Executive: Bolivia and Argentina in talks to restart gas supply due to spike in demand

Bolivia's state energy company YPFB has begun talks with Argentina to resume gas exports, 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 Tapiea, the YPFB's chief, told a reporter by phone on Friday that "we are in a discussion with Argentina about creating a spot contract." These talks were previously unknown.

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 contracted to Brazil, as part of an agreement signed in recent months. However, some clients do not demand the same amount.

YPFB said that Bolivia could generate its own electricity to sell to Argentina.

Tapia continued, "There are many solutions."

YPFB warned, however, of a debt due from Argentina that could complicate future transactions. YPFB reported that Argentina was supposed to pay $10.6 million on Jan. 10, but hadn't done so.

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, and Eliana Raszewski from Buenos Aires. Editing by Adam Jourdan, Niall Williams and Adam Jourdan.

(source: Reuters)