Bolivia Gas Deal to Save $769 Million, Replace LNG Imports

BUENOS AIRES (Reuters) — Argentina's new deal with Bolivia to up natural gas imports will bring savings of $769 million in foreign-exchange reserves and replace 14 vessels of increasingly expensive LNG, Energy Secretary Dario Martinez said on Friday.

Argentine President Alberto Fernandez and his Bolivian counterpart Luis Arce on Thursday reached a deal for Bolivia to export 14 million cubic meters of natural gas per day to Argentina, a boost but not as high as hoped. 

Bolivia will also give priority to Argentina for further supply if it is able to increase its production.

Martinez said Argentina agreed to pay Bolivia an average $12.18 per million British thermal units of natural gas, adding that international LNG prices were more than three times that and diesel prices were over twice as high.

"It is good news for the country, for Argentineans in general, for the central bank's foreign-exchange reserves and for the government's fiscal plan," Martinez said in a statement.

"Considering the average price we got, the additional volume (from Bolivia) will allow us to save about $769 million, and also replace 14 LNG ships," he added.

Fernando Meiter, an analyst at Gas Energy Latin America, told local radio station Mitre on Friday that the deal was not enough to solve Argentina's natural gas deficit, as demand is seen at 120 million cubic meters per day.

According to his calculation, the country would need to import about 70 LNG vessels in 2022. LNG prices hit record highs after Russia's invasion of Ukraine.

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