During the Meeting with the CEOs that took place at AOG 2022, the global CEO & CTO of Galileo Technologies, Osvaldo del Campo, spoke of the potential of the Distributed Production of Liquefied Natural Gas (LNG) in unconnected wells to meet the consumption of gas in the region and in the oil industry.
The executive highlighted that Galileo developed the technology to build large LNG production plants and the most economical solution in the world to do so in a modular way. In turn, they have microscale technology that allows LNG to be produced in small places and used in multiple applications. In the United States, the company produces LNG in remote and abandoned wells in Pennsylvania and brings it to 80 peak shaving plants in the northeast of the country to flatten demand spikes in the winter. They are also producing LNG to supply the oil industry itself.
According to del Campo, there is a boom in demand for small-scale LNG to be used as fuel in fracturing equipment or to generate power for drilling equipment or auxiliary equipment. That LNG, many times, provided a win-win formula, since, instead of obtaining it from a pipeline gas, they produce it from a flaring that is being mitigated or from an associated gas that otherwise could not be caught.
The head of Galileo Technologies predicts that a similar process will take place in Argentina: “The needs are the same, the cost structures are similar and the motivations that led the United States to migrate all its infrastructure to the use of gas in the last 2 or 3 years too.”
However, he warned that Argentina must take into account two aspects. The first is the regional market: “I disagree on the issue of large LNG plants; I think that competing against hyper-amortized assets like those owned by Qatar or any other, beyond the window of opportunity that we have now, is complex and I think there is a huge regional demand. Much of what Galileo is doing in LNG takes place in Brazil, because that country is looking towards onshore, which was previously totally abandoned.”
“Recently, we finished a very large plant in Azulão, in the heart of the Amazon, which produces 600,000 m3/day and will go to 1,000,000 m3/day. That LNG is transported to a thermoelectric plant that is more than 1,000 kilometers to the north, where there is a very large demand. But the south of Brazil has the same problem: it does not have duct capillarity.”
“So, if Argentina wants to export its gas and only injects it through pipelines, it will have limitations. Currently, we export little, but we are arriving by truck to the south of Brazil at a price equal to or lower than that of the Brazilian pipeline. That opens up a lot of possibilities and we can think of a transporter project, without using the hard and limited existing infrastructure.”
The other issue to consider is peaking, “which can also be synergized and say: I store, I use the same liquefaction infrastructure to store, I flatten the curve, I give the producer the possibility of thinking of a flatter, more constant demand over time throughout the year, not so stressful in winter -which is a bit of what is being done in the United States- and also use that capacity to produce in times of valley and be able to export.”
For del Campo, this is the path that Argentina should choose since the technology is available, there is an interesting regulatory framework that has been carried out in recent years and that allows plants to be developed, built and to transport LNG in all its routes and even offered in the international market.
“If we can develop our own model, and we have the conditions to do so because we have the gas, just as we did in other countries, we will be able to serve the region. We are talking about many millions of m3/day of potential consumption in the south of Brazil, in Uruguay and Paraguay, in many applications. If we work on the basis of modular, scaled and elastic technologies, we have many chances that the projects can be carried out.”
