Argentina’s Energy Secretariat has suspended the construction of a major pipeline to transport natural gas from Vaca Muerta, Kallanish Energy learns.
Deputy hydrocarbons secretary Juan José Carbajales said the project has been shelved indefinitely and that the priority for the government is to finish a series of unfinished pipelines left by the previous administration.
“There are no other alternative projects that we are studying,” Carbajales told Argentina’s largest newspaper, Clarín. “When we began to analyze the Vaca Muerta gas pipeline project, we found anomalies such as the lacking of feasibility, production and consumption, costs studies; and about how it was going to be financed and who was going to pay for production and how,” he added.
The gas pipeline was proposed through a public-private financing scheme that didn’t materialize as it happened with other works of the past government. It was estimated to cost $2 billion and transport 60 million cubic meters per day (Mmcm/d) of gas. Commissioning was planned for 2024.
Carbajares said the focus, for now, is to finish pipelines and enable the gas to meet demand, particularly in the next winter season.
According to the Clarín, there could be an even more ambitious project in the making – a pipeline from Vaca Muerta to Porto Alegre, Brazil. The so-called Gasoducto Federal AF-CK 2020, would be built in three stages.
The first section would run from Tratayen, Neuquén province, to San Jeronimo, Santa Fe province. The second section would run from San Jeronimo to Uruguaiana, the Brazilian city bordering Argentina. Then, the final section would connect to Porto Alegre, the capital of Rio Grande do Sul state. The $5 billion pipeline system could export 100 Mmcm/d of Vaca Muerta gas to Brazil.
Despite holding world-class unconventional resources, Argentina is struggling to develop the assets and monetize the gas. Macroeconomic conditions and the Covid-19 pandemic have put over 20,000 jobs on hold in the Neuquén basin, where the activity is estimated to have dropped by around 65-70%.
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