The Government advanced in the steps for the construction of the President Néstor Kirchner Gas Pipeline with the constitution of the Argentine Gas Development Fund (Fondesgas), which will have as a priority the execution of the work that will connect the area of unconventional deposits of Vaca Muerta, in the province of Neuquén, with different points of those of Río NegroLa Pampa, Buenos Aires and Santa Fe.
The measure was formalized through the necessity and urgency decree (DNU) 76/2022, signed last Friday by President Alberto Fernández in an agreement of ministers and published today in the Official Gazette.
The DNU is complemented by resolution 67/2022 of the Secretary of Energy that declared the gas pipeline “of National Public Interest” and with its publication paves the way for the beginning of the bidding processes for the works, a task delegated to the company Integración Energética Argentina Sociedad Anónima (IEASA, formerly Enarsa), which was granted a 35-year concession.
The Fondesgas It will be constituted mainly with the resources from the Solidarity and Extraordinary Contributionwith regard to assets located abroad (article 5 of Law 27,605) and other funds from credit operations, income or that are allocated annually in the National Budget, among others.
the pipeline
The President Néstor Kirchner Gas Pipeline is considered a “core component of the set of works aimed at expanding the capacity of the transport and gas system and optimizing its use”due to the fact that currently the transport capacity of the fluid produced in Vaca Muerta is on the verge of saturation, which also prevents a sustained increase in gas production in the area.
“Currently the transport capacity of the three gas pipelines that connect the Neuquén Basin with the large centers of consumption is practically saturatedimplying that gas producers in said basin cannot continue to increase their production beyond an additional 5 million to 6 million cubic meters per day, precisely due to the impossibility of evacuating it,” the DNU stated.
In addition to the necessary supply of gas to residential, industrial and commercial users, the work will be It will be of fundamental importance from the fiscal point of view and from the energy trade balancedue to the fact that a large part of the economic subsidies are allocated to the importation of fuel, with a much more expensive price than that produced locally.
In this regard, both in the recitals of the DNU and in those of the Energy resolution, it was highlighted that, once completed, the work will represent a saving to the State of about US$ 1,000 million due to the substitution of importswith a net effect on the energy trade balance of around US$ 2,500 million per year, “considering the decrease in imports and the increase in export volumes.”
Likewise, it was specified that “the reinforcement of the gas transport system in the Pampean region will enable the development of numerous investments in petrochemical activitysuch as the production of urea, methanol, polypropylene, ethylene, among others, and will substantially contribute to adding value to hydrocarbon resources”.
how it will work
The venture will connect with another gas pipeline to be built, the Mercedes-Cardales, and together will allow “optimizing the possibilities of replacing imported natural gaseither from regasification terminals or injected at the head of the North Gas Pipeline from the Plurinational State of Bolivia, as well as will tend to significantly reduce the consumption of alternative fuels to natural gas in electricity generation”, it was detailed in this regard.
The signing had been anticipated last week by the Secretary of Energy, Darío Martínez, who had previously ordered, through Resolution 67, the creation of the National Production Transport.Ar Gas Pipeline System, to build through IEASA the Néstor Kirchner Gas Pipeline and a series of complementary works and expansion of the current system.
The first stage of the Gas Pipeline -whose completion was long awaited by the operators in order to increase their natural gas production- It consists of an investment of US$ 1,566 million and its main work is the section of Treatyén to Salliqueló, that is, from Neuquén to the central west of the province of Buenos Aires.
A second stage provides for the continuity of the work to the south of Santa Fewhich would open the possibility of reaching the country’s large urban and industrial centers with a greater volume of Vaca Muerta gas, as well as linking with the Northeast gas pipeline (GNEA) to supply the provinces of the region that are currently isolated from the system.
