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Argentinian LNG imports hit record high in July on electricity demand

Friday, 14 August 2015 | 11:00
Argentinian imports of LNG hit a record high in July, totaling 1,997,360 cubic meters, as rising demand for electricity this year prompted state-owned buyer Enarsa to boost imports ahead of the peak winter demand season, data from Platts unit Eclipse Energy and the National Commission of Atomic Energy, or CNEA, showed Thursday.

July LNG imports to Argentina were up 30% from June, when 1,535,904 cu m were imported, and up 33.8% year on year from July 2014 imports, which totaled 1,492,586 cu m.

In February, March and April, Argentina saw year-on-year increases in electricity demand of 8.7%, 17.9% and 4.5%, respectively, prompting Enarsa to double the number of July-imported cargoes to 14 through a seven-cargo tender launched in early May.

The tender, which closed in mid-May, awarded six Escobar-delivered cargoes in the high $7s/MMBtu and a single Bahia Blanca cargo in the low to mid-$7s/MMBtu, Platts data showed. Gas Natural Fenosa was awarded the single Escobar slot, while Trafigura was awarded the remaining six cargo slots.
Traditionally, July is the coldest month in Argentina, when the average temperature in Buenos Aires, where the majority of electricity demand is concentrated, dips to 11 degrees Celsius, according to historical data from Custom Weather.

The decision to boost gas imports during the peak winter demand season came as fuel oil, the principal alternative feedstock for thermal power in Argentina, saw prices begin to rise early this year.

In April, the average price of 380 CST 3.5% delivered fuel oil in Buenos Aires reached $406.40/mt ($10.18/MMBtu), up 40% from prices that averaged just $289.98/mt in January.

Over the same period, LNG prices saw a steady decline. The Platts JKM, a benchmark assessment of the spot price of LNG delivered to Japan and Korea, declined to an average $7.08/MMBtu in April, down from an average price of $8.81/MMBtu in January, Platts data showed.
Source: Platts
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