Could Argentina export oil and gas through the Pacific Ocean?

Chilean Energy Minister Ximena Rincón visited the Vaca Muerta field in Neuquén province a few weeks ago and invited Argentina to use their ports on the coast of the Pacific Ocean to export oil and gas to Asian markets. A communiqué from Chile’s foreign ministry offered more details on the proposal.  “Chile can serve as a close, stable, and complementary regional market for Vaca Muerta’s energy production, offering port infrastructure, LNG [liquefied natural gas] terminals, regulatory expertise, logistical capabilities, and a strategic geographic location for exploring, in the long term, potential routes to Pacific markets,” the text explained. The reasons behind the offer are clear, as Chile imports nearly all of its hydrocarbons. This leaves them exposed to price volatility due to the war in the Middle East. Santiago has already been relying on its neighbor’s reserves. In 2025, 20% of energy imports came from Argentina, equivalent to US$2.8 trillion. This made Argentina Chile’s second-largest energy supplier, behind the United States. The ambitious plan, however, runs up against a problem endemic to Argentina: government bureaucracy and the country’s poor track record as an energy exporter.  Energy integration and Argentina’s track record Daniel Dreizzen, director of energy consulting firm Aleph Energy, told the Herald that exporting via the Pacific would be a giant step forward for Argentina, given that Latin America is “completely fragmented in terms of energy.”  There are two specific reasons, however, why this would be difficult to achieve.  “The first is that Argentina will always want to carry out [these projects] on their side, both from a political standpoint and in terms of what it means for development,” he argued. There are currently two LNG export projects under development along the Atlantic coast in Río Negro province.  The first is Argentina LNG, led by state-run oil company YPF, along with Italy’s Eni and Abu Dhabi’s Adnoc. The other is being driven by Southern Energy (SESA), a consortium comprising PAE, YPF, Pampa Energía, and Harbour Energy.  The other reason cited by Dreizzen is that it would also pose a risk for Chile because it would have to rely on a project in another country. He cited a precedent from 19 years ago, when Argentina abruptly cut off gas supply to its neighbor.  A cold snap caused demand to spike in Argentina, which was unable to meet its commitments to its neighbor — due to declining local production. This led the country to prioritize its domestic market and abruptly cut off the supply. “[Chile] had to import liquefied natural gas to generate electricity domestically, which was extremely expensive, and had to bring in regasification plants that it still uses today,” Dreizzen explained. Relations between Argentina and Chile, however, are improving, he added, and there are “many points in common.” Three weeks ago, Neuquén and the Biobío Region in Chile took a new step toward energy and trade integration by signing a series of agreements aimed at boosting oil and gas exports. During that meeting, the parties agreed to create the Neuquén–Biobío Roundtable for Energy Cooperation and Integration to promote projects related to hydrocarbon transportation and the complementary supply of natural gas and electricity. The required infrastructure Dreizzen stated that the most difficult issues are the weather conditions at Chilean ports, such as rising sea levels and frequent heavy swells. “They need to improve drainage so that larger ships can enter and the weather has less of an impact,” he said, adding that the Trasandino Oil Pipeline connecting Neuquén with the Biobío region would also need to be upgraded.  Daniel Gerold, founder of G&G Energy Consultants, told the Herald that the gas pipeline running from Neuquén to central and northern Argentina — where it would later connect with the outskirts of Santiago, Chile — would need to be expanded.   Infrastructure work would also be needed in Chile. He mentioned the Quintero LNG import terminal, a port near Valparaíso, which houses the LNG receiving facility operated by companies in Chile. According to Gerold, investments are required to liquefy the gas that will arrive via the pipeline from Argentina and convert it into LNG for export. He also emphasized that, despite the history of tension between the two countries over gas supply disruptions, there is currently “a favorable environment for all these initiatives to thrive.” The bureaucratic challenge Even if those obstacles are overcome, there would still be issues to resolve, according to the center-left think tank Argentine Center for Political Economy (in Spanish, CEPA).  “The risk is that the ambition to reach Asia will run aground on government bureaucracy,” they warned.  In one of its latest reports, the think tank argued that the success of such initiatives “depends entirely on resolving a complex web of bureaucratic, idiosyncratic, tax, and customs-related friction that currently acts as invisible yet effective barriers.” CEPA economists stated that exporting through other countries requires an “international transit” framework that currently “lacks the necessary flexibility.”  “Determining who collects what, how royalties are calculated in an indirect export scheme, and which tax exemptions apply to avoid double taxation are questions that, if not resolved through clear bilateral treaties, will turn logistical efficiency into an unaffordable cost,” they argued. Customs authorities in both countries, they explained, “must coordinate protocols that allow for absolute product traceability without causing delays that erode profit margins.” “Ultimately, the development of this export channel is a test of maturity for regional integration.” Cover photo credit: Rita Willaert