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ECONOMY | 12-08-2023 08:22

Argentina’s Enarsa cancels LNG cargo on warm winter, low demand

State-run energy company Enarsa cancels another shipment of liquefied natural gas amid low demand and warmer-than-usual winter.

Argentina’s state-run energy company Enarsa has cancelled another shipment of liquefied natural gas, according to a person familiar with the matter.

This cancellation was because of low demand resulting from warmer-than-usual winter temperatures in the South American country, said the person who asked not to be named because the information is private. TotalEnergies SE was the seller of the cargo, the person said. 

Enarsa didn’t immediately respond to requests for comment. TotalEnergies couldn’t be reached for comment outside of Paris business hours.

Last month, Argentina rejected a cargo that was scheduled be delivered by Swiss trading house Gunvor, with Argentine officials citing concerns for sanctions because the LNG originated from Russia. Gunvor maintained that the transaction was lawful and in compliance. 

The more recent cargo was due to arrive on the LNG Endurance to its Bahia Blanca terminal, but abruptly changed course in the Atlantic and is now heading to France’s Montoir terminal, shipping data show. The French-flagged vessel loaded at Cameron LNG, where France-based TotalEnergies has offtake.

This winter’s mild weather for the southern hemisphere country has crimped demand for the heating fuel. On Friday, the temperature in Argentina’s capital Buenos Aires was 59F (15C), according to the country’s meteorological agency Servicio Meteorologico Nacional. 

On a call with analysts on Thursday, major natural gas producer Pampa Energia SA reported that the mild winter has softened domestic demand, curtailing its production and second-quarter earnings. The company also said that full commissioning of the new Nestor Kirchner pipeline was delayed as an LNG cargo on the Seapeak Magellan unloaded in Bahia Blanca this week. The line only started to operate at its current full daily capacity of 11 million cubic metres this week.

Meanwhile, power distributor Edenor SA has said it has more customers, but is selling less power. In the second quarter, its trajectory of energy sales dropped 3.9 percent versus a year earlier. 

by Ruth Liao, Anna Shiryaevskaya & Jonathan Gilbert, Bloomberg

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