The memorandum of understanding (MOU) establishes a working group to identify necessary measures for the gas supply from Argentina to Brazil. Credit: Kletr/Shutterstock.

Brazil and Argentina have reportedly signed an MOU to explore the development of infrastructure for natural gas exports from Argentina’s Vaca Muerta to Brazil, reported Reuters.

The agreement aims to address Brazil’s growing domestic gas demand and could lead to imports of up to 30 million cubic metres per day (mcm/d) by 2030.

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The MOU establishes a working group to identify necessary measures for the gas supply from Argentina to Brazil, with an emphasis on the Vaca Muerta formation, the world’s second-largest shale gas reserve.

Argentina’s state oil company, YPF, is leading activities in Vaca Muerta, aiming to transform Argentina into a major energy exporter.

The working group will examine possible routes for the gas to reach Brazil.

According to the report, Brazilian Mines and Energy Minister Alexandre Silveira stated that the initial potential is for Brazil to import 3mcm/d from Argentina, potentially reaching up to 30mcm/d by 2030.

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The routes being considered include the reversal of Bolivia’s pipeline flow, a path through Paraguay and another through Uruguay.

Additionally, the possibility of a direct connection at Uruguaiana, a Brazilian city bordering Argentina, will be analysed, said the report.

Brazil is Latin America’s largest crude oil producer, yet its gas output falls short of meeting domestic demand, making this initiative a priority for President Luiz Inacio Lula da Silva.

In support of this, Vista Energy plans to invest approximately $1.1bn (21.97bn pesos) to expand its operations in Vaca Muerta this year. This investment will focus on enhancing production and reducing costs.

The Vaca Muerta shale formation, considered one of the largest shale developments globally outside the US, has experienced rapid expansion since its inception.