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Another LNG regas project

August 14, 2007

In the usual out-of-the-blue style, President Hugo Chávez surprised markets by announcing that he and his Argentine counterpart Néstor Kirchner will through the state-owned energy companies build a $400-million regas plant at possibly Bahía Blanca, located about 600km south of Buenos Aires. Supposedly the output of the regas plant will be 10 million cu m/d and take two years to build.

Enarsa will control 51% with PdVSA of Venezuela having 49%.

The project, like recent Argentine government plans to build 1.5GW of gas-fired power plants by 2008, has left some scratching their heads on this one.

Venezuela has aspired since the 1980s to build a liquefaction plant called then the Cristobal Colón project, which has been renamed Mariscal Sucre. PdVSA has tried without luck to build the$2.7-billion liquefaction plant with ExxonMobil, Shell, Mitsubishi, QatarGas, Repsol YPF and lately with Petrobras.

One of the reasons why PdVSA has had a hard time launching the plant with a partner is cost and the close proximity of Trinidad & Tobago, the biggest LNG exporter in the region. Some believe that it would be more convenient for Venezuela to supply gas to Trinidad & Tobago rather than start to compete with the tiny Caribbean country.

So here’s the question: Where is Venezuela going to get the LNG and how many ships does it have at its disposal to transport the liquefied gas to Argentina?

Could somebody tell me what I don’t know?

2 Comments leave one →
  1. January 8, 2009 8:24 pm

    Does Argentina have other regas facilities, or will the proposed Bahia Blanca project be the only LNG regas in Argentina? Also, since your analysis was published, haven’t the dynamics changed yet again between Chavez/Morales and Brazil, Argentina, and Chile?

    Thanks for your analysis. Very interesting, particularly with potential Argentinean links back to the Middle East.

    • Enrique Tessieri permalink*
      January 9, 2009 6:20 am

      Hi Tom and thank you for your post.
      Yes, a lot of things have happened since I wrote that short piece. One of the biggest ones today is if Argentina needs a second regas terminal. As you know, there are presently two: the floating regas terminal at Bahía Blanca leased from Excelerate Energy for the winter months and plans to build an onland terminal with PdVSA.
      Due to the financial turmoil, economic growth in South America in general and Argentina and Brazil in particular will cool. Petrobras already announced that it will import less piped dry gas from Bolivia.
      The big question facing Evo Morales’ government is the following: If the country could not attract upstream investments during good economic times, surely it will be more difficult during the present economic downturn. There will be a lot of trouble up the political road in Bolivia.

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