Argentina seeking EPC firm for Gasoducto Norte flow-reversal project

Argentina is advancing a major natural gas project that is part of a wider strategy to substitute dollar-devouring imports and build the country’s exporting muscles. 

State energy company and project owner Energía Argentina on Friday launched a tender for the initiative, the Gasoducto Norte flow-reversal project, which is designed to support dispatch of domestic gas to northern regions.

The winning bidder would provide engineering, procurement and construction services. Bids are due by September 29, according to a notice published in Argentina’s official gazette. A guarantee of the equivalent of 1% of the offer would be required. 

Officials have previously said some US$712mn would be needed and have been working to secure the requisite funds. The country was granted a loan of up to US$540mn from regional development bank CAF and the federal energy department has instructed wholesale power market administrator Cammesa to put aside, for a project loan, income obtained from electricity exports.

Flow-reversal work supports the transport of Neuquén basin gas to the country’s north, today supplied by dwindling imports from Bolivia. Gas transporter TGN has completed US$11.6mn in associated work.

The Gasoducto Norte pipeline runs for around 1,450km between General Pacheco in Buenos Aires province and Campo Durán in the north of Salta province, near the Bolivian border. With 12 compression plants, capacity is 28.5Mm3/d, according to the 2021 annual report published by gas regulator Enargas. The project would help substitute around US$2bn/y of energy imports, according to an Energía Argentina presentation. The bulk of power generated in the north is thermoelectric and the gas duct would reduce costs, it said.

The money from CAF and Energía-Cammesa would be spent on the following project components, according to a resolution published earlier this year.

• A 123km, 36-inch pipeline between the La Carlota compression plant on the Centro Oeste duct and the Tío Pujio compression plant on the Gasoducto Norte.
• 62km of 30-inch loops on the Gasoducto Norte between Tío Pujio and Ferreyra.
• Injection reversal work on Gasoducto Norte compression plants Ferreyra, Dean Funes, Lavalle and Lumbrera.

Pipes would be supplied by industrial group Techint’s Tenaris unit, local media outlet EconoJournal reported. 

The work, deemed urgent, is linked to the Vaca Muerta gas pipeline project. The first phase of this project was brought online this quarter. The second phase, due to go into operation in the southern hemisphere’s 2024 winter, would facilitate increased gas flows to the north and, following the completion of further flow-reversal projects, the full substitution of Bolivian imports and, potentially, higher exports to Brazil and Chile. 

The Neuquén basin, home to most of the Vaca Muerta unconventional formation, has become Argentina’s hydrocarbons growth engine. Vaca Muerta has been pulling in the bulk of investment and driving output amid a general decline in production from conventional assets.

Read the resolution