Argentina Inks Deal to Build Gas Pipeline From Bolivia to Salta

BUENOS AIRES (Dow Jones Newswires), Aug. 10, 2010

The Argentine government signed a deal Monday to build a pipeline to carry up to 27 million cubic meters a day of natural gas from Bolivia to the northern province of Salta.

The 32-kilometer pipeline will cost about $47 million and should be completed in May 2011, Argentina's Planning Ministry said in a statement.

The pipeline is a key aspect of the government's plan to invest $2.75 billion to build a 4,144-kilometer pipeline network in northeastern Argentina.

The project, known here as GNEA, will provide natural gas to more than 1.5 million people living in 163 residential areas in the provinces of Chaco, Corrientes, Formosa, Misiones, Santiago del Estero and parts of northern Santa Fe.

The government says the GNEA project will take three years to finish, although it's unclear if a completion date has been set or when that might be.

"Starting in the winter of 2011 we'll be able to bring in 7.7 million cubic meters a day" through this pipeline," Planning Minister Julio De Vido said in a speech. "Today we're at six million during days of peak demand."

The pipeline will be transporting 11.6 million cubic meters by the winter of 2012, 13.5 million a year after that and 27 million cubic meters a day by 2015, De Vido said.

Demand for natural gas and electricity has hit record levels this winter as a booming economy and cold weather combine to put pressure on the supply of electricity and gas. Amid a shortfall of gas, the government has been rationing natural gas to hundreds of industrial companies as it seeks to ensure supplies to households.

But De Vido told Dow Jones Newswires Monday that there will be no trouble meeting demand for electricity this season.

"I can assure you that the national energy system is capable of satisfying demand for the rest of the winter," he said.

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