India is seeking emergency supplies of liquefied petroleum gas (LPG) – commonly used for cooking and heating – as reserves dwindle to just ten days’ worth, prompting the government to explore alternative suppliers. Argentina is emerging as a potential source amid escalating concerns over energy security.
The unusual geographical distance typically makes the trade unprofitable, but the urgency has shifted the economics. Indian state-owned companies are currently paying premiums of between $350 and $400 per ton above the April reference price, according to industry publication Argus.
The crisis threatens India’s restaurant industry, with the National Restaurant Association of India (NRAI) warning that up to 60% of establishments could be forced to close within days if LPG deliveries aren’t restored. Approximately 85% of restaurants in the country rely on LPG as their primary cooking fuel, Argus reported.
Two Argentinian companies, MEGA – backed by YPF, Petrobras, and Dow – and Transportadora de Gas del Sur (TGS), are positioned to capitalize on the demand. TGS recently announced a $3 billion investment to expand its gas processing and export capabilities, according to local news reports.
TGS confirmed it loaded two shipments of LPG destined for India between November and February. India is poised to surpass Japan as the world’s fourth-largest economy, trailing only the United States, China, and Germany.
Currently, the MGC Astor tanker is en route to the port of Haldia, south of Kolkata, after loading LPG in Bahia Blanca, according to data from Kpler, a platform that tracks maritime traffic in real-time.
India consumes around 2 million tons of LPG per month. By comparison, Argentina uses 1.5 million tons annually, according to Pedro Cascales, president of the Argentine Chamber of Liquefied Gas Companies. LPG cylinders remain a crucial energy source for millions of households and businesses in densely populated areas lacking extensive pipeline infrastructure.
Last year, India imported nearly 21 million tons of LPG through the Strait of Hormuz, equivalent to approximately 40 shipments per month. This highlights the country’s significant reliance on this strategic corridor and presents an opportunity for Argentina, particularly with the development of the Vaca Muerta shale formation.
Argentina already has projects underway to export both oil and liquefied natural gas (LNG), but a third potential growth area is the export of associated gas – a byproduct of oil production that often lacks immediate outlets. TGS estimates this segment could generate additional revenue exceeding $1.2 billion per year.
The process involves separating various gases associated with hydrocarbon extraction. MEGA operates a processing plant at the Loma La Lata field, owned by YPF, where it separates methane – used for residential and power generation – from other components like ethane, butane, propane, and natural gasoline. These are then transported in liquid form to Bahia Blanca for final fractionation.
Dow primarily purchases the ethane for petrochemical production, while butane is bottled for domestic use. Propane is distributed to cities and towns not connected to the national gas pipeline network. Natural gasoline is sold as industrial fuel and largely exported to the United States. Butane and propane are also exported to regional markets, particularly Brazil.
“Both MEGA and TGS have production limits. What’s increasing now is the price due to greater competition,” explained an industry executive. “Europe could also increase demand, as its winter reserves fell below minimum levels and now need to be replenished.”
TGS announced a $3 billion investment to expand the production and export of liquids associated with gas. The NGL (Natural Gas Liquids) project will transform the Tratayén gas conditioning plant into a processing facility capable of separating marketable components from natural gas.
Dry gas will continue to enter the transportation system, while the liquids will be transported via a 573-kilometer pipeline between Tratayén and Bahia Blanca. A fractionation plant will then separate the liquids into propane, butane, and natural gasoline – destined primarily for the petrochemical industry and the packaged gas market – for subsequent export.
