O Brazil is moving forward with plans to import natural gas Argentine de Vaca Muerta, in a sign that bilateral trade agreements can overcome a complicated political relationship.
The Brazilian Ministry of Mines and Energy signed a memorandum of understanding with Argentina this Monday (18) to identify the infrastructure necessary to increase the supply of natural gas.
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The countries expect imported volumes to reach 30 million cubic meters per day by 2030, and are part of a broader plan to use the fuel to accelerate industrial growth, according to the ministry.
The agreement shows how business between Brazil and Argentina can move forward even when the Argentine president Javier Miley challenges the efforts of his Brazilian peer Luiz Inácio Lula da Silva to be a protagonist on the global stage.
The two leaders have been locked in a public battle since last year, when Lula sent a team of campaign advisors to work for Milei’s electoral opponent and the Argentine included his neighbor in a group of “communists” he would not work with. .
The agreement
The memorandum of understanding creates a bilateral working group to identify the measures necessary to make the supply of Argentine natural gas to Brazil economically viable. Argentina also needs to secure a market for its vast gas reserves to accelerate production growth.
The gas deal should allow Brazil to buy 2 million cubic meters per day of gas early next year from the Argentine provinces of Neuquén and Rio Negro, and reach 10 million cubic meters in the next three years. Brazil estimates that gas from Vaca Muerta could cost about half the current average price of US$14 per BTU.
Initially, a pipeline passing through Bolivia would be used to transport the gas, but transportation costs, which are a key issue, still need to be resolved, according to the ministry. Bolivia used to supply gas to plants in both Brazil and Argentina until its production declined.
Other transportation infrastructure options to expand the flow of Argentine gas to Brazil could include new gas pipelines that could pass through Argentina or even Paraguay, and shipments of liquefied natural gas from Argentine terminals to terminals on the Brazilian coast, the official said. Argentina’s Energy Ministry did not immediately respond to a request for comment.
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