Autumn takes a long time to reach Buenos Aires, but Argentina is already starting to worry about winter. With gas supplies at risk at the gates of the cold season, Alberto Fernandez’s government sought the hand of Bolivia, one of its oldest suppliers and an ideological ally in the region. Fernandez on Thursday received his Bolivian counterpart, Luis Ars Catacura, to sign an agreement that “will give Bolivia priority” to Argentina in accessing its gas production. After intense negotiations in Buenos Aires, the delegations of both countries agreed to maintain the regular supply for the season, adding a declaration of intent: If Brazil did not need its share of the Bolivian supply, Argentina would have priority to get it.
Vladimir Putin’s war in Ukraine complicated Argentina’s usual import to ensure supply. Between May and September, gas demand increased by 28% in the country. According to the data of the Ministry of Energy, Argentina ensures nearly 75% of its consumption in the national industry, and the remaining quarter depends on the import of liquefied natural gas. Roughly 10% of this demand comes from Bolivia, and the rest arrives by boat. With Europe punishing Russian imports for invading Ukraine and prioritizing domestic consumption, and Argentina unable to increase the production of its industry due to infrastructure problems, rapprochement with an ally is more necessary than ever.
“A lot of times we want to help more than we can,” said Arce Catacora in his appearance at Casa Rosada, the Argentine government palace, after signing the agreement with Fernandez. “You provide what you can and not what we have left,” the Bolivian president said, recalling that his country is also suffering from a decline in gas production.
Bolivia promised to secure the same 14 million cubic meters of natural gas last winter at the same price: eight dollars per British thermal unit (about 27.8 cubic meters of gas), according to Argentine government sources. “Our goal is to continue negotiating with Brazil and to conclude a contract that satisfies our country,” Ars delved into insisting that the commitments with Brasilia stem from an agreement signed between the government of Jair Bolsonaro and the government of Jeanine Anez, who took power in. Bolivia after the sudden departure of Evo Morales in November 2019.
Fernandez, who noted that both countries maintain a close relationship and that the two presidents maintain a personal relationship that was born when both were not in power, said.
In November 2019, in the wake of the political crisis that forced former President Evo Morales to flee Bolivia in the face of military pressure, Ars was one of several former Bolivian officials from Morales’ inner circle who ended up in exile in Mexico at his side. Economy Minister from the movement’s most successful 15-year period in power, Arce was chosen by his former boss as a presidential candidate for the elections he won in October of the following year and started his campaign from the Argentine capital. Fernandez, who just widely defeated then-President Mauricio Macri in the elections in his country, has confirmed that he will be present in La Paz when he takes office.
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This ideological agreement between Peronist Argentina and Bolivia from MAS has come a long way. Buenos Aires and La Paz have maintained a gas import agreement since 2006, signed by Evo Morales and Nestor Kirchner, then prominent representatives of the left turn in Latin America at the beginning of the twenty-first century.
At the end of 2020, state companies in both countries signed the fifth update of the agreement, establishing shipments of up to 14 million cubic meters per day during the winter months of 2021 and a base of 10 million for the rest of the year. However, reduced gas production in Bolivia made it difficult to implement the contract. In this context, Bolivia’s commitment to maintain expectations for 2022 is good news for Argentina. Thursday’s announcement was delayed by nearly three hours, but it also marks a joint decision to put their feet on gas after nearly four months of negotiating the updated agreement.
Argentina is now relying on its ideological proximity to Bolivia to ensure the supply while it awaits the response of the Brazilian government, which is looking from the other side. With the agreement with La Paz closed, Buenos Aires has its sights set on a Friday visit to Brasilia by Economy Minister Martin Guzman.
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