Argentina's state oil company, YPF, is set to begin shipping crude oil to Chile this year via the Transandino pipeline from Vaca Muerta.
The announcement came following the presentation of the oil company's first quarter results, which registered a net profit increase of 28% compared to the previous year.
Earlier this week, an agreement was signed between Argentinian oil companies and the Chilean state-owned ENAP, to purchase 41,000 barrels of oil per day for a duration of 45 days.
The Transandino pipeline, co-owned by YPF, ENAP, and Chevron Corp, is expected to pump approximately 70,000 barrels a day by the end of the year. The aim is to continue this growth into 2024, reaching its full capacity of 110,000 barrels a day, a YPF executive told Reuters.
Meanwhile, the Vaca Muerta pipeline is projected to be operational by September or October of this year, having already made 60% progress.
The expansion of YPF's Oldelval gas pipeline, also leading to the Atlantic, is slated for completion in the third quarter, he added.
With these initiatives, the Argentine oil company anticipates an increase in its exports while maintaining stable prices.
YPF is spearheading the development of Vaca Muerta, a formation the size of Belgium located in the Patagonian province of Neuquén. Analysts believe that this could help the country eliminate its multi-billion-dollar energy deficit and become a net energy exporter in the next few years, as cited by Reuters.
As the area is currently under a maintenance program for new pipelines, it is predicted that oil imports into the country will increase in the coming months."
About the energy context of Argentinian
An analysis published in 2017 by the EIA, explained that in 2016, Argentina was South America's leading dry gas producer and fourth-largest petroleum producer.
Natural gas was used extensively in electricity, industry, and residential sectors, making up 52% of total primary energy consumption, with oil (used primarily in transportation) making up 36%.
Policies limiting industry attractiveness to private investors led to energy supply-demand imbalance, turning Argentina into a net hydrocarbons importer.
Reforms in 2014 offered investors offshore exploration opportunities and promoted foreign ventures in unconventional plays.
Argentina’s Vaca Muerta formation, comprising about 60% of the country's 27 billion barrels of recoverable shale oil reserves, is expected to increase unconventional oil production due to recent investment incentives.
In 2016, Argentina had 11 refineries and imported approximately 90,000 b/d of total oil products, about half from the US. In the same year, Argentina had proved natural gas reserves of approximately 11.1 trillion cubic feet.
To meet increasing domestic electricity demand, Argentina imported 9.5 BkWh in 2016 through electrical transmission interconnections with Brazil, Chile, Paraguay, and Uruguay.
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