Brazil and Argentina agree to studies on gas exports from Vaca Muerta, says source

Brazil and Argentina signed a memorandum of understanding (MOU) on Monday to study the development of infrastructure for natural gas exports to Brazil, according to a source close to the matter.

The MOU will create a working group to identify the measures needed to make the supply of gas from Argentina to Brazil viable, with emphasis on gas from Argentina’s massive Vaca Muerta formation, Brazil’s Energy Ministry said in a statement announcing the agreement was to be signed.

The working group will analyze possible routes for the gas to reach Brazil, including the reversal of flow of Bolivia’s pipeline, a route going through Paraguay, and another one through Uruguay, according to the source.

The two countries will also analyze the possibility of a direct connection at Uruguaiana, a Brazilian city that borders Argentina, the source said.

Brazil is Latin America’s largest crude oil producer, but its gas output is insufficient to meet growing domestic demand, which made increasing gas supply a priority for Brazil’s President Luiz Inacio Lula da Silva.

Vaca Muerta is the world’s second-largest shale gas reserve and fourth-largest shale oil reserve. Argentina’s state oil firm YPF (YPFDm.BA), opens new tab is leading activity there in hopes of turning the country into a major energy exporter.

Source: Reuters

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