Govts. Sign Accord to Finance US$200mn Pipeline Expansion
BNAmericas
Argentina's President Néstor Kirchner signed a letter of intent on Wednesday with Brazil's government to finance the US$200mn expansion of local transporter TGS's San Martín pipeline in southern Argentina, the president's press office said in a statement.
The expansion is designed to add some 3 million cubic meters a day (mcm/d) of capacity to the gas transport system, which is badly in need of new infrastructure to meet higher demand.
Brazil's federal energy company Petrobras (NYSE: PBR) will carry out the expansion though its TGS unit, and Brazil's national development bank BNDES will finance some US$142mn of the project costs.
Construction of the pipeline is expected to start in January and commercial operations in July 2005.
The agreement was reached after intensive negotiations between the planning ministry, gas regulator Enargas, the secretary of public works and energy, federally owned bank Banco Nación and BNDES, Argentina's planning minister Julio de Vido said.
Argentina's government reportedly plans to create a surcharge on natural gas sales to large users to finance part of the costs. The surcharge would not affect end consumers since it would be levied on large gas users such as power generators, gas compressors and industrial clients.
The agreement with Brazil comes after Kirchner signed an accord with Bolivia's President Carlos Mesa in October to import some 20mcm/d of gas from 2006. With the two agreements taken together, "we are guaranteeing predictability in the Argentine energy equation, fundamentally in the production of gas which is one of our basic supplies, for the next 5-6 years," de Vido said.
Argentina's gas crisis stems from under investment in gas infrastructure and exploration during the last few years due to frozen wellhead prices, which are only gradually beginning to rise.
About Business News Americas: Business News Americas is a multilingual news and business information service that covers the most important original stories in 11 different business sectors throughout Latin America everyday. Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports.
Click here for a Free two week trial to our Latin America Oil & Gas information service.
The expansion is designed to add some 3 million cubic meters a day (mcm/d) of capacity to the gas transport system, which is badly in need of new infrastructure to meet higher demand.
Brazil's federal energy company Petrobras (NYSE: PBR) will carry out the expansion though its TGS unit, and Brazil's national development bank BNDES will finance some US$142mn of the project costs.
Construction of the pipeline is expected to start in January and commercial operations in July 2005.
The agreement was reached after intensive negotiations between the planning ministry, gas regulator Enargas, the secretary of public works and energy, federally owned bank Banco Nación and BNDES, Argentina's planning minister Julio de Vido said.
Argentina's government reportedly plans to create a surcharge on natural gas sales to large users to finance part of the costs. The surcharge would not affect end consumers since it would be levied on large gas users such as power generators, gas compressors and industrial clients.
The agreement with Brazil comes after Kirchner signed an accord with Bolivia's President Carlos Mesa in October to import some 20mcm/d of gas from 2006. With the two agreements taken together, "we are guaranteeing predictability in the Argentine energy equation, fundamentally in the production of gas which is one of our basic supplies, for the next 5-6 years," de Vido said.
Argentina's gas crisis stems from under investment in gas infrastructure and exploration during the last few years due to frozen wellhead prices, which are only gradually beginning to rise.
About Business News Americas: Business News Americas is a multilingual news and business information service that covers the most important original stories in 11 different business sectors throughout Latin America everyday. Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports.
Click here for a Free two week trial to our Latin America Oil & Gas information service.
Most Popular Articles
- Brand Finance Ranks Most Valuable, Strongest Oil and Gas Brands
- Canacol Makes New Gas Discovery in Colombia's Magdalena Basin
- FortisBC Denies Gas Greenwashing as Suit Awaits
- Oil and Gas Executives Predict WTI Oil Price
- Egypt Plans to Meet Summer Fuel Needs with LNG Imports
- Credit Agricole Helps NGP Secure Funds for Fishery-Solar Projects in Taiwan
- Centcom Outlines Latest Red Sea Moves
- Industry Protests Proposed Methane Fee Guidelines for O&G Facilities in US
- Exxon, Cnooc Merge Guyana Arbitration Claims Against Chevron
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil Demand Outpaces Expectations, Testing Calculus on Peak Crude
- House Passes Protecting American Energy Production Act
- TotalEnergies Restarts Production in Denmark's Biggest Gas Field
- Blockchain Demands Attention in Oil and Gas
- Republican Lawmakers Say IEA Has Abandoned Energy Security Mission
- USA Oil and Gas Job Figures Jump
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Houthis Warn Saudi Arabia of Retaliation If It Backs USA Attacks
- Summer Pump Prices Set to Hit $4 a Gallon Just as Americans Hit the Road
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Equinor Makes Discovery in North Sea
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension