Argentina and Brazil sign energy exchange agreement until 2025
The governments of Argentina and Brazil signed an updated Memorandum of Energy Exchange that will be in force until 2025 to regulate the supply of electricity and gas between their respective countries.
“We reached an agreement to regulate the exchange of electric power and gas between both countries,” announced on social networks the Argentine ambassador to Brazil, Daniel Scioli.
Under the new agreement, which will be automatically renewed every four years, Argentina will continue to supply electricity and gas to Brazil.
For this year, Brazil guaranteed to transfer to the neighboring nation the maximum capacity of electric energy supply for US$ 250 million.
In 2021, the Argentine government exported US$1 billion in electric energy to the neighboring country, while this year, Argentina sold US$350 million in gas of different types to Brazil.
The agreement, signed after three negotiation meetings held in October and November, updates a previous one that was about to expire.
The working rounds also involved the state-owned company Energía Argentina (Enarsa), the Ministry of Economy and Foreign Affairs of both countries, and the Brazilian National Bank for Economic and Social Development (Bandes).
Scioli, for his part, stated that the agreement allows the use of the Bilateral System of Payments in Local Currencies.
The Argentine President, Alberto Fernández, later received the Secretary of Energy and the Ambassador to Brazil at the Casa Rosada, the seat of government.
The official informed him that Brazil’s contribution last winter “in terms of electricity imports to Argentina was key to enable savings and to allow Argentina to sustain its energy demand at a competitive price”.
Vaca Muerta
Together with Scioli, the secretary informed the Argentine ruler about the status of negotiations to obtain financing for the following stages of the President Néstor Kirchner Gas Pipeline for the development of the Vaca Muerta rock formation in the province of Neuquén (southwest), which holds the world’s second-largest unconventional gas reserve and the fourth largest oil reserve.
The Argentine government expects the country to become a net gas exporter once the pipeline is completed, so the project would have “the most important binational impact in history”.
Thanks to Vaca Muerta, oil production in Neuquén reached in September the highest volume since 1999, reaching 291,672 barrels per day.
In June, the national government put out to tender the construction of the Vaca Muerta gas pipeline, expecting it to be operational by the winter of 2023.
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