Brazil and Argentina Forge Agreement on Vaca Muerta Gas Exports

On November 18, 2024, Brazil and Argentina signed an agreement to study the export of natural gas from Argentina’s Vaca Muerta formation. A working group will assess the viability of gas supply routes to Brazil, potentially increasing imports to 30 million m3/d by 2030. This initiative is crucial for addressing Brazil’s growing gas demand amid its current production constraints.

On November 18, 2024, Brazil and Argentina formalized an agreement to conduct studies aimed at establishing infrastructure for the export of natural gas from Argentina to Brazil. This initiative, driven by Brazil’s Ministry of Mines and Energy, indicates a future potential for gas imports from Argentina, specifically targeting capacities that could reach as high as 30 million cubic meters per day (m3/d) by the year 2030. The collaboration underscores the importance of Argentina’s Vaca Muerta formation, recognized as the world’s second-largest shale gas reserve. A working group will be established to determine the necessary steps for facilitating the gas supply from Argentina to Brazil, with a keen focus on Vaca Muerta. The exploration of various transportation routes for the gas is also a priority. Brazilian Mines and Energy Minister Alexandre Silveira indicated an initial import potential of 3 million m3/d, emphasizing the strategic necessity to meet Brazil’s increasing domestic gas demands. Possible transit pathways include the reversal of Bolivia’s pipeline, routes through Paraguay and Uruguay, as well as a prospective direct link at Uruguaiana, situated at the border between the two nations. Such developments are crucial for Brazil, which, despite being the largest crude oil producer in Latin America, faces challenges in gas supply.

The agreement between Brazil and Argentina emerges from Brazil’s urgent need to accommodate its rising domestic gas demand, as its current production levels do not suffice. Vaca Muerta stands out as a key resource, given its significant reserves of both shale gas and shale oil. The collaboration is not merely an energy agreement but reflects broader geopolitical and economic relationships between the two countries, emphasizing their positions within the South American energy landscape. The involvement of Argentina’s state oil firm, YPF, highlights the ongoing efforts to enhance energy exports from Argentina and reduce regional dependencies.

In conclusion, the agreement between Brazil and Argentina to explore potential natural gas exports from the Vaca Muerta formation represents a significant step towards enhancing energy collaboration in South America. This initiative illustrates Brazil’s strategic prioritization of energy supply solutions, aiming for substantial gas imports by 2030. The creation of a working group to analyze transportation routes will provide clarity on the practicalities of this ambitious plan, promising to reshape energy dynamics within the region.

Original Source: www.worldpipelines.com