Argentina inaugurates the Néstor Kirchner gas pipeline for the production of Vaca Muerta shale gas

Argentina’s government officially opened the first section of the Néstor Kirchner Gas Pipeline (GNK) on Sunday.

The pipeline will transport shale gas and oil from the Vaca Muerta field in the south to the province of Buenos Aires in the country’s center, covering a distance of 573 km.

The inauguration ceremony is to take place at the “Saturno” gas plant in Salliqueló, located 520 km southwest of Buenos Aires.

The pipeline will transport shale gas from the town of Tratayén in the heart of the Vaca Muerta field, in the Neuquén province.

The construction of the pipeline, costing US$2.5 billion, was funded without external financing.

According to Flavia Royón, the Secretary of Energy, the pipeline will save US$2 billion in imports this year and is projected to reach US$4.2 billion in savings by 2024.

The second section of the GNK, measuring 467 km, has not yet been tendered but will extend to the town of San Jerónimo in the province of Santa Fe, bordering the north of Buenos Aires province.

Once the pipeline project is completed, Argentina aims to achieve self-sufficiency in gas production and plans to export a significant volume to neighboring countries such as Chile, Brazil, and Uruguay, according to Royón.

The pipeline’s first section was completed in just nine months, which was faster than anticipated, with over 47,700 pipes installed.

The financing for the project’s second stage is being negotiated with Power China.

The development of the Vaca Muerta field is crucial for Argentina to improve its energy trade balance.

In 2022 the country had a negative balance of US$6.6 billion due to diesel oil and Liquefied Natural Gas (LNG) imports.

Royón expects the energy balance to shift from negative to balanced and eventually become positive.

Currently, one-third of the gas produced is used for residential consumption, another for industrial purposes, and the remaining for power generation.

The production of unconventional gas in May 2023 witnessed a year-on-year increase of 10.7%, reaching 57.3 billion cubic meters.

Unconventional oil production also grew 26.2% compared to the previous year.

Vaca Muerta is one of the world’s largest shale gas reserves, accounting for 42% of Argentina’s total gas production, and it also holds significant unconventional oil reserves.