Techint plans US$1bn gas pipeline

Argentine construction company Techint plans to lead a consortium that will build a US$1bn gas pipeline in the northeast region of the country to connect Bolivia to the Argentine province of Santa Fe by 2006, local newspaper El Cronista quoted planning minister Julio De Vido and Techint sources as saying. The 1,500km pipeline, known as Neuba II, will initially transport 10 million cubic meters a day (mcm/d), which could be enlarged to 20mcm/d in the future. Neuba II will connect to the existing Loma la Lata pipeline operated by local gas transporters TGN and TGS, and could be extended to Brazil in the future, De Vido said. The Techint-led consortium will invest US$750mn, or 75% of the capital, while the state government will provide the rest of the financing, Cronista reported. The idea of a Bolivia-Argentina gas pipeline is not new, but De Vido's announcement took the industry by surprise with investment figures and the news that Techint will lead the consortium, the paper reported. "Obviously this is a mega-project and we are not going to do it alone. So far we haven't started any negotiations," Cronista quoted a Techint source as saying. "The idea is to supply not only the surrounding provinces (Chaco, Formosa, Misiones, Corrientes and Santa Fe), but also Argentina's major demand centers, Buenos Aires, Cordoba and Rosario," the source said. Construction would take about over one year, De Vido said, adding that "[Gas regulator] Enargas has to authorize the operator of the pipeline, and we have to create the legal framework." The investment is justified because by the time the project starts operations, gas rates, which are currently frozen at their pesofied 2002 levels, will be higher and there will be "other incentives," De Vido said.