Buenos Aires Creates New Gas Distributor

Buenos Aires province government has published a decree creating a gas distribution company called Buenos Aires Gas, in which it owns 51%, newspaper La Nacion reported.

Public service cooperatives own 39% and municipalities the remaining 10%. The idea of the company is to expand the province's natural gas network and connect new clients who are unable to receive service from private distributor Camuzzi Gas Pampeana, an industry source told BNamericas.

Buenos Aires province governor Felipe Sola announced in January that there are about 196,000 possible customers in the province who could save money by using natural gas instead of bottled gas. Families could pay the 620 peso (today US$210) cost of a natural gas connection with the money they would save in one winter from using natural gas instead of bottled gas, he said.

The decision to create Buenos Aires Gas is based on Article 42 of a 1994 constitutional amendment that expresses the rights of consumers to receive certain basic public services, including natural gas supply. Article 1 of the decree calls for the constitution of a company to "assume the public service of gas distribution in all its diverse forms," which include natural gas at different pressures, vehicular natural gas (VNG), liquefied natural gas (LNG) and liquefied petroleum gas (LPG).

Although the new company has been created, it remains to be seen where the gas will come from as the country's gas transport network is already saturated, the source said.

Camuzzi Gas Pampeana does not have the gas to connect new clients because of transport restrictions and is focusing on guaranteeing gas supply to its existing clients. "The problem is that there is a large quantity of clients who want to connect to the network because since the crisis in 2002 people are coming back to natural gas because it's a fuel seven times cheaper [than alternatives]," the source said.

Gas transporter TGS, which supplies gas to Camuzzi and other distributors in central and southern Argentina, and fellow transporter TGN are both running out of space in their pipelines, the source said. "This is a problem for the whole country - the physical capacity of their high pressure pipelines is basically saturated."

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