Argentina’s US$700mn gas pipeline flow-reversal tender draws 3 bids

Three parties bid for a contract to carry out Argentina’s US$710mn Gasoducto Norte flow-reversal project.

The initiative is critical to plans to substitute imports of Bolivian gas – expected to end in 2024 – by supporting the transport of Neuquén basin gas to Argentina’s north. The basin hosts the Vaca Muerta unconventional hydrocarbons formation, the country's gas production growth engine.

State energy company and project owner Energía Argentina received bids from BTU, Pumpco and consortium Techint-Sacde after launching the process in August. Economic bids are due to be opened around mid-October. 

The EPC contract involves building a 122km pipeline of 36 inches in diameter between Tío Pujio and La Carlota in Córdoba province and two loops of 62km of 30-inch pipelines, along with reversing the gas injection flow at four existing compression stations in Córdoba, Santiago del Estero and Salta provinces.

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.

Gas transporter TGN has already completed US$11.6mn in associated initial work.

"Reversal of the Gasoducto Norte will allow Vaca Muerta gas to be brought to industries in Córdoba, Tucumán, La Rioja, Catamarca, Santiago del Estero, Salta and Jujuy, as well as the connection of homes to natural gas networks and the scale development of new industrial activities, especially lithium mining,” Energía Argentina said in a statement. 

The flow-reversal project falls under the umbrella of the second phase of the Presidente Néstor Kircher project, whose chief component is a US$3bn pipeline still in the pre-tendering phase.   

Bolivian imports are currently consumed in northern Argentina. Imports have been trending down, standing at around 8Mm3/d in early September, down from a high of 17-18Mm3/d.

The current project will permit the dispatch of up to 19Mm3/d to the north, while a potential third phase – involving more loops and compression station work – would see capacity climb to 29Mm3/d.

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Energía Argentina said commissioning was expected to take place before the country’s 2024 winter season starts, around mid-year, adding that exports to Chile, Bolivia and Brazil were possible.