Argentina turns around LNG tanker for having Russian supplies

Argentina state-owned energy company Enarsa has called off the unloading of a cargo of liquefied natural gas from Geneva-based Gunvor after discovering it contained Russian supplies, a company source said July 19.

The decision was made by Enarsa President and Argentina Economy Minister Sergio Massa because of the international sanctions against Russia for its war on Ukraine.

The source, who requested anonymity, explained that the cargo was due to be unloaded by the Flex Artemis tanker at a floating regasification and storage unit in Bahía Blanca, a port in southern Buenos Aires province. After it was discovered that the gas was from Russia, the state-owned bank in charge of paying for the supplies, Banco Nación, called off the deal and notified Enarsa and the economy minister.

Massa, the country's chief energy architect, said late July 18 that the delivery violated the delivery contract and international sanctions.

"The world has a system of sanctions," Massa said on television. "We took the decision in the face of international sanctions against certain Russian companies."

A Gunvor spokesman said the transaction complied with all applicable sanctions, including those of the US and the EU.

"Argentina has not adopted any sanctions against Russia," Seth Thomas Pietras said in an email. "The counterparty had been transparently informed of product origin pursuant to contractual agreements."

Without the delivery, Enarsa plans to use more diesel supplies to meet demand from the power sector as gas supplies run tight in the country.

Argentina typically imports gas — as well as diesel and fuel oil — in the winter months of June, July and August to meet residential heating demand, which rises to as much as 180 million cu m/d from a year-long average of 140 million cu m/d.

Enarsa, which handles the country's gas imports, has lined up the delivery of 44 cargos of LNG this year for delivery between March and August, up from 41 cargos delivered in 2022, according to company data.

Argentina has been trying to reduce gas imports — supplies are also brought in from Bolivia — by increasing local production from Vaca Muerta, a huge shale play. The startup of the first 11 million cu m/d capacity of a 44 million cu m/d pipeline serving the play is helping to trim imports so that they are concentrated mostly in winter.