Southern Cone gas and power short-term outlook: April 2024

As winter approaches, Argentina must find solutions to meet its increasing demand for the season. Ten LNG cargoes have been procured in the end of this month (totaling 20 this year until now), but with the delay of the Gasoducto Norte reversal, gas from Bolivia remain the main alternative to supply the Northern Provinces. This represents a great opportunity for YPFB to maximise its revenues during the season, but potential swap agreement between Petrobras and Enarsa may put at risk this opportunity. Despite expectations that the El Niño will end in the upcoming months, April presented good affluence, with a monthly increase in water inflow in all three markets: Brazil, Argentina and Chile. This was reflected in an increase in y-o-y hydro generation, which, combined with the entry of new wind and solar projects, has displaced gas dispatch and led to lower average marginal costs in the period.