Argentina's state energy company Enarsa on Thursday expects to receive offers in response to a tender it issued for the delivery of about eight LNG cargoes this year and plans to discard any that it considers to be too pricey, an industry source said.
"The intention is to reduce the prices' Argentina pays for importing LNG," the source, who spoke under the condition that he not be named, said.
The bids are expected to come in late in the afternoon.
Enarsa has said it won't pay more than $13/MMBtu plus Henry Hub, puttingthe current price at a final of close to $15/MMBtu.
It has discarded bids from previous tenders in an effort to secure lower prices, even throwing out all but one bid submitted in response to a recent tender, according to the source.
Some suppliers consider Argentina a riskier market because it defaulted on a $100 billion bond during a 2001-2002 economic crisis. There also is concern about the Argentine government's plans to take over part of Repsol-backed YPF, the country's biggest energy company. An announcement on that decision is expected late Thursday.
Enarsa wants to import the cargoes from this latest tender for delivery during the colder months of May to September, when gas consumption surges. That would take the total imports for this year to 62 cargoes, up from 56 over the same period in 2011.
Argentina plans to import up to 80 cargoes this year, meaning it will hold more tenders later in the year.
The country is increasing LNG imports to meet energy demand as the economy grows and local gas production sags.
The economy expanded an average of 8% a year between 2003 and 2011 and is set to grow as much as 4% this year. Over the same period, domestic gas production fell 13% to 125 million cu m/d.
