By Asher Levine and Oleg Vukmanovic
BUENOS AIRES/LONDON Oct 16 An Argentine federal
judge has blocked the country's top liquid natural gas (LNG)
supplier, Spain's Gas Natural Fenosa, from
participating in tenders for the fuel, an Argentine consumer
rights group said on Wednesday.
The ruling, first reported by local newspaper Clarin, could
complicate the energy-deficient nation's ability to keep its
power plants running.
Until a court rules on whether GNF has potential conflicts
of interests, the company will be unable to participate in
tenders to provide fuel to the South American nation.
That includes a tender for 5.57 million tones of liquefied
natural gas, or 93 standard-sized shipments, for 2014 and 2015
that Argentine state-run oil firm YPF has recently
launched, worth around $4.5 billion. The tender covers supplies
for Argentina's two LNG import terminals, Bahia Blanca and
The Argentine Consumers' Union filed a lawsuit saying
another Spanish firm, Repsol owns a 30 percent share in
GNF while also holding a stake in YPF, which brokers the fuel
purchases on behalf of fellow state-run energy company Enarsa.
As a result of the ruling, GNF stands to lose a contract to
deliver 2.7 million tones of LNG into Argentina's Escobar
terminal which it was widely tipped to win.
GNF is one of few global LNG suppliers that has the small
ships needed to supply the river terminal, which is unable to
receive standard tankers due to water depth restrictions.
YPF appeared to be clearing the way for GNF to win the
Escobar portion of the tender, several traders said, citing
terms that appeared to favor the Spanish supplier.
YPF's decision to seek a single supplier for the Escobar
terminal in the latest tender document, as well as changing how
the LNG supplies would be priced, led to widespread speculation
among traders that GNF was set to win this portion of the
"GNF is more comfortable with Brent pricing," said one
source, citing its experience of handling oil-indexed gas
supplies via the Algeria-Spain Maghreb pipeline. The pricing of
deliveries into the Escobar terminal under previous tenders was
based on U.S. gas prices, sources said.
If GNF is not able to deliver, it will pose significant
logistical challenges for YPF to find an alternative supplier,
another source said.
GNF had no immediate comment.
"We don't have licenses here, we have a private, invite-only
competition," Fernando Blanco Muiño, president of the Argentine
Consumers' Union said. "It is not very transparent and not very
serious. We ask that they comply with national business laws."
Citing what he sees as a conflict of interests between YPF
and GNF, Muino added that "we believe this violates the consumer
rights law and the competition laws of our country."
A spokesman for YPF declined to comment.
Repsol holds an 11.82 percent stake in YPF following
Argentina's nationalization of Repsol's controlling assets in
the state-owned firm last year.
Fuel imports have been growing in Argentina due to a
persistent fall in local production and an increase in demand,
especially for gas.
Argentina's fuel imports rose 31.9 percent in August 2013
from the same month last year. Led by liquid natural gas
purchases, imports totaled $942 million, according to data from
Argentina's energy secretary.
GNF was responsible for about 70 percent of the country's
imports of the fuel this year and last, the paper said.
The company has been operating in Argentina since 1992
through subsidiary Gas Natural BAN, which supplies the northern
and western regions of Buenos Aires, the largest industrial area
in the country.