Bolivia ceases gas exports to Argentina: An alteration in energy transport dynamics
This shift in energy dynamics between Bolivia and Argentina is primarily driven by a decline in Bolivian natural gas production and the significant advancements in Argentine production, particularly in the Vaca Muerta field. The evolving relationship between these two countries has led to a new agreement that marks a fundamental change in their energy cooperation.
Production Decline and Advancements in Argentina
Since 2014, Bolivia has faced challenges in meeting its natural gas production commitments, resulting in multiple revisions to the original contract with Energía Argentina S.A. On the other hand, Argentina has made substantial progress towards energy self-sufficiency, driven by successful developments in the Vaca Muerta field and substantial investments in gas transportation infrastructure.
The termination of the contract signifies a shift in the Northern Gas Pipeline’s purpose, now being repurposed to transport gas from Vaca Muerta to northern Argentina and potentially for export to Brazil. With declining gas production in Bolivia and the rising output in Argentina, Bolivian gas is no longer a necessity for Argentina’s energy supply.
A New Agreement and Bolivia’s Perspective
Although the original contract expired on July 31, a temporary extension was granted through a ninth addendum. However, with the completion of the gas pipeline reversal, the agreement will be definitively closed. Bolivia will now charge tolls for allowing the transportation of Argentine gas through its infrastructure, offering to rent its pipelines for the export of Vaca Muerta gas to markets like Brazil.
YPFB’s president, Armin Dorgathen, highlighted the economic benefits of this strategy for Bolivia, emphasizing the efficiency and capacity of Bolivian pipelines that can be further expanded through compression stations. This strategic shift demonstrates how technological advancements and changes in natural resource dynamics can reshape international trade relationships in the energy sector.
