Neuquén roundup: Midstream permitting, Vaca Muerta power demand study

Public consultations on two midstream hydrocarbons initiatives were held in Argentine province Neuquén.

The province, chiefly because of the Vaca Muerta shale play, is pulling in the lion’s share of oil and gas investment in Argentina.

Provincial infrastructure minister Rubén Etcheverry said US$10bn in upstream and midstream outlay was expected for this year. 

The five biggest players by forecast Vaca Muerta outlay are YPF (US$4.3bn), Vista Energy (US$903mn), Pluspetrol (US$861mn), Pan American Energy (US$848mn) and Tecpetrol (US$481mn), according to a presentation.

Road and water infrastructure is also deemed necessary to support hydrocarbons production growth at Vaca Muerta.

Argentina’s oil production in May was 698,800b/d (111,000m3/d), up 8.5% year-on-year, according to data from local consultancy Economía & Energía.

Output of unconventionals climbed 23.8% to 366,500b/d, offsetting a drop of 4.6% in conventionals to 332,200b/d. 

The Neuquén basin, home to investment magnet Vaca Muerta, is consolidating its position as the country’s top-producing basin, accounting for 467,200b/d in May, up 15.7% and offsetting declines in other basins. 

President Javier Milei's economic reform law, known as Ley Bases, deregulates the oil and gas sector, easing state control over exports and pricing.  

Oil treatment, gas compression 

State-controlled hydrocarbons company YPF filed an environmental impact study for a midstream oil project planned for Neuquén province.

YPF is seeking the green light to build crude treatment plant Sur de Los Lagos and gas compression plant La Angostura Sur in the concession area Loma La Lata-Sierra Barrosa.

The treatment plant is designed to process 16,500m3/d liquids, while the gas compression facility is configured to process 4Mm3/d, according to documents filed with the province’s environment ministry.

The gas and liquids would be sent to the facilities from satellite units.

A public consultation is due to be held September 12, according to information from the Neuquén provincial government. 

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Oil pipelines

Neuquén held two public hearings concerning planned oil pipelines in the town of Añelo.

The first was for a proposed 8km link of 10 inches in diameter between the Vaca Muerta Norte duct – built by YPF to feed a refinery and the Otasa export pipeline to Chile – and pumping facilities. 

The second was for a proposed 30km pipeline, also 10 inches in diameter. These were filed by driller Vista Energy. Associated areas are Bajada del Palo Oeste, La Amarga Chica, Bajada del Palo Este and Coirón Amargo Norte. 

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Grid work study

Argentina’s federal investment council CFI is conducting research into future electric power demand in Vaca Muerta to support production growth and decarbonization, Etcheverry said during a recent webinar hosted by electronic gas market platform Megsa.

Results, including proposed projects, are due by the end of the year.

With this, the province will be able to plan works and financing, the official said.

Neuquén has provisionally identified five priority transmission links, involving combined investment of US$269mn, including VAT.

No. 1
  132kV Loma Lata-PP Banderita: US$6.0mn

No. 2
  132kV El Trapial-Puesto Hernández: US$7.50mn

No. 3
  500kV Vaca Muerta: US$90.0mn

No. 4
  2x132kV Vaca Muerta-El Trapial: US$67.0mn

No. 5
  132kV Loma Lata-Puesto Seccionamiento: US$51.0mn

Various financing options, for grid, highway and water projects, are on the table, he said. These include seeking multilateral funds, establishing public-private partnerships or tapping capital markets, with officials already working on solutions associated with the latter. 

Around US$1bn is needed for infrastructure, which works out to just 1% of projected outlay over the next decade, Etcheverry said.

The federal government’s Rigi investment promotion regime contains incentives for projects with price tags of more than US$200mn. Neuquén would need to adhere to the regulation by passing an associated bill.