Argentina’s Vaca Muerta pipeline decree: Key points

The administration of Argentina’s President Alberto Fernández has further advanced its planned US$3.5bn gas pipeline project.

Fernández issued a decree giving state energy company IEASA a 35-year transport concession for the central component, the Presidente Néstor Kirchner duct. The move follows a resolution declaring the project of national public interest. 

IEASA, either directly or via third parties, is authorized to build, maintain and operate the duct, states the decree, which adds that the company can also cede, partially or fully, its interests in the concession to state oil and gas firm YPF, which would require the green light from the federal energy department. 

Gas regulator Enargas will “determine and amend” the rates charged by IEASA for the provision of transport services. 

Different rates will apply for capacity contracted under a mechanism involving infrastructure construction or expansion work. IEASA can agree such contracts following approval from the economy ministry. YPF will be granted capacity-contracting priority and authorized to collaborate with IEASA on projects, the decree states. 

In terms of non-contracted capacity, IEASA will be obliged to allow third parties to obtain access on a non-discriminatory basis.

The decree also establishes an administrative and financial trust, Fondesgas, with state-owned investment and foreign trade bank BICE appointed trustee. Issuance of associated debt instruments and project participation certificates will also be authorized, the decree states.

Fondesgas would administer a wider gas sector development scheme known as Transport.Ar Producción Nacional.

Argentina plans to tackle the overall project in two phases, with the first financed using public funds and sporting a price tag of around US$1.6bn. 

A central purpose of the pipeline and its ancillary elements is easing a winter dispatch bottleneck at the Vaca Muerta shale play in the Neuquina basin and, in turn, supporting output growth so that costly imports can be substituted with cheaper domestic production.

IEASA is also tasked with leading the development of ancillary projects – which include construction, expansion and flow-reversal work – under the Transport.Ar Producción Nacional.

The company is working on plans to launch construction of the first phase and the objective is to bring the duct into service by around May 2023, federal energy department chief Darío Martínez has said previously.