Argentina knocks on gas producers' doors for pipeline financing -minister

Pan American Energy

03/10/2022 12:00

(Repeats item originally published on Sept 30, no change to
content of story)
    By Marianna Parraga
       HOUSTON, Sept 30 (Reuters) - Argentina is in talks with
the country's natural gas producers over financing for the
second phase of a key pipeline to transport the fuel to
consumption hubs, Neuquen province's energy minister told
Reuters.
    A lack of drilling rigs and transportation from Argentina's
massive Vaca Muerta region, the world's second largest shale gas
reservoir, are creating bottlenecks and stalling the area's
output, which has recently reached historical records. 
    About $2 billion needed for the second phase of the Nestor
Kirchner gasline could be raised by a mix of bank and private
financing. The line's first phase will begin construction later
this year using state funds.
    Negotiators on the second-phase project are exploring
financing using "early purchases of (transportation) capacity,"
Neuquen province's Energy and Natural Resources Minister
Alejandro Monteiro said this week on the sidelines of a Houston
energy conference.
    The federal government is responsible for securing another
portion of the line's financing, he added, possibly through
loans or bonds.
    Companies involved in the talks include YPF  YPFD.BA ,
Tecpetrol, Pluspetrol, Exxon Mobil  XOM.N , Pan American Energy,
Pampa Energia  PAMP.BA , Wintershall Dea and TotalEnergies
 TTEF.PA , the minister said.
    The line's first phase initially will carry 11 million cubic
meters per day (mmcmd) starting in 2023, expanding to 22 mmcmd
in early 2024. 
    State company IEASA has ordered the engineering design for
the second phase, hoping to begin construction in 2024 and put
it into service a year later, Monteiro added.
    "For them (gas producers), the construction of that
infrastructure is a condition to accelerate output," he said.
"There is interest in building it as fast as possible."
    IMPORTER TO EXPORTER
    By the time a contract to buy Bolivian gas expires in 2026,
Argentina expects to have solved its transportation issues to
replace those imports with fuel from Neuquen, which is being
produced at half the price Argentina pays for Bolivian gas. 
    "It makes no sense that Argentina continues importing gas at
$8-9 (per million BTU) if it can produce it at $4 (per million
BTU)," he said.
    Argentina also wants to expand gas sales to Chile. It will
begin exports in October of a fixed seasonal volume of 10 mmcmd
through April to that nation, and aims to sign a supply contract
with Uruguay to regularize exports of another 200,000-300,000
cmd.
    Its goal is gaining energy self-sufficiency and overturning
a trade deficit that costs Argentina billions of dollars per
year, especially in liquefied natural gas (LNG) imports.
    An energy industry bill is expected soon to be submitted to
Congress to regulate companies' access to hard currency as part
of the country's foreign exchange system, while securing
stability for export permits and a framework for LNG projects,
according to Monteiro.
    YPF and Malaysia's Petronas signed an early agreement in
September over unconventional gas output, transportation and
LNG, their second attempt at an alliance.
    "There is a 12-month deadline to green light that LNG
project. The idea is to have the legal framework ready by then,"
the minister said. 
    A separate legislation also plans to encourage investment in
lithium, hydrogen and other forms of green energy in Argentina.
 (Reporting by Marianna Parraga; Editing by Chizu Nomiyama)
 ((marianna.parraga@thomsonreuters.com; +1 713 371 7559; Reuters
Messaging: @mariannaparraga))