A Petrobras (PETR4) will give in to Argentina a portion of your share of natural gas purchased from Bolivia from July. The measure is part of an agreement reached with the company Argentine Energy (Enarsa) and provides for the allocation of up to 5 million cubic meters per day.
The transferred gas will be used to guarantee the supply of thermal power plantsresidential and industrial demands in the province of Salta and other locations in the northern region of Argentina.
The assignment will take place during the months of winter, while the neighboring country awaits the completion of the northern gas pipeline, recently tendered. After completion of the works, the northern region of Argentina will be served with gas coming from reserves in the Vaca Muerta fields.
Details of the agreement between Petrobras (PETR4) and Enarsa
The transfer of gas is part of a memorandum of understanding signed on April 18 between Petrobras and Enarsa. The preliminary contract is non-binding and indicates the companies’ alignment to begin a partnership.
The agreement has a term of up to three years and is aimed at studying collaborations in the natural gas segment. The project will enable the exchange of information, the evaluation of alternatives for cooperation and energy complementarity between the two companies.
In addition, it also promotes the coordination of actions to better guarantee the supply of natural gas to Argentina during the winter, a period of greatest demand in the country.
According to Petrobras, there will be no impact on gas supply in Brazil nor additional financial costs for the company.
A helping hand from Petrobras
It is worth highlighting that the Energía Argentina Sociedad Anónima (Enarsa) is a state-owned company created in 2004 and controlled by the Energy Secretariat of the Argentine Ministry of Infrastructure. The company is mainly focused on exploring the Petroleum, natural gas and also the electricity.
Currently, the company is working on one of the most important projects in the government of Javier Milei: the construction of the Néstor Kirchner gas pipeline.
Coordinated by Enarsathe initiative will expand gas transportation capacity to commercial centers and, thus, reduce Argentina’s dependence on import of liquefied natural gas (LNG).
The issue of importing fuels has been causing headaches for the Milei’s government. In March this year, the Central Bank of Argentina (BCRA) didn’t have dollars to pay for the delivery of LNG and announced that payment would be made via letter of credit.
In October 2023, the lack of dollars for the import of gas generated a supply crisis in the country.
The partnership between Enarsa It is Petrobras is another front to avoid the problem. With the agreement, the expectation, now confirmed, was that the Brazilian company would release part of the volumes of Bolivian LNG, for which it has import priority, to Argentina amid the drop in production in Bolivia.
In return, the state-owned Enarsa must pay for the import of liquefied natural gas (LNG) shipments that are unloaded at one of the regasification terminals in the Brazil.
Milei’s project: Enarsa in the sights of the Argentine president
Currently, the Enarsa is led by lawyer Juan Carlos Doncel Jones, who has a long history in the energy sector. The new president of the company also participated in the privatization process that took place in Argentina during 1998.
Doncel Jones’ performance is in line with plans for Javier Mileiwhich announced that the state-owned Enarsa was part of the package of measures Ley Ómnibus, blocked by Congress in April. A reissue of the project, Ley de Bases, also includes the company
The president’s project Milei It is one of the government’s promises and has been facing obstacles in the Argentine Congress. The measures seek to centralize power in the Executive, change the distribution of taxes and change rules for debt and privatizations.
A Enarsa is among the companies that the package seeks to privatize with the approval of the change in the rules of the privatization process.
*With information from Estadão Conteúdo, La Nación, Le Monde Diplomatique Brasil, La Política Online and Ámbito Financiero
