Argentina targets Asian crude export markets with new VLCC-capable terminal

Argentina's oil producers aim to widen exports to new markets like India once a new Very Large Crude Carrier export terminal is operating, an executive of the country's third-biggest oil producer said Aug. 13.

This capacity to reach new markets will come with the launch of Vaca Muerta Oil Sur, a 550,000 barrel/day pipeline and export terminal that is expected to begin operations early next year at 180,000 b/d and reach full capacity in early 2028.

This new system will expand on exports of Medanito, a sweet light crude produced in the Vaca Muerta shale play, via smaller vessels, Vista Energy COO Matías Weissel said at the AmCham Energy Forum in Buenos Aires.

These shipments so far have been focused on the regional market -- mostly Brazil and Chile -- and the US West Coast, he said, adding that the new export terminal will allow producers in the Patagonian play to export crude globally and to larger buyers.

This is already starting to happen as production rises in Vaca Muerta and international buyers look to diversify supply as the US-Iran war disrupts Middle East supply. Indeed, Weissel said Vista has been expanding its exports over the past few months to Australia, Malaysia and Singapore.

Selling to larger buyers

Loading VLCCs via Vaca Muerta Oil Sur will make it possible to ship cargoes of 2 million barrels to larger buyers, and at more competitive prices, Weissel said.

"This gives us the capacity to penetrate markets like a refinery in India," something that has not been feasible with smaller vessels like Panamax, he said.

Horacio Marín, CEO of YPF, the country's biggest oil producer, said on Aug. 12 that the potential for ramping up oil exports from Vaca Muerta has led his firm to consider increasing the capacity to 700,000 b/d after it reaches full capacity in 2028.

YPF is leading the $3 billion Vaca Muerta Oil Sur export project through VMOS, a consortium of oil producers in Vaca Muerta that includes Vista as well as Chevron, GyP, Pampa Energía, Pan American Energy, Pluspetrol, Shell and Tecpetrol.

When this and other takeaway projects are completed, Argentina will have 1.5 million of capacity in place by 2030, three times more than the country's 500,000 b/d of domestic demand. This means that the country could be exporting 1 million b/d by 2030, according to most estimates. That would be up from 145,000 b/d in June, according to data from the Argentina Oil and Gas Institute, an industry group.

Vaca Muerta is expected to lead a rise in Argentina's total oil output to 1.7 million b/d in 2030 from 900,000 b/d in June, according to a forecast from the Argentinian Chamber of Hydrocarbons Exploration and Production, an industry group.