Argentina Has Stopped Needing Winter LNG Cargoes. Becoming an LNG Exporter Is a Harder, Slower Step

Argentina's oil and gas production is close to the highest levels in its history. In September 2024 the country produced 738,000 barrels a day of crude, 15 per cent more than a year earlier and the most in any month since 2003. Gas output averaged 5.0 billion cubic feet a day in the first nine months of 2024, up 5.2 per cent on the same period of 2023, and reached 5.4 Bcf/d in August, the highest monthly figure in 21 years.

Between January 2021 and September 2024, crude production rose 50 per cent and gas production 27 per cent. Vaca Muerta, mainly in Neuquén province, supplied 58 per cent of Argentina's crude and 74 per cent of its gas in September 2024. The first, from gas importer to self-sufficient producer in winter, is largely complete. Demand for heating and power peaks in the southern hemisphere winter, from June to August, while storage capacity is limited. The EIA notes that rising production and several new pipeline projects have reduced LNG imports.

Each LNG cargo not imported saves foreign currency for an economy that has persistently struggled with dollar shortages. Argentina's crude exports grew by an average of 33 per cent a year, from 30,000 barrels a day in 2017 to 128,000 barrels a day in 2023, and shale crude made up about 70 per cent of exports in 2023. Crude can be shipped from existing ports with modest additional infrastructure, and buyers in the United States, Brazil, Chile and elsewhere are already taking Argentine barrels.

Argentina sits a long way outside the usual conversation about non-OPEC supply. The first concrete step came in July 2024, when Golar LNG signed definitive agreements with Pan American Energy for a 20-year deployment of a floating liquefaction vessel in Argentina. Separately, YPF has pursued a much larger onshore LNG project with international partners, though its scope and timing have shifted. LNG exports at scale are a matter for the late 2020s at the earliest.