Bolivia’s yearly gas exports to Argentina are expected to end two years before the initial estimate. As Bolivia’s gas reserves deplete across the board, Argentina wants to exploit its fracking gas source in “La Vaca Muerta,” which requires reversing pipelines.
As of today, it is known that Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), the Bolivian government’s oil and gas production company, will stop providing Argentina with gas by mid-2024.
The contract was signed in 2006, and its most recent modification in 2022 established that the Bolivian government would provide 18 million cubic meters of gas daily for the winter months, with a price of 12,18 dollars per million British thermal units, a measure used in natural gas sales. But Bolivian gas reserves have been going down progressively.
The contract lasted because Argentina’s cities depended entirely on foreign gas, and Bolivia benefited financially from selling gas to importers like Argentina and Brazil, whose gas sales to these two countries generated 3.4 billion dollars in 2022, according to the YPFB.
However, given Bolivia’s declining gas production rates since 2014, the contract with Argentina has been set to end in 2024, despite being intended to last until 2026.
Once an energy exporter during the presidency of Evo Morales, who nationalized Bolivia’s resources to finance his social programs, the country has become a net importer. While it may question the strategy implemented by the president from 2006 to 2019, Bolivia now says it is looking to “revert” the declining situation.
Developing “La Vaca Muerta” to reduce gas imports
Meanwhile, Argentina has committed to developing a recently discovered shale gas deposit in the southeastern part of the country called “La Vaca Muerta” (The Dead Cow), a massive non-conventional gas source.
By developing the deposit, involving 31 companies and utilizing hydraulic fracturing to provide gas on a national scale, Argentina plans to reduce its gas imports.
Argentina has developed a plan to adapt from dependency on countries like Bolivia to energetic self-sufficiency.
But the main issue for their adaptation is the pipelines that are already built. They were organized to transport gas from the north, where the gas was sourced from other countries, all through the south meeting all the main Argentinian regions.
Now the direction has to be reversed because the source of gas is in the south and has to travel north, leading to Argentina’s “pipeline reversal” project.
The project will require the building of a new 122 km-long duct, among other specifics, and will cost 710 million dollars. However, the majority of this cost (540 million dollars) will be covered by the Development Bank of South America and The Caribbean (CAF), an international development committee including 21 countries.
Estimates from the Argentinian government say that this project will save 1.96 billion dollars a year. However, this shale deposit depends entirely on hydraulic fracking, a controversial practice due to its wide-reaching environmental consequences.
For Bolivia, the YPFB has also announced plans to increase reserves by investing in exploration and perforating in more areas. According to the president of the YPFB, these aren’t just “plans”, rather they are perforation projects that have already been started. They are currently contemplating 42 different perforations across the country for gas.
