The proposed legislation, which had been expected to be debated by lawmakers in January or February, aims to encourage construction of LNG plants and related pipeline infrastructure, according to the source. While Argentina sits on one of the world's largest shale gas reserves, the cash-strapped country struggling with a prolonged economic slump is forced to import much of what it uses to generate electricity. Its energy deficit last year was estimated at some $5 billion.
At the same time, global demand for LNG is surging, largely
due to Russia's invasion of Ukraine, which provoked much of
Western Europe to scramble for non-Russian natural gas supplies
and pushed prices higher.
The LNG legislation will now be taken up during the next
regular congressional session beginning in March, after it was
previously scheduled for an earlier special session.
The source said the delay was caused by unspecified changes
to the draft, adding that the bill will offer tax breaks for LNG
projects that commit to minimum investment levels as well as
annual output targets.
The legislation will also provide would-be investors with a
government commitment to keep taxes stable in addition to
possibly offering a 30-year export authorization, in a bid to
drive down the political risk of future projects.
Expensive new gas liquefaction plants in particular would
allow Argentina to better harness the shale gas riches it holds
at its huge but underdeveloped Vaca Muerta deposit, the world's
second largest such reserve, while selling its expected surplus
via LNG exports.
The development of a LNG joint venture between state-run oil
company YPF and Malaysia's national firm Petronas depends on the
legislation's approval. That project would build a major
liquefaction plant plus a Vaca Muerta pipeline to transport the
fuel, powered by an initial investment of about $10 billion.
U.S.-based Excelerate Energy seeks to build another Vaca
Muerta liquefaction plant by 2025 along with local firm
Transportadora de Gas del Sur (TGS), if the new legal framework
is approved.
(Reporting by Eliana Raszewski
Editing by Bill Berkrot)
