Govt. ratifies US$169mn fund to expand TGN pipeline

Argentina's government ratified on Monday, through the publication of a decree in the country's official gazette, the creation of a US$169mn fund to expand the capacity of the TGN pipeline in northern Argentina by 1.8 million cubic meters of gas a day (mcm/d), local newspapers reported. Spanish oil company Repsol YPF (NYSE: REP) signed a letter of intent with Argentina's government in November to invest US$100mn in the project. The project, which was announced in September this year, will expand the pipeline's capacity by 1.8mcm/d from its existing 22mcm/d to meet industrial demand in northern and central Argentina. The pipeline links gas fields in the northern province of Salta with Santa Fe. Local gas transporter TGN, which operates the pipeline, will provide US$11mn for the project and Brazil's national development bank BNDES will finance US$31mn to buy Brazilian pipes for the expansion. The remaining US$27mn will be obtained through a sales tax refund from Argentine bank Banco Nación. Operations are scheduled to start in August 2005, which means work must begin in January.