Southern Cone gas and power short-term outlook: June 2022

The combination of demand decrease and above-average hydrology in June enabled the system operators to keep the reservoir levels stable. Hydro inflows were 107% of the long-term average; aggregate reservoir levels reached 74%, the highest level for the month since 2011. As a result, the prospects for the gas balance have slightly improved since Bolivia has increased flows to Petrobras to 16 Mcmd. On the other hand, a severe winter with temperatures 10% below average has tighten the Argentina gas and power markets significantly, boosting gas demand for residential users and liquid fuel consumption for power generation. The YPFB’s decision to deliver the additional production from Margarita-10 well to Brazil also contributed to tighten the gas market in June. Meanwhile, the Argentina’s Energy Secretariat approved a few firm export GSAs to Chilean players. One of them will allow firm deliveries during winter, while other eight will deliver volumes after October.