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The TGS company today presented a project to the Ministry of Economy to invest US$700 million in expanding the gas transportation capacity from Vaca Muerta to Buenos Aires
Barely a week after the Senate approved the Bases bill, which included the large investment incentive regime (RIGI), the company Transportadora de Gas del Sur (TGS) today presented an initiative to the Ministry of Economy to invest US $700 million in the transportation expansion of a pipeline that connects Vaca Muerta with Buenos Aires. The proposal is an alternative to the Governments idea of ??putting out to tender the second section of the Néstor Kirchner gas pipeline, which was announced last week by the Secretary of Energy, Eduardo Rodríguez Chirillo.
Unlike the official proposal, the TGS project allows using the pipeline already built in the first section and installing three new compressor plants and other equipment to expand the transportation capacity from 21 million cubic meters per day (m3/d) to 36 million. Then, an additional extension would be made to the TGS transportation system, which would allow the available gas supply to the Litoral and northern Argentina to increase by 14 million m3/d.
The expansion of transportation capacity will allow the replacement of imports of liquefied natural gas (LNG) and diesel, which, according to TGS calculations, will allow the country to save US$700 million in the trade balance and US$500 million in fiscal accounts, since The national production of Vaca Muerta is more economical.
“It is the first initiative that comes from the private sector to carry out an investment in infrastructure of US$700 million, with the purpose of executing and financing with its own funds,” said Oscar Sardi, CEO of TGS, in a press conference, accompanied by the main shareholders of the company, Luis Fallo, vice president of TGS and representative of the Sielecki family, and Gustavo Mariani, CEO of Pampa Energía.
The work would be repaid with the value of gas transportation rates, which had a sharp increase of 675% last April, after being flat for years due to the rate freezing policy applied by the previous government.
“In the previous government the conditions were not in place to make this investment. Now certain conditions have been met to make an investment of these characteristics. It has to be sustainable so that investments continue to be made. We have gas for 120 years; “Either we take advantage of it today, or we have to make a monument in the future that says that we left billions of dollars buried here,” Sardi said.
Although the current administration also failed to keep its promise in May and June that rates would be updated on a monthly basis, the company said the government promised them that the situation would be regularized starting next month. In July, the service will again increase each month, adjusted according to an index of estimated future inflation, which the Ministry of Economy has not yet defined.
“No one likes to sign an agreement and then have it not fulfilled, but given the situation and what the Government did when updating the rates, for us it was an achievement. It is understandable what was done afterwards. They said that they are going to come with the new update proposal and the effect on the ballots will be minimal, if inflation tends to 3 or 4% monthly. Let us remember that before rate adjustments were semiannual, but inflation was much lower. The expectation is to have lower inflation,” Sardi said.
Last week, Rodríguez Chirillo presented to the businessmen at the Petroleum Club lunch the initiative to advance with the construction of the second section of the Néstor Kirchner gas pipeline, which would link Salliqueló (Buenos Aires) with San Jerónimo (Santa Fe). The project would allow doubling the gas transportation capacity to 40 million m3/d from Vaca Muerta to the Litoral, after making an investment of US$2,554 million. However, the Government was open to other private initiatives.
In this context, TGS presented the project that has two stages. Firstly, the design to expand the transportation capacity using the pipeline of the first section of the Néstor Kirchner gas pipeline, which goes fromTrayén to Saliquelló. The company estimated the cost of this work at US$500 million, and includes the additional installation of four compressor plants to expand transportation capacity by 14 million m3/d (from 21 million to 35 million).
The second part of the project involves carrying out complementary works to the pipeline that extends from Salliqueló to Mercedes and which is under the license of TGS. This means installing two additional compressor plants and building a 20 km loop (similar to a bypass) to the already built section, which would require an additional investment of US$200 million.
The total project is divided into two works because they would be carried out under two different regulatory frameworks. For the first part, the Government should call a public works tender, which would be based on the proposal presented by TGS, but which could include changes.
Once the tender specifications are published, in which other local and international companies could participate, the work would be awarded to whoever offers the best proposal and the partial granting of the transportation concession for the first section of the Néstor Kirchner gas pipeline would be granted. At the moment, the total concession is held by the state company Energía Argentina (Enarsa), which charges a transportation rate of US$0.91 per million BTU (English measurement used in the sector). According to TGS calculations, the new work would imply an additional rate of US$0.60 per million BTU to increase transport capacity, thus reducing the total cost per molecule.
For the second part of the work, a public tender would not be necessary, but rather it would be built under the framework of a regulated gas transportation service.
Source: https://www.lanacion.com.ar/ |
