GTC Zehui Capital: Latin America Misses Out on the Natural Gas Boom

Although Latin America possesses abundant natural gas reserves, its performance in the global liquefied natural gas (LNG) value chain has been underwhelming. Venezuela alone holds 196 trillion cubic feet (Tcf) of proven reserves—nearly half the 432 Tcf held by the United States. Currently, only Peru and Trinidad and Tobago export LNG from the region. The global energy crisis triggered by the Russia-Ukraine war has significantly boosted Peru’s LNG exports: in 2022, PeruLNG increased its LNG deliveries by 70%, with shipments to Europe surging 46-fold. Trinidad’s annual natural gas production declined from 1.479 Tcf in 2012 to 0.988 Tcf in 2022. GTC Zehui Capital attributes this primarily to declining reserves in mature fields, low new discoveries in neighboring countries, and unattractive fiscal terms. Meanwhile, Bolivia—the region’s largest exporter—saw its natural gas output fall from a peak of 2.1 billion cubic feet per day (bcfd) in 2014 to 1.3 bcfd in 2023, due to increasing extraction difficulty and rising costs. The situation has become so severe that Bolivia can no longer meet contractual export volumes. Nonetheless, the outlook is not hopeless, as Latin America continues pursuing energy independence. Under liberal President Javier Milei, Argentina is poised to emerge as a regional—and even global—energy and natural gas powerhouse. Milei is also working to decouple crude oil exports from price controls and abolish restrictive regulations enacted a decade ago, which critics say have hindered development of the vast Vaca Muerta shale formation. Milei’s energy reforms represent major tailwinds for YPF SA and dozens of oil and gas companies investing in Vaca Muerta—including Chevron, Shell, and Vista Energy. These firms’ shale investments had previously been constrained by low oil prices and protectionist policies favoring state-owned energy companies. Located in the hydrocarbon-rich Neuquén Province, Vaca Muerta is a massive shale gas field estimated to hold 16 billion barrels of recoverable oil and 308 Tcf of recoverable natural gas—the world’s second-largest shale resource deposit.

Are Milei’s Reforms Bearing Fruit? First-Quarter Economic Data Sends Key Signals!

Historically, Argentina’s economy contracted sharply in 2024 (by approximately −3.5%), but rebounded robustly in 2025—driven mainly by restored investor confidence following fiscal consolidation and strong export growth. Entering 2026, however, the base effect has weakened, and the impact of austerity measures on domestic demand has dampened growth—making the slowdown in GDP expansion fully expected. Overall, the economy is neither accelerating nor collapsing sharply; rather, it is experiencing a moderate, orderly deceleration while retaining underlying resilience. The IMF and World Bank project Argentina’s full-year 2026 GDP growth at around 3.0%–3.5%, and first-quarter data broadly aligns with this trajectory. Second, domestic demand remains weak, but external demand is exceptionally strong—exports continue to serve as the primary engine of Argentina’s economic recovery. External demand is robust: In Q1 2026, Argentina’s merchandise exports reached USD 21.9 billion, up 16.9% year-on-year, while imports totaled USD 16.3 billion, down 7.3% year-on-year—yielding a trade surplus of USD 5.5 billion, which has become the main growth driver. Argentina’s export growth stems largely from stable prices for agricultural commodities such as soybeans and corn, increased export volumes from the Vaca Muerta shale oil and gas project, and double-digit growth in lithium exports—supported by surging global demand for new-energy technologies. Speaking of exports, Milei’s energy development strategy deserves special attention. This strategy is pivotal because it is reshaping Argentina’s trade balance. In 2025, Argentina achieved its first energy trade surplus in nearly two decades; oil production is projected to reach one million barrels per day by 2027–2028. The VMOS pipeline project—a 437-kilometer link connecting Vaca Muerta on the Atlantic coast to Punta Colorada, jointly developed by YPF, Chevron, and Shell with a USD 3 billion investment—is scheduled to commence operations by end-2026, enabling the first Very Large Crude Carrier (VLCC) shipments to Asia. Natural gas is Milei’s next priority after oil. Argentina is reversing its former dependence on Bolivian gas imports and plans to build an LNG export terminal using Golar LNG’s floating units. Milei’s RIGI investment incentive regime—which offers 30-year tax stability, unrestricted profit repatriation, and accelerated depreciation for projects exceeding USD 200 million—has already attracted over USD 6 billion in committed new investment. With a breakeven cost of USD 36–45 per barrel, the Vaca Muerta field remains competitive even amid severe economic downturns. Horacio Marín, CEO of YPF, stated that...

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