern Texas and that only four percent of Vaca Muerta’s acreage entered the development phase so far.

The official energy statistics provider of the U.S. Government added that Argentina’s domestic natural gas production exceeds consumption during warmer months, but production is insufficient to meet demand during colder months (May through September) which requires Argentina to import gas by both pipeline and as LNG.

“Because Argentina doesn’t have geologically suitable formations to serve as large-scale natural gas storage facilities, natural gas producers have to shut in surplus production to accommodate seasonal consumption patterns. Argentina is conducting feasibility studies to identify potential natural gas storage sites,” EIA said.

From 1990 through 2007, Argentina was a net exporter of natural gas. Since then, Argentina has been importing more natural gas. Argentina imports LNG using an FSRU moored at the Escobar port near Buenos Aires.

Since becoming a net natural gas importer in 2008, Argentina imported natural gas throughout the year. In the last two years, with the growth in domestic production, Argentina has been importing LNG only during cooler months (March through October).

Argentina will likely continue importing LNG during cooler months until additional pipeline infrastructure is built.

Argentina’s seasonal demand patterns—counter to countries in the Northern Hemisphere—allow Argentina to export when major LNG consuming countries in Asia are importing.

Natural gas from Vaca Muerta is transported by pipeline to the port of Bahía Blanca, where it is liquefied at Tango FLNG. These pipelines were previously used for imported LNG from an FSRU at Bahía Blanca.

Tango FLNG has an LNG production capacity of 500,000 metric tons and is expected to produce up to eight LNG-export cargoes per year. Additional investments in onshore liquefaction facilities and pipeline infrastructure are required for the use of additional floating LNG-production vessels.