Argentina’s government has launched a natural gas tender to try to shore up domestic supply starting in the Southern Hemisphere winter in 2022.

The majority of the gas would come from the Neuquén Basin, home to the massive Vaca Muerta formation.

Energy Secretary Darío Martínez said the objective of the tender — part of the Plan Gas 4 scheme launched last year — was to ensure as much domestic gas as possible when heating demand peaks. Argentina is coming off a crushing winter of record demand for gas imports, which also coincided with soaring global prices for liquefied natural gas (LNG).

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According to a resolution published in the Official Gazette, the third tender of the Plan Gas 4 scheme seeks to secure 5.5 million cubic meters/day (MMm3/d) of gas, of which 3 MMm3/d would come from Neuquén.

The maximum price of the tender is the same as in Round 1 and 2, or $3.575/MMBtu for Neuquén and $3.428 for the Austral Basin. The volumes produced would need to reach the market starting in May.

Bids are due Nov. 2, with the winning offers to be announced on Nov. 10. 

Output from Vaca Muerta has started to boom. Natural gas output in Vaca Muerta grew sequentially every month from May through August and hit an all-time high of almost 1.6 Bcf/d in August. That compares to 890-920 MMcf/d during the six-month period from November 2020 to April.

In a bid to increase natural gas supplies, Argentina’s government also recently presented a 20-year hydrocarbon promotion bill to Congress.

The news comes as record amounts of LNG pours into the region. Neighboring Brazil is suffering from a historic drought and is importing LNG to keep the lights on. In an unprecedented move, Argentina in late September agreed to re-export LNG it imports and pipe additional gas to Brazil. There has also been renewed talk of the construction of a natural gas pipeline from Vaca Muerta to southern Brazil.