In Argentina, Transportadora de Gas del Sur (TGS) has announced a significant investment following the Senate’s approval of the Large Investment Incentive Regime (RIGI) contained in the Bases Law. This marks a major shift for TGS, as it hasn’t made a significant investment in nearly 20 years. The company will invest its own funds, as well as those required for network security, in response to the government’s rate increases at the beginning of 2024.
TGS directors presented two proposals to the Ministry of Economy and the Secretariat of Energy totaling $700 million. These investments are expected to result in commercial savings in imports of $700 million and fiscal savings of $500 million for Argentina. The first proposal involves expanding the President Néstor Kirchner Gas Pipeline (GPNK I) by 14 million m3 per day, from Trayén to the Saturno plant in Salliqueló. The estimated cost of this project is $500 million and will be open to private competition.
The second proposal includes investments of $200 million in compressor plants near consumption areas in Buenos Aires and Greater Buenos Aires. Additionally, TGS plans to invest in Neuba II gas pipeline, which is expected to create 10,000 jobs directly and indirectly. This investment is predicted to boost natural gas production in Vaca Muerta by about $400 million and generate another $450 million in the midstream sector. These projects could potentially reduce Argentina’s reliance on expensive imports of liquid fuels and natural gas.
If approved, these projects must undergo an approval process by the government and a tender process based on price before work can begin before winter 26th. The expansion of TGS’s gas pipeline system is viewed as a crucial step towards enhancing Argentina’s energy security and reducing dependency on costly imports.
