Argentina publishes Plan Gas extension process, auction rules

Argentina has published bidding rules and approved contract models for the next phase of 2020-24 hydrocarbons production incentives program Plan Gas, being extended to 2028.

Officials had published a decree earlier in the month greenlighting the extension process. 

Under Plan Gas – launched in 2020 and designed to help spur investment and cover demand – producers bid for contracts to supply offtakers.

The first round was held to secure base volume of 70Mm3/d (million cubic meters per day) for 365 days a year. Subsequent rounds were held to secure additional gas, including over the colder months, when demand spikes.

In the latest phase, production commitments made under round No. 1 and round No. 3 are extended and officials also seek to secure more.

The government wants to secure gas to fill the first phase of the under-construction, publicly funded Vaca Muerta gas pipeline, which will have capacity of around 11Mm3/d, rising to about 22Mm3/d once compression plants are installed, which could happen by end-2023. Argentina wants to wean itself off imported gas – which strains the country’s finances – and boost exports. Authorities are planning a second phase of the megaproject, which would likely require private sector funds.

A resolution published in the official gazette cites the need to incentivize production across the board, referring to a downward trend in production at all basins apart from Neuquén.

In the resolution, the federal energy department outlines additional volume sought in the fast-growing Neuquén basin. 

NEUQUÉN BASIN

Plan Gas July – up to 11Mm3/d, from July 1, 2023, to December 31, 2028

Plan Gas January – up to 3Mm3/d, from January 1, 2024, to December 31, 2028

Plan Gas Peak 2024 – up to 7Mm3/d, for May-September each year of 2024-28

Plan Gas Peak 2025 – up to 7Mm3/d, for May-September each year of 2025-28

AUSTRAL AND NOROESTE BASINS

A call is also issued for production projects in the Austral and Noroeste basins. State energy company Energía Argentina can sign associated offtake contracts.

Beyond investment magnet Neuquén basin, the biggest project, due to start production in early 2025, is the 10Mm3/d CMA-1 consortium’s Fénix gas project, planned for the Austral basin, offshore Tierra del Fuego province. 

The resolution, meanwhile, also outlines focus areas for a public-private working group, including identification of goods and services deemed strategic for each basin.

The earlier decree greenlighting the process also outlined rules for Plan Gas producers that also wish to tap the market, typically more lucrative in terms of price obtained. 

Access the resolution and the 11 associated addenda here.