Page 8 - LatAmOil Week 31

LatAmOil ARGENTINA LatAmOil
Argentina touts economic benefits of new gas pipeline
ARGENTINA’S Energy Secretary Gustavo Lopetegui said last week that the country was set to reap enormous bene ts from the construc- tion of a new natural gas pipeline linking the Vaca Muerta shale formation to Buenos Aires.
e project will promote economic devel- opment, Lopetegui asserted. “ e pipeline will help us improve the country’s trade balance and increase production from Vaca Muerta, which means more work for Argentines, both in the area and in the entire industrial value chain,” he was quoted as saying by Mercopress.
He also pointed out that the pipeline would help ensure adequate gas supplies to the greater Buenos Aires and Rosario areas, both of which are heavily populated and highly industrialised. “It’s one of the most important infrastructure projects that we have ahead of us,” he said.
Argentina’s government called a tender for the gas pipeline project last month and is due to open all the o ers it receives on September 12. It then hopes to negotiate a contract with the winning bidder quickly enough to complete the
rst section of the link by mid-2021.
e pipeline will follow a 1,040-km route
from Tratayen, a city in Neuquen Province, to Buenos Aires. It is likely to carry a price tag of about $2bn and may eventually be able to pump as much as 40mn cubic metres per day of gas.
e link will be built in two stages: the rst will be 570 km long and will run from Tratayen to Salliquelo, a town in Buenos Aires Province. It will cost about $800mn to build and is due to be nished by the winter of 2021.
e second stage, meanwhile, will run for 470 km between Salliquelo and San Nicolas, another town in Buenos Aires Province. e cost of building this section, which is scheduled to begin operating before the end of 2024, may reach $1.2bn.
Argentinian officials have said that the pipeline will reduce the country’s dependence on imported gas. Cutting the volume of LNG imported via the Escobar terminal could save Argentina up to $240mn per year, according to Economy Ministry estimates™
CHILE
Codelco sells Mejillones LNG stake
Chile’s state-owned mining rm Codelco announced on August 6 that it had sold its stake in the Mejillones LNG terminal to Ameris Capital AGF, a local investment fund. e move comes a er the miner secured enough supply from other sources amid an improvement in Chile’s energy markets. Codelco cited the resumption of imports from neighbouring Argentina, the strengthening of the Chilean electricity grid and a shi towards renewables, which it said meant the company no longer needed to keep a stake in the LNG plant.
“Given that energy supplies to Codelco’s operations in northern Chile are now ensured, the stake had been categorised as a dispensable asset,” Codelco’s CEO, Nelson Pizarro, said in a note to regulators.
Ameris will pay $193.5mn for the 37% stake in the 5.5mn tonne per year (tpy) Mejillones regasi cation terminal. France’s Engie oper- ates the terminal and owns the remaining 63% stake. Ameris said its acquisition was partly nanced by a syndicated loan from the Indus- trial and Commercial Bank of China and the Agricultural Bank of China.
Engie’s predecessor, GDF Suez, partnered with Codelco over 10 years ago to build the Mejillones terminal a er Argentina halted gas
exports to Chile. Shipments from Argentina resumed in late 2018, reducing Chilean demand for LNG imports from Trinidad and Tobago, the US and Equatorial Guinea.
Meanwhile, power tari s have come down in Chile, boosted by additions of around 5,000 MW of renewable generation capacity in the last ve years. e country has also integrated its two main grids, making supply more reliable.
Codelco started seeking a buyer for its stake in the facility in 2017, and said that over 100 companies had expressed interest, with five submitting binding offers. According to the company’s statement, the sale of Mejillones LNG stake will enable the miner to finance part of its project portfolio and focus on copper mining, which is its main priority.
Codelco is intending to overhaul its mines through an ambitious investment programme, valued at over $20bn..
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Week 31 07•August•2019