Argentina Oil & Gas Midstream Market - Segmented by Geography - Growth, Trends, and Forecast (2018 - 2023)
The development of the hydrocarbons industry in Argentina, mirrors the country’s political and economic volatility throughout its history. The oil & gas industries are not immune to the traditional swings of the political-economic pendulum, in Argentina, viz. periods of investor-friendly policies followed by phases of government controls and market and price restrictions. In the context of rising global prices and uncertainty about the change in the US administration, Argentina is undergoing a complex transition and restructuring process, involving some major variables in the sector, to reverse the energy deficit.
As far as Argentina’s midstream sector is concerned, the country has a well-developed road, rail, and water transport infrastructure; the most extensive one in South America. Similarly, Argentina has one of the most extensive oil & gas distribution networks in Latin America, in distribution. The country’s pipeline network comprises of 6,248 km of oil pipelines, 3,631 km of refined product pipelines, and 29,930 km of gas pipelines (the predominant gas pipelines include – Neuba I, Neuba II, and San Martin), which connect producing provinces in the Neuquén, San Jorge, and Austral basins, with Buenos Aires and other demand centers.
Argentina has five major gas pipelines Yabog, Centro Oeste pipeline, GasAndes Pipeline, Neuba 1 and 2, and Paraná-Uruguayana pipeline, and one oil pipeline Trans Andean Oil Pipeline. The Trans Andean Oil Pipeline was completed in 1992, and it traverses through the rugged Southern Andes. The 16-inch pipeline transports 107,000 barrels of oil per day from the Neuquen basin, Argentina’s largest oil field, to Chile’s port of Concepcion, where it is refined or exported.
Requirement for Pipeline Expansion – Creating Opportunities for Midstream Companies
Argentina’s natural gas consumption was 49.6 billion cubic meters in 2016. This records an increase of 1.4 billion cubic meters from the previous 48.2 billion cubic meters in 2015. However, well infrastructure, transportation, and logistics are three issues that pose distinct challenges in Argentina, but they also present several opportunities. Argentina built the first gas pipeline in Latin America in the 1940s, connecting Comodoro Rivadavia to Buenos Aires. While a network of pipelines now crisscrosses the country, such as the pipelines connecting Compañia Mega’s gas separation plant in Neuquén, with its fraction facilities in Bahia Blanca. The existing capacity needs to be supplemented in order to facilitate growth in oil & gas demand. Moreover, considering more than 50% of Argentina’s energy matrix relies on natural gas, the country’s pipelines have predominantly been used for supplying the domestic market. Hence, with increasing population and rising consumption of energy, Argentina has a serious requirement for pipeline expansion.
Key Developments in the Market