Argentine energy markets

Argentina is one of South America’s most important economies and one of the major players in the regional energy sector. Argentina’s GDP growth rates were in the range of -4.1% to 0.9% from 1999 through mid 2001, and they plummeted to -16.3% in the first quarter of 2002 and GDP growth rates rebounded impressively before the economy lapsed back into recession.

Argentinean energy resources and use

Argentina’s oil reserves are currently estimated at 2.6 billion bbls, with a reserves:production ratio of 10.5 years. Approximately one half of Argentina’s oil and gas reserves are located in Neuquén province, leading the country to name it the national energy capital.

Oil and gas production

Argentina’s oil production hit a peak of 890 000 bpd in 1998, growing at 6.3%/y from 1988 through 1998. However, from 1998 through 2008, output has been on a steady downward trend, according to the data series published by British Petroleum (BP).

Liquefied natural gas

In June 2008, Argentina completed South America’s first LNG regasification plant, located at the port of Bahia Blanca, approximately 400 miles south of the Buenos Aires metropolitan area. In its inaugural year, the country imported 0.33 billion cm³ of LNG from Trinidad and Tobago plus 0.08 billion cm³ from Egypt, a total of 0.41 billion cm³.

Primary energy demand

Primary energy use grew from 26.9 million t of oil equivalent in 1965 to 58.1 million in 1998 and 74.7 million in 2008. The structure of energy demand has changed significantly. Natural gas development and utilisation rose far more quickly than oil use and by 1990 natural gas had caught up with oil. In that year, oil and natural gas both provided for 42% of demand.

Argentina’s refining sector

Evolution of current refinery capacity

Like much of the developed world, Argentina began a major refinery expansion programme in the 1960s, then scaled back plans and let capacity stagnate in the aftermath of the oil price shocks of the 1970s. However, unlike the trend in many other parts of the world, Argentina has never embarked on another significant programme of refinery construction. In 1965, CDU capacity was 402 000 bpd. In 2003, CDU capacity was rated at 609 000 bpd. Since then, capacity has crept back up slightly, and was reported in the Oil and Gas Journal (OGJ) at 626,000 bpd at the beginning of 2009.

Oil quality and trade

Argentina is fortunate to have a variety of crude streams that are high in quality relative to many neighbouring Latin American producers. Argentina’s crude and product exports to the US show an interesting pattern. Argentina’s crude exports to the US peaked in 1998 at 89,000 bpd, consistent with 1998 being Argentina’s peak year of crude production. Crude exports to the US tapered off yet have jumped again in the current calendar year, averaging 73 000 bpd according to the January - May 2009 data published by the US Department of Energy/Energy Information Administration (USDOE/EIA).

Conclusion

The energy sector remains vital to Argentina’s success. Although crude production appears to have peaked, additional liquids output is expected in the form of natural gas liquids and condensates. Natural gas has surpassed oil and become the country’s dominant source of primary energy, and many gas prospective areas remain to be developed. In the refining sector, there are no firm plans to build grassroots refineries, though expansions and upgrades have been undertaken and a few more continue to be considered. Argentina continues to provide leadership in international accords, and no doubt will continue to be a leader in the South American energy sector.

Author: Nancy Yamaguchi, Hydrocarbon Engineering Contributing Editor

To read the full article, please refer to the September issue of Hydrocarbon Engineering magazine.

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/30092009/argentine_energy_markets/