Page 11 - LatAmOil Week 45 2021

LatAmOil ARGENTINA LatAmOil

Argentina will use proceeds of electric

power exports to fund gas pipeline

ARGENTINA’S Energy Secretariat has indi-
cated that it expects to use the proceeds of
electricity exports to Brazil to finance several
major infrastructure projects that will facili-
tate the development of the Vaca Muerta shale
formation.
News of these plans emerged last week, when
the Energy Secretariat adopted a new ruling
governing the use of export revenues. Under this
ruling, known as Resolution 1037, the govern-
ment department will be able to cover the cost
of building new energy infrastructure networks.
These networks will include a new natural
gas pipeline and high-voltage power transmis-
sion lines that will serve the Vaca Muerta fields.
The pipeline, which will follow a route from
Vaca Muerta to Salliqueló to San Jerónimo, is The Vaca Muerta gas pipeline will cost $1.8bn to build (Photo: Novonor)
expected to carry a price tag of $1.8bn. Mean-
while, the transmission lines will be built within to use these funds to supplement the proceeds
the framework of Argentina’s Federal Plan for of the so-called “wealth tax,” which generates
Electric Transportation Works, which will about $500mn per year, the sources said.
require about $3bn worth of investments. Mercopress also noted that electricity
Pablo González, the CEO of Argentina’s export earnings would be deposited into a spe-
national oil company (NOC) YPF, pointed out cial separate account. Citing a report from the
last week that the pipeline would help support Argentinian business daily El Cronista, it said
upstream development operations at Vaca that Resolution 1037 had provided for the cre-
Muerta fields. This project is among “the most ation of an export account within the country’s
urgent in the country,” as it will give producers Wholesale Electricity Market Stabilisation Fund
the ability to deliver gas from the shale forma- (MEM). This account will only be able to dis-
tion to consumers in other regions of Argentina, burse funds for energy infrastructure projects,
he explained. the newspaper stated. The first deposits into the
Without the pipeline, Vaca Muerta’s hydro- account will be the proceeds of electricity sales
carbons will be difficult to monetise, he added. to Brazil in September 2021, it added.
“We have the second-largest unconventional gas Argentina is on track to export around $1bn
reserve in the world and the fourth-largest for worth of electric power to Brazil this year. In
[unconventional] oil, in terms of resources,” he September alone, it delivered $258mn worth
was quoted as saying by Mercopress. “What we of power to the neighbouring country, which is
lack is transportation capacity.” experiencing extensive fuel and power deficits.
According to anonymous market sources These shortfalls stem from a ongoing drought
cited by Mercopress, Resolution 1037 is likely to that has prevented Brazilian hydroelectric
generate about $100mn per year in additional power plants (HPPs) from operating at full
revenues. The Energy Secretariat will be able capacity. ™

MoU signed on Rio Negro hydrogen plant

ARGENTINA’S government has reportedly deal last week, saying in a statement that Fortes-
struck an agreement with Fortescue Future cue had pledged to spend more than $8bn on
Industries, an Australian company, on the con- the construction of the facility. He indicated
struction of a green hydrogen plant in Rio Negro that the parties had come to terms on the clean
Province. energy project in Glasgow, on the sidelines of the
President Alberto Fernandez unveiled the UN-sponsored COP 26 climate conference.

Week 45 11•November•2021 www. NEWSBASE .com P11