(Corrects description of shipping consultant Drewry in second paragraph of article published May 15.)
May 15 (Bloomberg) -- Argentina must compete for liquefied natural gas with Asian buyers paying 38 percent more as Repsol SA cancels shipments after the government’s takeover of its YPF SA unit, according to Drewry Maritime Services Ltd.
Argentina will struggle to find replacement cargoes amid a global shortage of LNG, said Navin Thakur, research manager at shipping consultant Drewry in Gurgaon, India. The South American country will have to match the Asian price of about $18 per million British thermal units, he said. Argentina had agreed to buy LNG from Repsol for an average of $13 per million units, Julio De Vido, minister of federal planning, public investment and services, said in a statement May 6.
Regional price differences are driving demand for ships that carry LNG. One million British thermal units cost $18.20 in Japan last month, compared with $9.39 in the U.K., according to data from New York-based shipbroker Poten & Partners. Rates to hire large, modern carriers for single voyages will rise 17 percent to $140,000 a day in July, Drewry estimates.
“In the event of Repsol completely turning its back on the LNG supplies to Argentina, Enarsa will have a tough time procuring cargo at $13-14,” Thakur said in an e-mail today. “In the immediate future, the question is not at what price can Argentina get the replacement cargo, but if Argentina will get a replacement cargo at such a short notice.”
Repsol has suspended shipments of LNG to Argentina, obliging the country “to pay more than foreseen,” De Vido said in the statement, posted on the ministry’s website. He gave no further details.
Repsol canceled one LNG cargo to Argentina last month, said Kristian Rix, a spokesman for the Madrid-based company. He declined to comment on nine shipments that remain for the year. Repsol said today it will seek compensation for Argentina’s seizure of its majority holding in YPF, the country’s biggest oil producer.
Energia Argentina SA, the nation’s state energy company, is known as Enarsa.
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