MILAN, Sept 1 (Reuters) - Argentina’s state-controlled YPF is evaluating the scale of national demand for liquefied natural gas (LNG) imports in 2015 and, with ample stocks at hand, does not expect to issue a tender soon, a company official said.
“We are already covered for the next six months at least, and so we are not in a rush to launch any kind of tender for next year,” the Buenos Aires-based official who asked not to be named told Reuters on Monday.
Over the past month, LNG traders have been expecting Argentina to tap the market for supplies for 2015 and even 2016 as well as possibly the fourth-quarter of this year, hoping that such a deal would cement a nascent recovery in spot prices for the fuel.
The source said that YPF had no intention of launching a tender last month and that it was still only gauging demand for 2015, adding that a tender for 2016 supply may be further off.
Some traders said no tender had emerged due to low demand and high stocks at Argentina’s two terminals, Escobar and Bahia Blanca.
The company source confirmed that abnormally mild weather in Argentina’s southern hemisphere winter, with temperatures in Buenos Aires currently around 20 degrees Celsius, has complicated the demand outlook and reduced any urgency to secure additional LNG cargoes.
“We are moving step by step (towards a tender), and there are many steps in state-owned companies,” he said, adding that politicians were “keeping their noses out” of the process.
Argentina’s latest debt default in July and its scrabble for reserves in dollars has so far not impeded its ability to buy dollar-denominated LNG, the YPF source and traders said.
Pre-payment terms agreed with Argentina’s LNG suppliers last year have eased concerns over the impact of the latest crisis.
In the new system, YPF pays for a quarter of a cargo’s value before it is loaded onto a tanker and transfers the rest before the vessel enters its territorial waters, traders said.
Argentina, which typically buys its LNG in annual tenders, refined its strategy last year by tapping markets for supply two years forward while leaving a portion of its demand unmet. (editing by Jane Baird)