Argentina has launched a tender to secure natural gas supplies for the upcoming winter in the Southern Hemisphere.

Part of the “Plan Gas 4,” the aim of the tender is to “save on as much imported fuel as possible,” the Energy Secretariat said in a statement.

The new tender aims to lock in natural gas volumes for the upcoming May-September period and are in addition to those granted in the first tender held in December. That tender was for gas from the Neuquén and Austral basins, for each of the winter periods from 2021 to 2024. 

The tender calls for peak gas supply of 17.59 million cubic meters/day (MMm3/d), or 621 MMcf/d in July from Neuquén. The tender is also open for producers in the Austral Basin.

Variable volumes of gas may be offered from June to September, but not for May, according to the rules. 

The maximum price of the tender is the same as in Round 1, or $3.575/MMBtu for Neuquén and $3.428/MMBtu for the Austral Basin.

Bidding is open until next Tuesday (March 2), with contracts awarded on March 10. 

“This second round basically aims to obtain the largest possible volume of Argentine gas for the winter peak to save on as much imported gas as possible, simultaneously generating savings in foreign exchange and a reduction in fiscal costs,” said Energy Secretary Daniel Martínez. 

Despite being home to Vaca Muerta in Neuquén, one of the largest unconventional natural gas deposits in the world, production has not been able to keep up with demand in recent years and in particular in winter months.

Moreover, Vaca Muerta natural gas production, which showed monthly declines through most of 2020, has yet to recover to pre-pandemic levels. Production fell below 900 MMcf/d in December for the first time since October 2018.

In a bid to stimulate natural gas production, in December the national government handed out 23 contracts as part of “Plan Gas 4.” Winning companies included state oil firm YPF SA, Tecpetrol SA and Pampa Energia SA. 

Before each winter period, a new tender is planned to ensure coverage of peak demand, which is also bolstered annually with imports from Bolivia and liquefied natural gas shipments.

Argentina’s latest supply agreement with Bolivia is 30% below traditional volumes due to decreasing production in Bolivia, the Energy Secretariat said. 

This month the country also announced a tender for a second floating regasification (FSRU) unit at Bahia Blanca in Buenos Aires province, to add to the recently reinstated FSRU at Escobar.