Pan American Energy CEO claims Argentina needs to build more LNG capacity to accelerate the development of its largest shale play Vaca Muerta, located in Neuquén Basin.
Reuters reports that, due to tendencies for bigger profitability caused by the coronavirus pandemic, many producers switch from gas to oil production.
This also happened in the world’s fourth-largest shale oil reserve Vaca Muerta, where a portion of production has recently switched to oil, boosting output to 124,000 barrels per day (bpd) in December after having stalled during the year.
PAE is a prominent player in Vaca Muerta with 4 million cubic meters per day of gas production in 2019. Vaca Muerta was first discovered in 1931 with its first exports of oil and LNG rolling out between 2019 and 2020.
The formation’s potential is so big that future development, after some $20 billion in investment in the last decade, can only be secured by exporting gas to neighbors and LNG to Asia, where demand is firm, explained PAE CEO Marcos Bulgheroni speaking at a conference, as reported by Reuters.
It is required to figure out how to best fulfill this potential by connecting the local market first with the regional market, but also with the international gas market. That would mean that Argentina plans and builds more gas liquefaction trains in order to export LNG cargoes.
After all the investments in the last decade, Bulgheroni feels now is the time to accelerate its potential. He also said that companies participating in the giant shale play are ready to accelerate investment, but there needs to be a secured stable regulatory framework and access to financing and hard currency.