Argentina hydrocarbons watch

Construction of the US$48mn Regional Centro II gas pipeline in Argentina’s Santa Fe province will resume and work will start on new infrastructure, officials said.

The announcement was made by federal energy department chief Darío Martínez and provincial governor Omar Perotti.

State energy company Ieasa had announced earlier in the year its intention to restart work on the 119km duct, which is almost 90% complete but has been on hold since 2019 after payments to construction companies were halted.  

Along with Regional Centro II, commitments were made to build pipelines Regional Sur (US$14.3mn) and Metropolitano (US$20.0mn) in and around Santa Fe city, an energy department statement said. Gas distribution networks in three localities will also be expanded, requiring 2.45bn pesos (US$25.2mn) in state investment, it added.

In parallel, Argentina is planning to build out trunk gas pipeline infrastructure, with a central aim of expanding capacity to transport output from production hub Vaca Muerta.

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La Pampa province's publicly owned hydrocarbons company, Pampetrol, is seeking to form alliances with national oil and gas company YPF, local media outlet La Arena reported.

The proposed partnerships would encompass the spheres of hydrocarbons, electric power (via unit YPF Luz) and agriculture (via unit YPF Agro). Another facet is development of La Pampa SMEs that could potentially supply firms operating in shale play Vaca Muerta, La Arena said.

Pampetrol recently launched an auction process for rights to the Medanito Sur hydrocarbons block, stipulating that the winning party would also have to invest a minimum of US$5mn in a renewable energy plant.

Offers are due September 6, according to the tender announcement. 

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Hydrocarbons province Neuquén has asked the federal government to declare a water emergency, citing the need for budget resources to mitigate the impact.

Neuquén recently issued a 180-day provincial decree against a backdrop of a long-standing drought impacting the Neuquén, Limay and Colorado river basins. The decree also encompasses measures that guarantee water supply for human consumption and agriculture, and establishes a water, social and productive emergency committee.

The province has been under drought conditions for more than a decade, with the situation worsening this year.

Drought conditions are impacting large swathes of South America, including Brazil, Paraguay and Chile.