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Companies in Vaca Muerta, Argentina, are moving forward with exporting gas to Brazil, especially São Paulo, replacing the drop in Bolivian supply and reinforcing energy security.
Exports of natural gas from the Vaca Muerta formation in Argentina have gained momentum and promise to significantly change the Brazilian energy scenario, especially in São Paulo. Major energy companies, such as TotalEnergies, Gas Cono Sur, Tecpetrol and Pluspetrol, have signed at least nine contracts to supply more than 10,5 million cubic meters per day to Brazil, according to industry sources. The trend is for growth, with another five orders under analysis.
The Argentine strategy includes the use of existing infrastructure, prioritizing the Argentina-Bolivia-Brazil route, which should carry Vaca Muerta gas directly to Brazilian territory, alleviating Brazil's dependence on Bolivian gas — whose production faces a constant decline in reserves.
Bolivian reserves in rapid decline prompt change of course
The decision to replace Bolivian gas is no coincidence. Recent data from the US consultancy Ryder Scott Company reveals that Bolivia's proven natural gas reserves reached 4,04 TCF (trillion cubic feet) in December 2022.
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Even adding the categories “Proven + Probable + Possible”, the volume did not exceed 5,15 TCF.
In December 2023, proven reserves rose to 4,48 TCF, with a maximum potential of 5,24 TCF, considering the most optimistic scenario. Still, experts and local authorities criticize the lack of transparency in the data.
The 2024 certification, which should have been available since March, has not yet been presented by YPFB (Yacimientos Petrolíferos Fiscales Bolivianos), which increases uncertainty.
Vaca Muerta targets new markets while awaiting LNG infrastructure
Given this scenario, Vaca Muerta gas emerges as a strategic alternative to supply Brazil, especially while projects for its export as Liquefied Natural Gas (LNG) are yet to come to fruition.
The Neuquén Basin, where the Vaca Muerta geological formation is located, has attracted increasing interest from Brazilian buyers.
“We are looking for a steady supply, since Bolivia can no longer replace the depleted volumes and we are at the mercy of imported LNG to meet our market’s needs,” said an expert interviewed by the Petronotícias portal.
Contracts already signed focus on the Southeast and use the Bolivian network
The operations already have official approval. The Argentine government has authorized four exports destined for Brazil, with a special focus on the São Paulo region, which concentrates a large part of the national demand for natural gas.
The subsidiary Total Austral, linked to the French company TotalEnergies, signed a contract with MGAS Comercializadora to supply up to 1,5 million cubic meters per day, coming from the San Roque, Aguada Pichana Este and Rincón de la Ceniza fields, all located in Vaca Muerta.
In addition to MGAS, other Brazilian trading companies involved in the contracts are MTX Comercializadora, Edge Comercialização and Gas Bridge.
Logistical and tariff obstacles still challenge expansion
Despite the advances, the export of Argentine gas faces technical and regulatory obstacles.
Argentine state-owned company Enarsa has not yet completed the installation of a bidirectional meter on the Juana Azurduy Integration Gas Pipeline (Gija), which is essential for the reverse transport of gas to Bolivia. In addition, tariff issues are still pending approval.
The expectation is that the transportation cost will be around US$9 per million BTU. “If it arrives at Gasbol at this price, I think it is cheap. But we need to know if this price is at the entrance to Bolivia or in SP”, ponders an analyst in the sector.
Expectations for the gas market in São Paulo
Vaca Muerta gas is expected to gain prominence in São Paulo, Brazil's largest consumer market, which is suffering from fluctuations in Bolivian supply.
The diversification of routes and suppliers is seen as an urgent measure to ensure energy stability and competitiveness, both for the industrial sector and for residential consumers.
The entry of Argentine gas into the Brazilian market not only reinforces the country's energy security, but also opens up new possibilities for bilateral business, consolidating Vaca Muerta's role as one of the main production hubs in South America.
With information petronews.
