Argentina Secures Financing to Expand Gas Pipelines

Argentina has secured US$150 million in financing from CAF, a multilateral development bank in Latin America, to expand its natural gas transport capacity and connect more homes to the country’s gas grid in hopes of reducing consumption of more expensive alternatives, such as liquid petroleum gas.

With the financing, the country will proceed with expanding the backbone pipelines in the north and south of the country, and increasing the delivery potential of a line that brings in supplies from Bolivia.

Luis Caputo, Argentina’s National Minister of Finance, said the credit – and the country’s relationship with CAF – was important for the growth of the country, especially when the money goes toward infrastructure, “which is a key lever for development.”

Argentina will need more pipeline capacity as production recovers from a 10-year low of 4,015 mcf/d in 2014 and a series of new projects to develop Vaca Muerta, the country’s biggest shale play, brings more gas supplies to market. According to the country’s government, gas production, which currently meets 50% of national energy needs, should reach 6,533 mcf/d in 2025.

In May, the government called a tender for projects to expand three pipelines, with spending estimated at US$168 million.

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