Argentina already has a well-developed gas distribution infrastructure from natural gas operations, which has sufficient spare capacity to support new investments in shale gas. However, it lacks the technology, equipment and services required to support large-scale production. The industry’s success hinges on the availability of capital, the development of a supplier base, and the growth of a skilled labor pool.
Current natural gas prices in Argentina are low, and prices will need to climb to make shale gas production economically viable. Initial investment costs are high, but margins are expected to improve over the long term. Argentina’s gas-plus regulatory framework promotes better selling prices for new offers of shale gas.