Argentina negotiates gas imports with Bolivia and Chile after heatwave increases demand

Bolivia and Chile have begun talks to resume gas exports to Argentina, amid a spike in demand sparked by a heatwave this summer. This highlights the challenges facing the government of Buenos Aires in its quest to become self-sufficient in energy.

Armin Dorgathen Taia, the head of Bolivia's state energy company YPFB told me by phone on Friday that "we are in a negotiations with Argentina to create a contract spot". These talks were previously unknown.

In a Friday statement, Chilean authorities also stated that they expected to reach a new deal with Argentina for the supply of gas to Chile's remote northern region. The energy ministry has said that up to 2.5 million cubic metres of natural gas can be shipped daily through September.

In September, after nearly two decades of exports to Argentina from Bolivia, the country increased its domestic production using its vast Vaca Muerta shale and began shifting toward becoming a net exporter of energy.

Bolivia's production of gas has been declining over the past decade, with few discoveries. Yacimientos Petroliferos Fiscales Bolivianos has not had an active supply contract since last year.

The extreme heat in Buenos Aires this week and its surrounding areas has led to a spike in energy demand as Argentines turn up their air conditioners. This puts pressure on the domestic supply.

The YPFB President said that Bolivia is able to send gas to Argentina under a new, short-term contract of between six and twelve months.

Bolivia's gas supply is already committed to Brazil, as part of the recent agreement through 2027. However, some clients "don't require as much so we can still be flexible," said he.

YPFB said that Bolivia can even produce its own electricity to sell to Argentina.

Tapia continued, "There are many solutions."

YPFB warned, however, of a debt that was due from Argentina to the firm, which complicated future transactions. YPFB reported that Argentina was supposed to pay $10.6 million on Jan. 10, but it had not.

Tapia stated, "It is very difficult to believe that Argentina will pay for the gas we send them.

Enarsa, the state-owned energy company in Argentina, did not respond immediately to requests for comments. Reporting by Lucinda Elliot in Montevideo, Eliana Razewski and Alexander Villegas, in Buenos Aires, and Santiago, and editing by Adam Jourdan and Marianna Pararaga; Nia Williams, Rosalba OBrien and Marianna Parraga.

(source: Reuters)