The European Union (EU) and Argentina have signed an agreement on the delivery of Argentine liquefied natural gas (LNG), as well as renewable energy and hydrogen, according to European Commission documents recently posted.
The memorandum of agreement (MoU)was signed by European Commission President Ursula von der Leyen and Argentina President Alberto Fernandez at the EU-CELAC Summit in Brussels, Belgium.
The MoU contains a provision for “enabling a stable delivery” of LNG from Argentina to the EU that is “consistent with their respective long-term decarbonization objectives and consistent with the goals of the Paris Agreement”. The agreement further states that the LNG delivery “is based on the principle of market-oriented pricing”, with one of the next steps being the creation of a plan “for the efficient utilization of infrastructure in order to accelerate the export and shipment of LNG to the European Union”.
The agreement also sees the EU and Argentina working together to develop and promote renewable energy and energy efficiency, as well as the use of hydrogen and its derivatives in applications, such as industrial processes, transportation, and energy storage.
The MoU also sees the two parties committing to reducing methane leakages in the fossil gas supply chain to “the maximum level technically feasible”. Toward this the EU and Argentina will examine technologies to reduce venting and flaring, as well as integrate recovered methane into the supply chain “to increase the efficiency of the natural gas supply process”.
“Our energy cooperation is a particularly promising field to ensure a just and clean transition on both of our continents”, von der Leyen said. “The Memorandum of Understanding being signed today will guide and shape our cooperation in the years to come. It is an important step in rolling out the EU’s Global Gateway Investment Agenda (GGIA) and will help us achieve our objectives on climate and energy.”
The GGIA, also announced Monday, will have Team Europe invest $50.54 billion (EUR 45 billion) in more than 130 projects in Latin America and the Caribbean until 2027, in sectors such as clean energy, raw materials, health, and education. Team Europe consists of the EU, EU member states, the European Investment Bank, and the European Bank for Reconstruction and Development.
Von der Leyen also announced a $2.25 billion (EUR 2 billion) investment supporting Brazil’s green hydrogen production and energy efficiency, as well as the launch of the Fund for Renewable Hydrogen in Chile, which is supported by Team Europe and has an initial budget of $252.7 million (EUR 225 million).
The EU has been looking at alternatives to reduce its reliance on Russian energy following Russia’s invasion of Ukraine and the corresponding sanctions on the nation. In 2022, the USA more than doubled its LNG exports to the EU, according to a joint official statement. In 2022, USA exports to the EU were 1.98 trillion cubic feet (56 billion cubic meters), up from 776.92 Bcf (22 Bcm) in 2021, which made the EU the largest destination for USA LNG exports, accounting for more than 52 percent of supplies. At the end of 2022, Russian gas accounted for 16 percent of the EU’s gas imports, down from 37 percent in March 2022, the statement said.
Argentina’s Vaca Muerta, one of the major shale plays globally, is projected to reach an output of one million barrels per day of crude oil by 2030, provided that takeaway capacity and rig availability do not limit its growth, according to an earlier news release from research company Rystad Energy.