Argentina’s energy balance is expected to shift from a deficit of $600 million in 2023 to a surplus of $3.3 billion in 2024, according to a recent agreement between the government and the International Monetary Fund (IMF). This shift is largely due to the substitution of LNG imports with the full operation of the Néstor Kirchner Vaca Muerta Gas Pipeline. The completion of the pipeline will increase domestic gas transportation capacity and reduce LNG imports by $3.5 billion.
The IMF projects a surplus of $3.3 billion in the energy balance for 2024. G&G Energy Consultants estimates that the energy sector could contribute a trade surplus of about $3.8 billion this year and nearly double that balance in 2025, reaching about $7.5 billion. This is a significant improvement from the almost $4.5 billion energy trade deficit in 2022.
The completion of the second stage of the gas pipeline and the reversal of the flow in the North pipeline, scheduled for mid-2025, are expected to further reduce imports by another $700 million a year. However, due to delays in the bidding process, the government will advance a partial reversal of the Northern Gas Pipeline as planned for before the winter of 2024. This will result in the need to buy gas supply from Bolivia and Chile, in addition to electricity from Yacyretá.
The potential for increased crude oil exports is also significant, with projections indicating a steady rise from around 100 kbbl/d in 2023 to 900 kbbl/d in 2030, generating an additional $14 billion in exports annually. However, these figures are conditional on a macroeconomic and regulatory framework that supports the necessary investment in infrastructure.
The Ministry of Energy is pursuing deregulation to support investment in unconventional gas and oil reserves, with the aim of subsequently boosting exports. Legislation has also been presented to Congress to strengthen regulations and improve incentives for long-term investment in energy and mining, including green metals. These efforts are expected to further contribute to the strengthening of Argentina’s energy balance in the coming years.
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