El Paso Increases Gasoducto del Pacifico Stake

US energy company El Paso has increased its stake in the Argentina-Chile Gasoducto del Pacifico pipeline through an asset swap with Argentine natural gas producer and power generator Capex, Capex said in a statement to the Buenos Aires stock market. The deal sees Capex's international operations subsidiary, Capex International Business Company (Cibco), give El Paso its 38.4% stake in Cayman Islands-based Triunion Energy Company, which has a 21.8% share in Gasoducto del Pacifico. El Paso already has a stake in Triunion.

In return, El Paso will give Cibco its 100% share of Argentine gas processing company Servicios El Paso, which operates a gas processing plant in Neuquen province. Cibco will assume about US$5mn debt related to Servicios El Paso's working capital. The trade "is convenient for both parties," a Capex source told BNamericas. "El Paso wants to consolidate its majority holding in Triunion, because sometimes it's better to have a majority stake in a company if you want to do other things in the future," the source said. Cibco considers it better to own a 100% stake in an operating asset like Servicios El Paso rather than a minority stake in Triunion, the source said.

Servicios El Paso is a more attractive asset for Cibco in the short term because its gas processing plant in Neuquen is already operating, whereas the Gasoducto del Pacifico is a long-term investment that is still maturing, the source said. The pipeline connects Neuquen with Chile's Region VIII, and started operations in late 1999.

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