Key Vaca Muerta Gas Pipeline Project Approved by Argentina Government
(Reuters) - Argentina's government has approved a key $500 million private sector gas pipeline expansion project, the energy secretariat said on Monday, a key signal of state support to boost transport capacity as it ramps up domestic energy production.
The project, proposed by major private local operator Transportadora de Gas del Sur (TGS), would expand transport capacity from the huge Vaca Muerta shale region to Buenos Aires province. The project will be tendered by the government.
The project is a rare attempt by the private sector to take the lead expanding Argentina's gas pipeline network, which has traditionally been led by the state. Argentina, under new libertarian President Javier Milei, is luring more private investment to overturn an energy deficit and export more gas.
TGS originally presented the plan in June and said its proposal, which is subject to it winning the tender, was to install six compressor tube sets at four plants. That would increase the amount of gas the existing pipeline could carry.
"The initiative includes the expansion of the Perito Moreno gas pipeline between Tratayén (Neuquén) and Salliqueló (Buenos Aires) and work on four compressor plants," the energy secretariat said in a statement.
"This will allow the company to add 14 million cubic meters of gas transportation capacity per day to the 21 million it already transports, so reaching 35 million cubic meters along the entire route," it added.
Argentina is pushing to rev up output from Vaca Muerta, the world's second largest shale gas formation, and to build up the infrastructure to supply domestic demand and eventually allow liquefied natural gas (LNG) exports.
TGS, if successful in the tender, has also pledged a further $200 million investment in a second phase to build 20 kilometers of new pipeline and add more compression capacity in an area that TGS already has under concession.
"We understand that the tender should be launched in the next few days," TGS CEO Oscar Sardi said on Monday at an event in Buenos Aires, adding the complex installation of compressor plants required almost two years to get into operation.
"We are playing against the clock," he added.
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