Brazil and Argentina Formalize Agreement for Natural Gas Exports…

Brazil and Argentina have signed an MOU to develop natural gas exports from Vaca Muerta to Brazil, potentially reaching imports of up to 30 mcm/d by 2030. Argentina’s YPF leads the initiative, which addresses Brazil’s gas supply shortfall and proposes various transportation routes to facilitate the exports. Vista Energy also plans a significant investment to expand operations in Vaca Muerta, reinforcing Argentina’s energy production capabilities.

Brazil and Argentina have entered into a Memorandum of Understanding (MOU) to develop infrastructure intended for the export of natural gas from Argentina’s Vaca Muerta region to Brazil. The initiative, reported by Reuters, responds to Brazil’s rising demand for domestic gas and could culminate in imports of as much as 30 million cubic meters per day (mcm/d) by 2030. The MOU establishes a collaborative working group tasked with identifying necessary measures to facilitate the gas supply from Argentina, focusing specifically on the Vaca Muerta shale formation, renowned as the world’s second-largest shale gas reserve. YPF, Argentina’s state-owned oil company, is spearheading efforts in Vaca Muerta with the goal of positioning the country as a significant energy exporter. The working group will examine various potential routes for gas transportation to Brazil. Minister of Mines and Energy for Brazil, Alexandre Silveira, indicated that the initial imports from Argentina could start at 3 mcm/d and have potential to increase to 30 mcm/d by 2030. Proposed transportation routes include reversing pipeline flows from Bolivia, passing through Paraguay, and traversing Uruguay. Furthermore, the feasibility of a direct connection at Uruguaiana, a Brazilian city adjacent to Argentina, will also be assessed. Despite being Latin America’s largest crude oil producer, Brazil’s gas production is currently inadequate to meet its domestic needs, making this project a priority for President Luiz Inacio Lula da Silva. In alignment with these developments, Vista Energy plans to invest approximately $1.1 billion (equivalent to 21.97 billion pesos) to expand its operations in Vaca Muerta this year, focusing on enhancing production capacity and reducing operational costs. The Vaca Muerta shale formation, noted for its expansive growth since its discovery, stands as one of the world’s largest shale developments outside of the United States.

This MOU signifies a strategic partnership aimed at enhancing energy cooperation between Brazil and Argentina, focusing on natural gas supply to meet the increasing domestic demands of Brazil. With Vaca Muerta being a critical asset for Argentina—capable of positioning the country as a key player in the energy market—the collaboration highlights both nations’ commitment to sustainable energy solutions. The initiative also addresses Brazil’s shortfall in gas production, paving the way for significant infrastructural developments to facilitate the energy trade between the two countries.

In summary, the agreement between Brazil and Argentina signals a proactive step towards addressing Brazil’s growing gas needs through the exploration of potential gas exports from Vaca Muerta. The establishment of a dedicated working group indicates a structured approach to identifying logistical solutions for gas transportation, ultimately aiming to strengthen energy security and foster regional cooperation in Latin America.

Original Source: www.offshore-technology.com