Insight
Argentina launches Gas Scheme 2020-2024: What will drive price bids?
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
The Argentine government finally launched the Gas Scheme 2020-2040, which will be a tender to contract up to 70 Mcmd and incremental volumes in winter for four years starting deliveries in January 2021. This tender aims to provide foreseeability of contracting, payments and pricing, and through this revive investments in gas production to reduce gas, diesel and LNG imports. Despite the price cap imposed, this tender is a market pricing mechanism much better than historical arbitrary price settings by the Argentine government or price subsidies to producers. It also will be the biggest contracting deal in Latin America summing 117 bcm in the next for years, which would represent up to 16.6 US$ billion dollars of gas sales.
Table of contents
- Executive summary
- Introduction
- Features of the Gas Scheme tender
- Price bid mechanism
- Dealing with legacy price subsidies
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Pricing strategies
- Internal rate of return drivers
- Marginal cost of supply
- Final remarks
Tables and charts
This report includes the following images and tables:
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Volumes required in Gas Scheme 2020-2024 by basin and type vs total Argentina gas demandUncontracted committed production capacity versus Argentina’s remaining gas demand from the Gas Scheme 2020-2024Commercial details of the Gas Scheme 2020-2024
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Net present value divided by the gas sales at a 10% interest rate must be lower than US$3.21/mmbtuMaximum price calculated based on 3 Mcmd of injected volume from Neuquen to GBANominal and adjusted annual revenue for the maximum price with 3 McmdPrice comparison between local and international references and price cap from Gas Scheme 2020-2024Bullish and Bearish factors for price bidsNeuquen compositve supply cost curve (2024) vs gas demand requirements
What's included
This report contains:
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