By Eliana Raszewski

BUENOS AIRES – Argentina’s energy crisis is causing it to seek $10 billion in private capital to jumpstart exports of liquefied natural gas (LNG) between 2027 and 2027. Economy minister Martin Guzman stated Wednesday.

Argentina has the Vaca Muerta formation which is second in size for shale gas reserves. But, lagging domestic production as well as limited pipeline capacity mean that Argentina remains a large LNG importer to meet winter demand.

Guzman stated to energy executives that Argentina could export $15 billion to LNG by 2027. It needs liquefaction facilities to transform its natural gas to LNG. The ambitious target is a result of the nation’s increased production and construction of a large new gas pipeline.

In a presentation, he stated: “We are working together with a number of countries and businesses to ensure that Argentina produces LNG production capacity, there will be demand.”

Due to sanctions against Russia and the conflict in Ukraine, global LNG prices have shot up this year. Analysts have put Argentina at risk of running into a $5 billion energy shortfall.

But Argentina will need to appeal to investors that are concerned about the government’s intervention on the market, the lack of regulation, tight currency exchange control, and high levels of inflation.

Guzman indicated that Guzman was determined to increase sector certainty and make foreign currency easier access.

He said, “It’s necessary to facilitate foreign direct investment flows into the sector in Argentina.”

Refinitiv’s senior LNG analyst Olumide Ajayi said Argentina could reduce its import bills by increasing production in Vaca Muerta. However, LNG prices and supply dynamics might be more difficult in 2027 due to tighter market conditions.

He said, “In the medium term, if they can increase Vaca Muerta investment and encourage investment in upstream, they could start to accelerate LNG exports.”

It could also be too late as there have been other approved projects in order to meet market demand.