War turns Argentina’s shale boom dream into gas-buying nightmare

Bloomberg

Argentina, home to some of the world’s vastest gas reserves, is bracing for the unthinkable: rationing one of its chief natural resources.
Despite having shale-gas deposits to rival those in Appalachia, which made the US a major exporter, Argentina’s domestic gas production sector has suffered from years of underinvestment that has left it unable to meet domestic demand, never mind the needs of the export market.
As a result, Argentina is competing for shipments of liquefied natural gas, or LNG, along with industrial powerhouses like the UK and Japan. Its timing could scarcely be worse, as prices have skyrocketed. The fallout from Vladimir Putin’s invasion of Ukraine has plunged energy and commodity markets into chaos, worsening the shortages, supply-chain bottlenecks and wild price swings that have roiled the world economy since the pandemic emerged.
Furthermore, Argentina is only just starting to ask traders for cargoes for May and June, when winter in the southern hemisphere sets in. With the spike in prices over the last few weeks, the country — which has perennial shortages of hard currency used to pay for imports — may not be able to afford all the LNG it needs.
“Argentina was planning to import 60 to 65 LNG shiploads, but these prices force it to adjust that original strategy,” Marcos Bulgheroni, chief executive officer of Pan American Energy, one of the country’s biggest gas drillers, said at an oil conference last week in Buenos Aires.
To many observers, including people in the
government and the gas-processing industry who asked not to be named because the matter is politically sensitive, the specter of fewer-than-needed LNG cargoes puts the country on the cusp of having to limit energy supplies to industrial consumers.