Argentina already takes for granted US$689 million from Brazilian development bank BNDES for gas pipeline

Even before Lula da Silva assumes the presidency, the Energy Secretary of Argentina, Flavia Royon, is already sure that US$689 million dollars from the National Bank for Economic and Social Development (BNDES) will be sent for the supposed construction of the second stretch of the Néstor Kirchner gas pipeline.

The work is about 600 kilometers long and runs from San Jerónimo to the province of Santa Fé.

Still, under the command of the Bolsonaro government, the BNDES issued a note informing that there is no forecast to release the financing until the end of the year.

“We started the construction of the first stretch of the Presidente Néstor Kirchner gas pipeline, which will increase production from Vaca Muerta and expand the gas transportation capacity by 30% and allow us to save US$2 billion in imports.”

“In addition, we have obtained financing of US$689 million from the National Bank for Economic and Social Development and another US$540 million from the CAF (Development Bank of Latin America) for its second stretch,” assured Flavia Royon to the Vacamuertanews portal on the Dec. 12.

The president of Argentina, Alberto Fernández, was the first head of state to meet with former President Lula da Silva after the results of the second round of the elections were announced.

Fernández’s haste to speak personally with Lula was interpreted by analysts as a cry for help to save the Argentine economy, which could face 100% inflation by 2023.

NÉSTOR KIRCHNER GAS PIPELINE

Insufficient transportation infrastructure has held back oil and gas production and investment in Vaca Muerta, the world’s second-largest shale fields.

The Vaca Muerta project, proposed in 2018 as a 1040 km pipeline to be constructed in two phases, would bring gas from the Vaca Muerta shale fields to Argentina’s main population centers in and around Buenos Aires.

The initial phase of the 1040-kilometer pipeline would run from Tratayén in the Vaca Muerta shale fields to TGS’s Saturno compression plant near Salliqueló (Buenos Aires province), passing through additional compressor stations at Casa de Piedra, Chacharramendi and Doblas.

The pipeline’s second phase, originally proposed to extend from Salliqueló to San Nicolás de los Arroyos in Buenos Aires province, is now projected to extend from Salliqueló to San Jerónimo in Santa Fe province, passing through compressor stations at Las Toscas and La Angelita.

An additional section of the pipeline linking San Jerónimo, Argentina, with Uruguaiana, Brazil, has been proposed as a way to export large volumes of Vaca Muerta gas to Brazil.

Interest in an Argentina-Brazil gas pipeline dates back to the early 2000s.

In 2009, Brazil’s government officially approved the development of the Uruguaiana-Porto Alegre Gas Pipeline on the Brazilian side of the border, intending to import natural gas from Argentina, but the project was never completed due to Argentina’s decision to allocate its gas reserves for domestic consumption rather than export.

However, the project has regained momentum with the discovery of Vaca Muerta’s extensive unconventional natural gas reserves.

The recent impetus for the project has been driven by Brazil’s desire for less expensive natural gas and Argentina’s interest in finding new markets for Vaca Muerta’s energy assets.

According to a 2020 statement by Argentina’s ambassador to Brazil, Daniel Scioli, several parties have expressed interest in developing the project, including private Argentine construction companies, Argentina’s two largest oil companies, and an international development agency.

With information from BSM