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Argentina Takes Step Forward in Key Vaca Muerta Infrastructure Project
Argentine officials have unveiled the companies vying for the right to construct the 24 MMm3/d Néstor Kirchner pipeline natural gas pipeline.
The companies that presented bids were Btu SA, Esuco SA, Transportadora de Gas del Sur SA, and two consortia: Techint SA-Sacde SA and Contreras Hermanos SA-Víctor Contreras SA. If the offers qualify, economic bids would determine the winner, according to state-owned Energía Argentina, which is in charge of the project.
New Economy Minister Silvina Batakis said “expanding our energy capacity is fundamental to open up the productive activity of the country, and we’re working on this in all sectors.” Batakis took over the job earlier this month.
Global steel manufacturer Tenaris SA has won the contract to provide the steel and weld pipes for the 680 km natural gas pipeline that would connect Argentina’s Vaca Muerta shale formation to capital Buenos Aires and other large consumption areas.
The Néstor Kirchner pipeline has faced some controversy. Production Minister Matías Kulfas alleged there was corruption in the awarding of the first contract, and the minister was asked to resign over the matter. In early July, former Economy Minister Martín Guzmán also resigned. The Energy Secretariat is under the charge of the Economy Ministry.
The project would expand the capacity of the country’s natural gas transport network by 25% and enable continued development of the Vaca Muerta in the Neuquén Basin.
The project “will mark the path forward for our country for the next 25 years,” said Energía Argentina CEO Agustín Gerez. More information on the tender can be found here in Spanish.
The news comes as production from Vaca Muerta continues to jump. In May, overall natural gas production in Argentina rose by 12% to 136 MMm3/d, according to the country’s Energy Secretariat. Driven by Vaca Muerta, gas from unconventional sources rose 56% to 76 MMm3/d.
Energy Secretary Darío Martinez said the pipeline, which the government has reported could be online next year, would continue to drive natural gas growth in the country at attractive prices. He also said the pipeline would help to displace imports from Bolivia and via liquefied natural gas.
Vaca Muerta is considered to be the second largest shale resource on earth.
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