UPDATE 3-Argentina to buy fewer LNG cargos than expected-source

Mon Aug 13, 2012 2:33pm EDT

* Bolivia piping more natural gas into Argentina

* Less need to bring costly LNG in by ship

* Argentina wants to eliminate energy imports altogether

* Yearly LNG import bill pressures trade surplus (Adds details throughout)

By Karina Grazina

BUENOS AIRES, Aug 13 (Reuters) - Argentina will buy about 30 percent less liquefied natural gas than originally expected this year due mainly to rising fuel imports from neighboring Bolivia, a source at state energy company ENARSA said on Monday.

Latin America's No. 3 economy, Argentina has seen its energy import bills spike while its own oil and gas output has fallen in recent years - prompting the controversial state takeover of top energy company YPF earlier this year.

A mild Southern Hemisphere winter and slowing economic growth this year are also reducing demand for the costly LNG imports that have dented Argentina's trade surplus, a key source of dollars used by the government to repay debt.

"Of the 80 cargos that were first estimated, only 70 percent will be purchased," said the source, who asked not to be named.

"The main reason is the increase in gas being piped in from YPFB," the ENARSA source added, referring to Bolivia's state energy company. "W e have also had a mild winter, which has reduced domestic household consumption."

Argentina has already lined up 54 of the 56 LNG cargos it plans to buy this year, said the source at ENARSA, which is in charge of the country's liquefied gas imports.

Analysts say the bill for energy imports will not reach the roughly $12 billion initially forecast for this year but it will still easily top the $9.4 billion spent in 2011.

Domestic natural gas output has fallen 15 percent since 2004 while demand has boomed along with the country's economy.

In July, grains exporting powerhouse Argentina signed an interruptible contract with Bolivia's YPFB for up to 2.67 million cubic meters of natural gas to be piped across the border per day - which is cheaper than importing LNG.

That came in addition to a long-term, take-or-pay contract under which Argentina gets 13 million cubic meters in uninterrupted supply per day.

President Cristina Fernandez justified the expropriation of YPF on the grounds that Argentina must regain energy self-sufficiency. The company's new management wants to invest $7 billion per year in production capacity.

Spain's Repsol, the previous majority owner of YPF, canceled 10 shipments of LNG to Argentina after the Fernandez administration seized a 51-percent stake in the company three months ago. ENARSA says those shipments have been replaced by other suppliers. (Reporting by Karina Grazina; Writing by Hugh Bronstein; Editing by Lisa Von Ahn and Marguerita Choy)

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