Repsol YPF, Petrobras to Start Gas Exports in May

Spanish oil company Repsol YPF and Brazil's Petrobras plan to start exporting 4-6 million cubic meters of gas a day (mcf/d) to northern Argentina from Bolivia's Tarija department in May-June to help make up for domestic gas supply shortages in the winter, local newspapers reported. "This is to provide an energy cushion so in the case of peak demand in Argentina they can count on this supply," a Repsol YPF spokesperson told BNamericas.

Repsol YPF and Petrobras are currently negotiating the terms of the agreement with Argentine refiner Refinor, and expect to sign a deal within one month, the spokesperson said.

Newspapers reported Argentina would pay a spot price of US$1.40-1.50/mBTU for the gas, which is about three times what gas costs at the wellhead in Argentina, but the spokesperson said the price is one of the conditions being discussed.

The parties are also discussing which fields to use to ship the gas, as well as the volume and length of the contract. Petrobras operates the San Antonio and San Alberto fields in Tarija, and Repsol YPF operates the Margarita field.

The companies will export about 4-6mcf/d, depending on the season, through an existing pipeline that used to export Bolivian gas to Argentina until 1999, when the country became self-sufficient in the fuel. The pipeline, operated by Bolivian transport company Transredes, needs some repairs and will not be ready until May-June, but it should be complete in time to help cover Argentina's peak gas demand during winter months, the spokesperson said.

The deal is independent of the US$2bn Gasoducto del Noreste Argentino (GNA) project to transport gas from Bolivia to northeast Argentina from 2006. The companies currently export about 17mncf/d to Brazil through the Bolivia-Brazil pipeline, but "the volume we are talking about in Argentina is pretty low compared to the capacity of these fields, so they can easily withstand these exports and meet their sales obligations with Brazil," the spokesperson said.

The exports to Argentina are not large enough to replace the Pacific LNG consortium's proposed project to export gas to Mexico and/or the US, the spokesperson said. Repsol YPF leads the Pacific LNG consortium.

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