Argentina attempts to wean itself off LNG

In May, Argentine Energy Minister Juan José Aranguren announced that Argentina should be able to stop importing LNG in 5-6 years. The government is trying to make sure this happens by reducing the country’s reliance on energy imports as one of the key pillars of President Mauricio Macri’s economic policy. This will make the trading landscape even more challenging for LNG exporters such as the United States and Australia.

Argentina is following the lead of its neighbour Brazil in attempting to replace LNG with domestic gas. While Brazil is displacing LNG with its pre-salt acreage, Argentina is relying on shale and tight gas production from plays such as Vaca Muerta to do the job. Buenos Aires is also reinforcing its shift in policy by slashing gas and electricity subsidies, which is already affecting the country’s LNG imports.