Southern Cone Natural Gas Dynamics - INSTITUTE OF THE … · 2019. 12. 6. · SOUTHERN CONE NATURAL...

Southern Cone Natural Gas

Dynamics

December, 2019

Alvaro Rios [email protected]

mailto:[email protected]

2

Content

• Brief institutional presentation of GELA

• The reality and dynamics of the natural gas

markets in the Southern Cone

• Final comments

CONTENT

3

Offices - GELA

THE COMPANY

GAS ENERGY LATIN AMERICA (GELA)is an energy consulting company

(natural gas, oil, LPG, power,

renewables and petrochemical)

operating throughout Latin America

and the Caribbean since 2008.

Technical Offices:

Bolivia, Peru and Venezuela: Servicing

Argentina, Brazil, Chile, Colombia,

Ecuador, Mexico, Uruguay and other

countries in Latin America and the

Caribbean.

Senior Partners

In each country.

Specialized Senior Consultants:

All energy sectors.

Oficinas

Oficinas Principales y Técnicas

Headquarters – Technical team

Montevideo

Santa Cruz de la Sierra

Lima

Buenos Aires

Caracas

Quito

Bogota

Santiago

Mexico DF

San Pablo

Central America & The Caribbean

Permanent Offices

Associated Office

4

GELA's types of Clients

CLIENT TYPES

EnergyE&P Companies

Transport and Distributors

Institutions & Associations

Industry & Services

Financial Institutions

5

Content




• Final comments

CONTENT

6

Integrated market (Brazil, Uruguay, Argentina, Bolivia

and Chile)

Source: Elaboration by GELA, 2019

Gas on gas competition

SOUTHERN CONE NATURAL GAS DYNAMICS

LNG Regasification

LNG Liquefaction

Vaca Muerta (Argentina)

Pre salt (Brazil)

Subandean (Bolivia)

LEGEND

LNG

LNG

Pr

7

Evolution of LNG price indicators

1) Long-term LNG contracts of USA. FOB Price, the formula is 1,15% HH + 1,1 USD / MMBTU

Source: Global Gas and LNG Outlook, July 2019


8

LNG prices dynamics according to seasonality

Winter higher demand and higher prices of LNG and vice versaSource: IRI, 2019

WINTERSUMMER


9

Brazil - Natural gas demand evolution

Source: Mines and Energy Ministry; ABEGAS, August 2019

NOTE: Only data available until August 2019


Demand falls: slower growth in the economy

16%

33%

51%

August

2019:

Demand falls (2017-2019): 17%

Electric generationIndustrial Others (Automotive, residential, commercial, co-generation, CNG)

MM

cm

d

10

Brazil – Natural gas supply evolution

* Gross National Supply.

** Gross and net supply difference

NOTA: Reinjection (Gross National Supply) for liquid recovery and transport consumption on imports


MM

cm

d

National-Offshore National-Onshore

Argentina’s import LNG’s import

Bolivia’s import

Net national supply

**

Source: Mines and Energy Ministry; ABEGAS, August 2019

11

Brazil – LNG new projects

Source: EPE, 2019.

FSRU terminals (In construction and under study)

# Name LocationCapacity

(MMmcd)Operation

date

1 Sergipe (In construction) Sergipe 14 2020

2 Açu (In construction)Norte Río de

Janeiro21 2021

3 Comgás (under study) Sao Paulo 14 2020

4Sao Francisco del Sur (under

study)Santa

Catarina15 2021

August, 27th, 2019


12

Pre salt supply – Actual and new projected tiers

Source: MINEM, 2019.

Conditioning and Collection

Facilities (Offshore)

Route 1: 10 MMcmd (Built)

Route 2: 16 MMcmd (Built)

Route 3: 18 MMcmd

(Construction 2021)

Routes under study(Investment. 1500 MM$US)

Route 4: 10 a 15 MMcmd ~275 Km




13

Argentina – Natural gas demand evolution

Source: Energy Secretary; Enargas, 2019NOTE: Only data available until July 2019

July

2019:July

2018:

29%

33%

19%

19%

36%

19%

18%

26%


MM

cm

d

Others (Commercial, vehicular, export) Industrial EG Residential

14

Argentina – Natural gas supply

** Gross and net supply difference

NOTA: Only data available until July 2019

* Gross National Supply


Source: Energy Secretary; Enargas, 2019

**

Winter Winter Winter Winter

National

supplyBolivia’s import Chile’s import LNG’s import Net national supply

15

Argentina – Unconventional production

Source: : GELA based in the analysis of the Energy Secretary, 2019.

MM

mcd

As of July, unconventional reservoirs represent 44% of the total gas supply.


MM

cm

d

16

Argentina – Vaca Muerta – Companies and investment

announcements

Vaca Muerta’s Surface by company

Sourc

e:

MIN

EM

; N

euquén N

atu

ral

reso

urc

es;

Wood M

ackenzi

e,

2019


17

Infrastructure projects – Collection pipelines

Source: Ministry of Energy, GELA’s Analysis, 2019

GNEA

Gto. Norte

Gto. CentroOeste

Gto. Neuba I

Gto. Neuba 2

Gto. SanMartín

Gto. Cordillerano

G. Norandino.

G. Atacama

Gto. Gasandes

Gto. Pacifico

Gto. CP

G. P Dungenes

G. Bandurrias

G. Colon-P

G. CdS

G. Aldea Brasileña

Gto. Litoral

TGNTGSExportaciónGto LitoralGNEA

2

3

1

1 "Central or Litoral " new pipeline

(Section 1: Tratayen – Salliqueló)

Bid postponed twice

Not until 2023/24

2 "Central or Litoral " new pipeline

(Section 2: Salliqueló – San Nicolas)

Not until 2024/25

3 Central west – North pipeline interconection

and North pipeline reversion

Not until 2025


Chile exports

LNG exports

Future Brazil exports

18

Argentina - Gas supply auction for distributors with

competitive prices of Vaca Muerta

Today we already have competitive prices

with Vaca Muerta’s production

Source: Megsa; GELA, 2019

Prices before PIST* (in spanish)

* Entrance Point to the Transportation System

45,652,000

200,000 1,906,000

SPOT* operationsVolume (cm)

Neuquén Santa Cruz Tierra de Fuego

3.75

3.84

3.71

NEUQUÉN SANTA CRUZ TIERRA DE FUEGO

Average prices* (USD/MMBtu)


19

35,5137,25 38,75

33,08

41,1744,74

50,95

57,5059,22 59,22 59,36

56,1252,80

42,15

0,00

10,00

20,00

30,00

40,00

50,00

60,00

70,00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

MM

mcd

Total Oferta Demanda Interna Brasil Argentina Total Demanda

Bolivia: Natural gas supply - demand balance

Source: YPFB, Minem Argentina, Brazil & GELA, Sep 2019.

Less demand of

export marketsMore exports

Production fall


MM

cm

d

Total

supply Internal demand Brazil ArgTotal

demand

20

Hydrocarbon potential in Bolivia

100 Áreas Reservadas a

favor de YPFB

16Bajo Contrato Exploración

(CSP)

4 Negociación de Contrato

15 Convenios de

Estudios

7 Áreas en

Operación por YPFB

58Áreas en Estudios

YPFB

• Portfolio with potential short-

term resources: 31 TCF

Potential Reserves


Prospects in execution

Prospects

Plays potential resources

(Yet to find)

Leads

21

Exploratory activity September 2019

Source: GELA, YPFB, MHE, Sep 2019.

ÑANCAHUAZU-X1ÑCZ-X1

TOTAL BOLIVIE S.A.14/02/2019 Acondicionando

OH 3601 m

1,5TCF (YTF) PS 20%

JAGUAR-X6JGR-X6

SHELL BOLIVIA29/05/2018, Actividad para ST,

(5381 m)

4 TCF (YTF) PS 15%

BOICOBO-X1BCS-X1

REPSOL E&P BOLIVIA05/10/2019

perforando (43m)

1 TCF (YTF) PS 15%

YARARA-X1YRA-X1

YPFB CORP14/09/2019

Perforando 2315m.

0,2 TCF (YTF) PS 20%

Exploratory wells

Natural gas

SIPOTINDI-X1SIP-X1ST

YPFB Corp.22/08/2018 Perforando 4330 m

1 TCF (YTF) PS 15%

ÑANCAHUAZU-X1ÑCZ-X1

TOTAL BOLIVIE S.A.14/02/2019 Acondicionando

OH 3601 m

1,5TCF (YTF) PS 20%

JAGUAR-X6JGR-X6

SHELL BOLIVIA29/05/2018, Actividad para ST,

(5381 m)

4 TCF (YTF) PS 15%

AGUARAGUE CENTRO-X1DAGC-X1D

YPFB CHACO08/08/2019 Perforando 2296

1 TCF (YTF) PS 20%

BOICOBO-X1BCS-X1

REPSOL E&P BOLIVIA05/10/2019

perforando (43m)

1 TCF (YTF) PS 15%

YARARA-X1YRA-X1

YPFB CORP14/09/2019

Perforando 2315m.


CARANDA X1005

Petrobras .15/01/2018

Planificando WO


YTF : Yield to find

PS : Exit rate


1.76 TCF

22

Exploratory Activity 2020 - 2022

Source: GELA, Sep 2019.

Operator Contract area Drilling Year Well

REPSOL E&P

BOLIVIA S.A

Caipipendi (ZT)II TRIM/2020 BOYUY-X3* ✔ (0,67 TCF)

I TRIM/2020 MARGARITA -X1001* ✔ (0,67 TCF)

Iñiguazu (ZT) I TRIM/2020 IÑIGUAZU-X5 *✔ (1,12 TCF)

PETROBRAS BOLIVIA S.A. San Telmo Norte (ZT) IV TRIM /2019 DOMO OSO-X1* ✔ (0,21 TCF)

SHELL BOLIVIA S.S Huacareta (ZNT) II TRIM/2020 YAPUCAITI X1* ✔ (0,95 TCF)

TOTAL BOLIVIE S.A. Azero (ZNT) I TRIM/2021 ILLIMCHUPA-X1* ✔ (2,6 TCF)

YPF S.A. Charagua(ZT) II TRIM/2020 CHARAGUA-X1* ✔ (2 TCF)

Private operators

Operator Contract area Drilling Year Well

YPFB ANDINA S.A. CAROHUAICHO 8B 2020 EDA-X1 ?? 0,5 TCF. PS 18%

YPFB ANDINA S.A. CAROHUAICHO 8D 2021 SRR-X3 ✔ 1 TCF. PS 20%YPFB CHACOS.A. ÁREAS VARIAS 2020 LMS-X13D ✔ 0,5 TCF. PS 20%YPFB CHACOS.A. CAROHUAUCHO 8C 2020 LHS-X2 ?? 0,5 TCF. PS 15%

YPFB CHACOS.A. CAROHUAUCHO 8A 2020 OPB-X1 ?? 0,5 TCF. PS 10%

YPFB CHACOS.A. ITACARAY 2020 ITY-X1 ?? 1,3 TCF. PS 15%

YPFB CHACOS.A. CHIMORE Y OTROS 2020 SMG-X2ST 0 ,5 TCF. PS 20%

YPFB CHACOS.A. ASTILLERO 2020 AST-X1 ✔ 2 TCF. PS 27%YPFB IÑAU 2021 IÑAU-X3 ?? 1 TCF. PS 15%

YPFB SAUCE MAYU 2022 SAUCE MAYU-X1 ?? 0,5TCF. PS 15%

YPFB INGRE 2021 INGRE-X3 ?? 1,5TCF. PS 15%

YPFB and Subsidiaries


1.67 TCF

23

Natural gas price markers – Gas on gas competition


12,4

9

17,1

9

10,6

4

13,7

1

16,3

8

16,2

5

16,9

0

16,1

0

8,4

1

7,4

8 8,7

9

11,2

1

9,7

8

9,0

8

9,2

3

8,5

8

8,8

5

8,3

9

7,8

0

7,9

8

8,2

9

8,6

0

8,9

1

9,7

8

9,9

9 11,0

0

10,7

4

10,8

3

11,4

4

12,0

8

11,7

2

12,2

5

11,7

5

12,1

3

12,2

2

9,8

3

8,5

5

8,8

7

9,4

9

10,0

4

11,0

3

10,5

0

9,4

4

9,9

0

9,4

7

9,8

4

9,3

2

9,7

5

9,7

5

0

2

4

6

8

10

12

14

16

18

20

$U

S/M

MBTU

WTI Argentina Brasil

Before: gas prices

were calculated with

these formulas

NOW: these formulas will no longer be valid, now price marker are related to Henry Hub

24

Content




• Final comments

CONTENT

25

Final comments

• LNG is arriving to the Sothern Cone and will continue arriving and is

quite competitive

• Bolivia natural gas production is declining but there is current

exploration in known region with infrastructure

• Vaca Muerta (Argentina) and Presalt (Brazil) have initiated natural gas

production with competitive costs

• There is existing pipeline and LNG infrastructure that could be used

• Pricing more commercial than political and gas on gas competition

• Prices with Henry Hub marker and not oil linked


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Southern Cone Natural Gas Dynamics - INSTITUTE OF THE … · 2019. 12. 6. · SOUTHERN CONE NATURAL...

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