Source: Argentine Congress to Take Up LNG Law in March After Delay
(Reuters) — A law aimed at boosting Argentina's LNG industry, with an eye toward future exports, will be taken up in March after a delay blamed on disputes over legislative fine print, a energy ministry source told Reuters on Tuesday.
The proposed legislation, which had been expected to be debated by lawmakers in January or February, aims to encourage construction of LNG plants and related pipeline infrastructure, according to the source.
While Argentina sits on one of the world's largest shale gas reserves, the cash-strapped country struggling with a prolonged economic slump is forced to import much of what it uses to generate electricity. Its energy deficit last year was estimated at some $5 billion.
At the same time, global demand for LNG is surging, largely due to Russia's invasion of Ukraine, which provoked much of Western Europe to scramble for non-Russian natural gas supplies and pushed prices higher.
The LNG legislation will now be taken up during the next regular congressional session beginning in March, after it was previously scheduled for an earlier special session.
The source said the delay was caused by unspecified changes to the draft, adding that the bill will offer tax breaks for LNG projects that commit to minimum investment levels as well as annual output targets.
The legislation will also provide would-be investors with a government commitment to keep taxes stable in addition to possibly offering a 30-year export authorization, in a bid to drive down the political risk of future projects.
Expensive new gas liquefaction plants in particular would allow Argentina to better harness the shale gas riches it holds at its huge but underdeveloped Vaca Muerta deposit, the world's second largest such reserve, while selling its expected surplus via LNG exports.
The development of a LNG joint venture between state-run oil company YPF and Malaysia's national firm Petronas depends on the legislation's approval. That project would build a major liquefaction plant plus a Vaca Muerta pipeline to transport the fuel, powered by an initial investment of about $10 billion.
U.S.-based Excelerate Energy seeks to build another Vaca Muerta liquefaction plant by 2025 along with local firm Transportadora de Gas del Sur (TGS), if the new legal framework is approved.
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