Argentina’s Oldelval gets pipeline concession extension, presents US$890mn plan

Argentina extended oil pipeline operator Oldelval’s concession contract by 10 years and approved an associated US$893mn spending plan for the period.

The current license of Oldelval – which transports around 90% of oil produced in the Neuquén basin and over 50% of national output – had been due to expire in November 2027, according to a resolution published in the official gazette.

Owned by hydrocarbons firms, Oldelval had previously indicated that US$750mn in planned infrastructure outlay, on a new pipeline and pumping station work, hinged on being granted the extension.

The company plans to boost dispatch capacity to 72,000m3/d (452,866b/d) from 36,000m3/d, easing a bottleneck that has resulted from rapid growth at the Vaca Muerta shale play. Expansion work would help enable the country to boost oil exports by 180,000b/d-250,000b/d (28,617-39,746m3/d), the equivalent of US$4.0bn-US$6.5bn a year, according to an Oldelval presentation earlier this year.

Oldelval CEO Ricardo Hösel has said previously the aim was to start work on the project – the Medanito-Puesto Hernández duct – before the end of the year.

The resolution also outlines Oldelval’s US$893mn investment and working plan for the 10-year extension period. Elements include a US$39mn expansion of a stretch of pipeline known as Lago Pellegrini-Allen.

Investment 

• Installation integrity: US$353mn
• Transport efficiency: U$117mn
• Loss and stock control: US$1.15mn
• Energy efficiency: US$16.5mn
• Digital transformation: US$8.7mn 

Maintenance 

• Maintenance work: US$340mn 

Expansion projects 

•  A US$39mn expansion of the Lago Pellegrini-Allen stretch. 

Argentina’s overall oil output averaged 93,100m3/d in July, up 12.2% year-on-year, according to a report from local energy think tank the General Mosconi institute. Unconventional oil output, almost all coming from the Neuquén basin, averaged 39,200m3/d, up 47.2%.