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In Argentina, large gas project in Vaca Muerta canceled concerns about large evasion of investments and companies in the country

Written by Paulo Nogueira
Published 31/12/2020 às 07:31
Argentina Vaca Muerta Gas covid 19 investments
Bandurria Sur block in Vaca Muerta (Photo: YPF)

The covid-19 ended up aggravating the economic crisis in Argentina, insecurities of economic and even social policies, helped to cause the shelving of construction of gas transport in Vaca Muerta

Argentina's energy department has decided to shelve a long-standing project to build a pipeline from the Vaca Muerta unconventional hydrocarbon formation to the northeast of the country, known as the central gas transportation system.

According to an announcement in the official gazette, the department decided that the project was conceived in a completely different setting and could not be adapted to suit the country's current circumstances.

One of the downturn in production due to the COVID-19 pandemic, as well as the Gas Plan 4 stimulus for natural gas production, would require a reassessment of options for transporting natural gas into the country to ensure that local production and LNG imports can be transported for Argentina's largest population centers, the department said.

New gas route alternatives will be studied

Authorities therefore decided to cancel a tender that was suspended in March and was scheduled to go ahead this month.

Instead, the department said it will direct its hydrocarbons unit to conduct a legal and technical assessment to evaluate new pipeline alternatives, including expanding existing transport capacity, to bring Vaca Muerta gas to the city of Buenos Aires.

The central gas transport system, also known as the Vaca Muerta gas pipeline, was conceived at a time before the fall in the international price of oil, when Argentina's production was constantly increasing due to the resources of significant shale by Dead Cow.

It involved the construction of two gas pipeline sections, the first connecting the town of Tratayén, near Vaca Muerta, to Salliqueló, near the port city of Bahía Blanca, with 470 km of extension and requiring US$ 800 million in investments for a capacity initial 15 Mm3 / d.

In the future, Vaca Muerta may be connected to the south of the country

The second 570 km stretch would connect Salliqueló with San Nicolás, a small town between Buenos Aires and Rosario on the banks of the River Plate and would need US$1,2 billion for an initial capacity of 20Mm3/d.

Argentina's gas transportation plans also include the construction of a gas pipeline linking Vaca Muerta to the south of Brazil.

The $1,2 billion, 600 km pipeline project that would reach Uruguaiana and Porto Alegre has been discussed by Argentine and Brazilian authorities, although no definitive agreement has been reached.

Paulo Nogueira

With a technical background, I worked in the offshore oil and gas market for a few years. Today, my team and I are dedicated to bringing information from the Brazilian energy sector and the world, always with credible and up-to-date sources.

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