Argentina’s YPF has reached a preliminary agreement with Excelerate Energy to charter an LNG carriers to export gas from a floating LNG production unit.
A final agreement is to be signed in “the next few days” so the gas carrier can start operations in early September until the end of the contract in May 2020, YPF said in a statement.
The vessel is to load LNG from Vaca Muerta, a huge southwestern shale play, from the Tango FLNG which has been chartered from Exmar.
TradeWinds reported earlier this month that YPF was looking for a vessel with a capacity of around 138,000-cbm
Marcos Browne, YPF executive vice president of gas and energy, said the deal will allow YPF to “export surpluses in months of low local consumption”.
Gabriela Aguilar, general manager of Excelerate Energy in Argentina, added that “it is a milestone for us to collaborate with YPF in this activity, contributing all our know-how in the transport of Argentine gas to the world”.
Tango FLNG exported its first cargo in early June when the Cheniere Energy-chartered 147,895-cbm Fuji LNG (built 2004) sailed on 6 June with 25,000-cbm of LNG produced by the floater loaded into a single tank.
Chinese-built Tango FLNG became the world’s third FLNG unit to be put into operation, pipping Shell’s 3.6-mtpa Prelude FLNG to the post by days.
YPF has said that it plans to export an average of 2.5 million cu m/d of LNG from the floating terminal, which along with plans to increase sales to Brazil, Chile and Uruguay will help it to sustain gas production growth in Vaca Muerta.
Argentina is emerging as a potential major supplier of LNG to Asia during peak demand periods, according to a recent report by Wood Mackenzie.
It is anticipated that LNG production volumes could potentially reach 6m tonnes per annum (mtpa) in 2024, potentially growing to 10 mmtpa by 2030.
In addition, Argentinian LNG liquefaction plants are said to have lower shipping costs to reach Asian markets than US Gulf Coast facilities, avoiding potential Panama Canal congestions and presenting an overall cheaper alternative to US exports.
