Argentina's Enarsa receives bids from five groups for natural gas pipeline

Argentinian state-owned energy company Enarsa said July 8 it received bids from five groups to build the first stage of a pipeline considered vital for boosting natural gas production in the Vaca Muerta shale play to meet domestic demand, reduce imports and eventually export supplies globally.

The bids came in from the local construction companies BTU and ESUCO, as well as a consortium of the two building firms Contreras Hermanos and Víctor Contreras, Enarsa said in a statement. The other two bidders were Argentinian gas pipeline operator Transportadora de Gas del Sur and Argentinian-Italian manufacturing group Techint in partnership with the local builder SACDE.

A winner will be announced in the near term, Enarsa said.

The contract is for the first leg of the President Néstor Kirchner pipeline, which will run 573 km (356 miles) from Tratayén in Neuquén province at the heart of Vaca Muerta to Salliqueló in Buenos Aires province. The project will include complementary works to expand the capacity and reach of existing pipelines, taking to 680 km the total amount of pipes to be installed in the project's first stage.

The first stage will add 13 million cu m/d of capacity in 2023 and another 11 million in 2024, while the second stage will take the line to San Jerónimo, Santa Fe province, in the middle of the country, according to Enarsa. That will expand the total capacity to 44 million cu m/d in 2025, boosting Argentina's total installed gas transport capacity by 25%.

In June, Enarsa awarded a contract to Tenaris Siat, a unit of Techint, to supply 656 km of steel pipes for the first stage of the project.

"This project will position Argentina on a path of greater energy security," Energy Secretary Darío Martínez said.

Argentina produces about 127 million cu m/d of gas and imports supplies from Bolivia and off the global LNG market to meet demand, which averages 140 million cu m/d and peaks at 180 million cu m/d in winter. Gas imports rose 14% to 22.6 million cu m/d in 2021 from 19.9 million cu m/d in 2020, according to Energy Secretariat data.

Vaca Muerta, one of the world's largest shale plays, has potential to not only make Argentina self-sufficient in gas supplies but a net exporter. In April, the government said it was considering a $10 billion project to produce and export LNG from as soon as 2026 to take advantage of Vaca Muerta's large resources to meet an expected rise in global demand for gas during the energy transition to net-zero carbon emissions by 2050.

The new pipeline will help expand the takeaway capacity from Vaca Muerta in northern Patagonia, which this year maxed out as production in Vaca Muerta and the surrounding Neuquén basin has surged to 80 million cu m/d from 53 million cu m/d in 2012, when the shale play came into production, according to data from the Neuquén Energy Ministry.

Agustín Gerez, the president of Enarsa, said the new pipeline "will allow us to substitute gas imports and export to the region and the world."