EU considers gas imports from Argentina

(Reuters) - The European Union is considering possible gas imports from Argentina, which is a net gas importer but plans to expand domestic production, a draft document showed.

A draft memorandum of understanding, which the two sides plan to sign on Monday, said any gas trade should not impact Argentina's own consumption needs, and the two sides' targets to curb climate change.

"The participants endeavor to cooperate towards enabling a stable delivery of liquefied natural gas (LNG) from Argentina to the European Union," said the document, seen by Reuters, which could be changed before it is published.

The European Commission declined to comment on the draft.

Argentina has an energy deficit, meaning it needs to import fuel during the months when it consumes the most. It registered a $5-B energy trade balance deficit in 2022.

But the country, which has the world's second largest unconventional gas reserves, is expanding production at Vaca Muerta, a shale formation in Patagonia.

European countries have for the last year been seeking new gas supplies, after former top supplier Russia cut flows following its invasion of Ukraine.

But the EU also expects its gas use to fall by the end of the decade as it seeks to meet climate change goals. It has said the majority of Russian gas supplies should be replaced with clean sources of energy, not fossil fuels.

Lisa Fischer, Program Lead at climate think tank E3G, called on the EU to focus on supporting Argentina in developing renewable energy and other solutions that do not cause climate change.

"By the time the Argentinean gas comes online - and they don't even have the full export infrastructure to do so [to export gas to Europe] - I don't think the European Union will need that gas any longer," Fischer said.

The draft document said the two sides would work together in the areas of renewable energy and hydrogen fuel, and endeavor to cut methane emissions in their gas supply chains.

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