Argentina strike reduces gas supply as winter approaches

By Charles Newbury

BUENOS AIRES

A natural gas workers strike in Argentina has raised concerns of shortages Wednesday, as low temperatures push up heating demand.

Workers in the southernmost province of Tierra del Fuego walked off the job late Tuesday to demand higher wages and job security, as well as to protest huge increases to their gas bills.

The strike has cut off deliveries of 16 million cubic meters per day of gas supplies from the archipelago, the Energy Ministry said in a statement.

At the same time, another strike by workers at a northwestern field is restricting deliveries of an undisclosed amount of gas, while imports of liquefied natural gas (LNG) have been delayed by poor weather, the ministry said.

Argentina relies on gas to meet half of its energy needs, which average 130 million cubic meters per day through the year and surge to 180 million during the May to September cold season.

Any disruptions in production or imports can cause shortages.

To limit the impact on homes for cooking and heating, the Energy Ministry launched a rationing plan late Tuesday.

Factories and power plants have been ordered to cut to zero their gas consumption “as soon as possible,” according to a statement.

They will have to burn alternatives such as diesel and fuel oil, leaving what gas is available for homes, hospitals and schools, the ministry said.

Argentina produces about 120 million cubic meters of gas per day and imports another 30 million, according to Energy Ministry data.

Of the imports, poor weather has delayed the delivery of two cargoes of LNG, while the strike in the north threatens to disrupt imports by pipeline from Bolivia, which delivers about 15 million cubic meters per day, the ministry said.

To contend with the shortages, the ministry said it would import 1,200 megawatts of electricity and seek an additional 3 million cubic meters per day of gas from Chile, which is piped in from two regasification terminals on the Pacific Coast.

Argentina started importing 5 million cubic meters per day from Chile in May.

Strikers in Tierra del Fuego, a big source of gas from onshore and shallow-water fields, appear to have dug in their heels.

Gas injection from a plant operated by France’s Total, the biggest gas producer in that province, “has been paralyzed since last night and will continue that way,” Moises Solorza, the secretary general of a union representing field supervisors, told the Argentine state newswire Telam on Wednesday.

He said a big source of conflict for the workers is a surge in gas prices, which the government of President Mauricio Macri has raised by more than 300 percent since taking office in December.

The higher prices are designed to encourage exploration and production to eventually shore up gas supplies, helping to reduce imports.

The hikes have angered consumers, however, some of which are taking legal steps to block them.

“Gas is a right in Tierra del Fuego, not a luxury as suggested by the national government,” Solorza said. “We believe that today can be a very important day against the price hikes on gas.”