Argentina President To Sign A 1.6Bln Vaca Muerta Gas Pipeline Construction Decree
Argentina's President, Alberto Fernandez, will in the next few days sign a decree to push for the construction of the country's major gas pipeline in the Vaca Muerta shale formation to boost exports, an anonymous source told Reuters on Dec.21, 2021.
The plans and the exact timeline for the decree, which was previously undisclosed, come at a critical time when the country is pursuing efforts to boost domestic gas production and export.
Increased exports will be vital in getting more of the foreign currency that would be enough to fill in the depleted levels as the country holds debt talks with the International Monetary Fund (IMF).
The delay of the anticipated pipeline network project jeopardizes Argentina's efforts to reduce the current overreliance on exorbitantly priced energy imports, including highly-priced LNG.
According to the source, the first phase of the project will take about 18 months to complete and cost a whopping $1.6 billion. When completed successfully, it will add 24 million cubic meters of natural gas per day by next year.
"What is underway is a DNU (Decree of Necessity and Urgency) that the president will sign where he declares the Néstor Kirchner gas pipeline system of national interest," the source said.
The project would be funded from the government coffers, despite having been plucked out from the 2022 state budget, which could have added some $482 million to the initially acquired $1.1 Bln by congress early this month.
Even though the budget's absence would lead to an increase in cost, the decree would exempt the pipeline project from taxes accruing from bank debits and credits.
The project's first phase would include the construction of gas pipelines linking Salliquello in Buenos Aires province to Tratayen in Neuquen, the location of the Vaca Muerta formation.