Argentina – home to the world’s second-largest shale gas field, could be the key for Europe to solve its current gas supply problem.
Forgotten gas depot
As Europe struggles to find an alternative to Russian gas, Argentina, home to the world’s second-largest shale gas field, is suddenly remembered by experts and the public.
However, the South American country is currently unable to help Europe. In fact, Argentina cannot even help itself to reduce its dependence on imported energy, even though it has huge resources in the Vaca Muerte field.
According to oilprice.com, development of the Vaca Muerta field has stagnated quite a bit over the past half-decade, due to the perennial economic crisis, the global oil and gas crisis, and Argentina’s foreign exchange restrictions.
Moreover, Argentina is having trouble expediting pipeline projects to bring gas from Vaca Muerta to neighboring countries as well as to the global liquefied petroleum gas (LNG) market.
Therefore, despite holding one of the largest shale gas fields on the planet, there is nothing Argentina can do to quench its global thirst for gas. Despite its potential as a major gas producer, Argentina spent billions of dollars importing LNG last year.
Attempts to revive
Over the past few years, Argentina has bet big on increasing crude oil and gas production at the Vaca Muerta field in the province of Neuquen.
The field is estimated to hold up to 16 billion barrels of oil and 308,000 billion cubic feet of natural gas. Those numbers make Vaca Muerta the world’s second-largest shale gas field today, according to oilprice.com.
However, Argentina missed the opportunity to take advantage of Vaca Muerta’s vast gas resources because it was unable to improve the infrastructure to bring that gas to places of great demand or to global markets.
Ngọn lửa bốc lên từ một cơ sở khai thác khí đốt ở mỏ Vaca Muerta. (Ảnh: Bloomberg).
If Argentina can make those strides, it could help defuse the current energy crisis as well as help the government reap significant revenue from gas exports, especially as Europe are willing to spend money to buy more goods.
In recent weeks, Argentine officials have taken a number of steps to speed up the development of the Vaca Muerta field and build pipelines to help the South American nation become self-sufficient in gas and export LNG abroad. .
Positive signs appeared, when authorities opened bids for a large gas pipeline, named after former President Néstor Kirchner, to connect the Vaca Muerta field with a port town north of Buenos Aires.
Last week, Argentina also announced that it would give energy companies easier access to foreign currency to speed up the development of the Vaca Muerta mine.
When announcing the decision, President Alberto Fernandez said: “Argentina has the energy source that the world needs. To take advantage of this, we have identified specific regulations to support investment and jobs in the energy sector.”
Argentina has tightened capital controls since 2019 to protect its foreign currency reserves. Now, with easy access to the dollar, energy companies can import specialized equipment for gas extraction.
Last week, Economy Minister Martin Guzman discussed with Rio Negro Governor Arabela Carreras the potential of a gas liquefaction plant and an LNG export facility in the province.
State-owned energy company YPF is also considering four sites in the provinces of Buenos Aires and Rio Negro to develop a large LNG project with an investment of about $11.5 billion and could help the company become an exporter. net energy exporter, President Pablo Gonzalez told state news agency Telam.
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