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Argentina to launch tender for Vaca Muerta oil and gas supply train in May: governor

  • Author
  • Charles Newbery
  • Editor
  • Bob Matyi
  • Commodity
  • Oil

Buenos Aires — Argentina plans to launch a tender in May for extending a cargo train to the heart of Vaca Muerta, helping to reduce the cost of transporting sand, chemicals and other goods to the shale play in an effort to ramp up oil and natural gas production.

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"At the beginning of May the preliminary information of the tender about the economic and legal format of the Norpatagonico Train will be presented," Omar Gutierrez, the governor of Neuquen, a southwestern province home to the brunt of Vaca Muerta, said Tuesday in comments to LMNeuquen, a newspaper in the province.

A press source for the governor confirmed the comments, but did not provide further information.

The Norpatagonico, or North Patagonia Train, will connect the Atlantic port of Bahia Blanca in Buenos Aires with Anelo, Neuquen a town at the center of current activity in Vaca Muerta.

Producers and drilling companies will be able to use the train to bring fracking proppant, such as sand, and other supplies to the play, and on the return journey it will be loaded with fruit, minerals and other goods for delivery to the port for export or national distribution, Gutierrez said.

The project includes improving and extend an existing railway, which will have capacity to transport around 4 million mt/year of fracking sand.

The train is cheaper and faster than trucking in supplies, according to Ernesto Lopez Anadon, president of the Argentina Oil and Gas Institute, an industry group.

The railway will be needed as fracking activity rises. The Energy Ministry estimates that sand consumption could surge to 3.1 million mt in 2030 from 1 million in 2018, with the number of drilling rigs increasing to 77 from 30 over the same period.

Argentina is betting on development of the play to compensate for dwindling conventional output as reserves mature.

The Energy Ministry forecasts that a rise in total gas production to 174 million-200 million cu m/d in 2030 from 123 million cu m/d in 2017. Over the same period, overall oil production is expected to reach 660,300-750,200 b/d in 2030, up from 478,000 b/d in 2017.

--Charles Newbery,

--Edited by Derek Sands,