Argentina Starts Gas Exports to Brazil Through Bolivia

Wedoany.com Report-Apr. 2, Argentina successfully exported gas from its Vaca Muerta shale formation to Brazil for the first time, utilizing a network of Bolivian pipelines. This milestone involved a collaboration between TotalEnergies, Bolivia’s state-owned YPFB, and Brazil’s Matrix Energia. Approximately 500,000 cubic meters of gas were transported through the Bolivian infrastructure, marking a significant step in regional energy cooperation.

A drone view shows peach and apple farms and gas processing infrastructure in the Vaca Muerta formation, in Allen, Argentina October 30, 2024.

The deal, finalized after more than a year of negotiations among companies from Argentina, Bolivia, and Brazil, aims to establish a reliable pathway for Argentine gas to reach Brazil, one of Latin America’s largest gas markets. Matrix Energia stated: "The objective of the unprecedented operation is to ensure the technical viability of the logistics network." The agreement includes contracts between TotalEnergies’ Argentine unit and Matrix, as well as a tripartite operational arrangement with YPFB.

Initially, Bolivia hesitated to allow its pipelines to be used solely for transit, preferring to purchase Argentine gas and resell it to Brazil. However, recent discussions overcame this challenge, identifying several potential supply contracts. Historically, Bolivia’s pipelines delivered its own gas to Brazil and Argentina, but with declining domestic production, the region has sought alternative sources and transport options.

For Brazil, this gas inflow supports President Luiz Inacio Lula da Silva’s goal of securing affordable energy for industrial use. Meanwhile, Argentina benefits from increased gas production, driven by President Javier Milei’s economic policies, transforming its energy trade outlook from a deficit to a potential surplus. The current agreement operates under a spot contract, allowing Argentina to pause exports during its high-demand winter months, according to a source familiar with the terms.

Brazil’s state oil company, Petrobras, is also exploring options to import gas from Vaca Muerta. Mauricio Tolmasquim, Petrobras’ former energy transition chief, noted last month: "I think that there is a real possibility to make some deal." He emphasized ongoing talks to determine a mutually agreeable price, while Petrobras simultaneously pursues liquefied natural gas imports for the future.

This export operation highlights a shift in regional energy dynamics, leveraging existing infrastructure to meet growing demand. Bolivia’s YPFB has not yet provided an official comment on the arrangement. If sustained, this flow of Vaca Muerta gas could strengthen economic ties across the three nations, offering a practical solution to Brazil’s energy needs and a new revenue stream for Argentina.