Vaca Muerta’s potential as a gas export to the region finds its main obstacle in the lack of transportation infrastructure. To achieve the desire to bring consistent, long-term volumes to Brazil, Argentina needs to build A major business with an estimated investment exceeding 2000 million US dollarsAccording to the plan that accelerates the TGN bus.
The infrastructure project being analyzed seeks to respond to the growing demand at the local and regional levels. The most ambitious plan that TGN is evaluating consists of the construction of a new gas pipeline that will be connected Neuquén with southern Cordoba Province. This line will be connected to the existing transportation system, allowing gas to be filled from Vaca Muerta to the center of the country, and from there abroad.
The size of the project depends on the volume intended to be transported, but this is expected To reach a production capacity of 20 million cubic meters per day, the investment will amount to approximately 2000 million US dollars.
This new pipeline is a replacement for the already saturated pipelines of the Perito Moreno and Centro Oeste Gasducto, and will serve From Vaca Muerta to the knot formed in La CarlotaIn Cordoba, Which allows access via the recently built integrated federal gas pipeline with the northern part of the country.
From then on, when the northern gas pipeline is properly supplied (currently limited to 15 million cubic meters per day, which barely meets the demand of the seven northern provinces), it will be necessary to make a decision The increase in its capacity, and the route that communication with Brazil will eventually take.
Exporting gas to the region
Despite this outstanding panorama of infrastructure, the country and Producing companies currently operate all gas pipelines designated for export Except for the connection with Uruguay. Thus, Argentine gas reaches the city of Metanx in Chile, to the Concepcion region, the Santiago region and northern Chile, to Brazil via Bolivia, and to Uruguay via the Cruz del Sur gas channel.
That is, which pipelines had to be closed at some point due to various circumstances, Today they are all open and workingThis in itself is good news for the regime.
However, TGN is also considering Lower volume scenarios Compared to the original project (15 or 10 mm3/day) to ensure flexibility and significantly reduce the amount of capital required. The strategic focus of the initiative is Brazil’s interest in diversifying its energy matrix and strengthening its industry with more economical fuels.
Which is that Brazil, especially the south of that country, Bolivia loses out as a traditional supplier Through increasing reliance on associated gas, the Vaca Muerta Basin has become very attractive as a stable, long-term resource. Currently, Argentina already exports seasonal quantities to Brazil, but the goal is to reach fixed contracts that require new infrastructure.
from At the end of October, gas exports resumed to the main regional trading partner, which exceeds 300 thousand square meters per day, which is far below the potential demand of at least 15 million cubic meters per day or more, according to different analysts from both countries.
How to finance a $2 billion business
However, the key to financing the work does not depend solely on Brazilian demand. TGN explains that the “trigger” for the construction of the new gas pipeline will most likely be Domestic demand, especially related to thermal power generation.
This requires that Electrical regulatory authorities are adapting the rules So that generators feel comfortable purchasing fixed transmission capacity for at least 15 years.
Regarding export methods, The gas industry identifies three potential routes, the most geographically logical of which is the one through Bolivia. But this path is hampered by what are considered “excessive price requests.” By the neighboring country to use its pipeline.
To explain this disparity, it was stated that Bolivia needs US$1.9 per million British thermal units. Pipeline transportation with more than 25 yearswhen the Argentine transfer rate for a similar distance is between USD 0.40 and USD 0.50, this means Four times less.
Paraguay is a player covered in gas
In the face of the Bolivian obstacle, there are other options, namely southern Brazil, Closure of a ring of gas pipelines between Uruguayana and Porto AlegreOr via Paraguay. This last alternative, in addition to being a transit route, implies Paraguay’s interest in consuming gas for thermal power generation and fertilizer plants in the coming yearsThis is a possibility that Argentina must take into account.
Any of these options It will require discussing new investments with potential partners From neighboring countries, with the exception of the Bolivian variant which already has a network of operating and consuming gas pipelines, which since March has become the Vaca Muerta gas export route.
Despite regulatory and cost challenges, the industry is showing moderate optimism and a sense of urgency. It is estimated that once local generators are in a position to purchase fixed transmission capacity, The project could start in six to eight months.
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