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Argentina federal government OKs key Vaca Muerta gas pipeline project

Argentina's federal government has green lit a crucial $500 million economic sector gas pipeline growth task, the energy secretariat said on Monday, a secret signal of state support to increase transportation capacity as it ramps up domestic energy production.

The job, proposed by significant personal local operator Transportadora de Gas del Sur (TGS), would broaden transport capacity from the big Vaca Muerta shale area to Buenos Aires province. The task will hurt by the federal government.

The task is an unusual attempt by the private sector to take the lead broadening Argentina's gas pipeline network, which has actually generally been led by the state. Argentina, under brand-new libertarian President Javier Milei, is tempting more private financial investment to reverse an energy deficit and export more gas.

TGS originally presented the strategy in June and stated its proposition, which undergoes it winning the tender, was to install six compressor tube sets at 4 plants. That would increase the quantity of gas the existing pipeline might carry.

The initiative consists of the expansion of the Perito Moreno gas pipeline in between Tratayén (Neuquén) and Salliqueló ( Buenos Aires) and work on 4 compressor plants, the energy secretariat stated in a declaration.

This will allow the company to add 14 million cubic meters of gas transport capacity each day to the 21 million it currently transfers, so reaching 35 million cubic meters along the whole path, it added.

Argentina is pressing to rev up output from Vaca Muerta, the world's 2nd biggest shale gas formation, and to build up the infrastructure to supply domestic need and ultimately allow liquefied gas (LNG) exports.

TGS, if successful in the tender, has actually also pledged a. more $200 million financial investment in a 2nd phase to construct 20. kilometers of brand-new pipeline and add more compression capacity in. an area that TGS currently has under concession.

We comprehend that the tender must be introduced in the. next few days, TGS CEO Oscar Sardi stated on Monday at an occasion. in Buenos Aires, adding the complex installation of compressor. plants needed almost two years to enter into operation.

We are playing against the clock, he included.

(source: Reuters)