Darío Martínez explained that “when the Milei government took office, its chancellor, who was its Minister of Public Works and its Secretary of Energy, denigrated both public works, the GNK and the reversal of the Northern Gas Pipeline, and with that fundamentally obtuse and loaded with liberal ideology, they suspended both works.
The paralysis of public works
“At that same moment we explained that the cost of the suspension of both works was going to lead this winter to a greater deficit for the State, and a higher cost of energy for the country, because in particular, to supply the north of Argentina, “It was going to depend exclusively on Bolivian gas, at the infinite price they wanted to set given the extreme need and weakness of our Government. In Milei terms: a price derived from a demand that cannot be postponed and a unique supply,” he added.
Martínez expressed that “if there is no reversal of the Northern Gas Pipeline, there is no possibility of bringing gas from Vaca Muerta, and not even regasified LNG from Escobar to the region that extends from the north of Córdoba to the northern border of the country, and this affects no “Not only the provision of gas, but also that of electrical energy, since it leaves the important thermal plants in that region without fuel.”
North Gasduct Reversal Techint Sacde welding 100 Kilometers (1).jpeg
The work of the North Gasduct is vital to replace Bolivian gas with production from Vaca Muerta.
Martínez stated that “They realized this problem too late, when the water reached their necks, and at that time, the privatization of public works and the suspension of ongoing works ended, but it was too late. Today Milei will pay Bolivia up to US$ 21 MMbtu for 4 million m3 per day in the winter, when the reversal works would have allowed 5 million m3 of gas per day to be transported from Vaca Muerta for US$ 4.
How much will Bolivian gas cost?
As reported by +e, Delay in the reversal of the Northern Gas Pipeline will force Bolivians to import gas up to five times more expensive than what it costs in Vaca Muerta. The agreement made between Enarsa and YPFB for the months of August and September includes prices that would average the $20 per million BTU.
“The reflected price is within the parameters of the Supply Guarantee Premium that had already been introduced as a concept in the 2022 addendum with similar levels. As a reference, that year YPFB was paid a value of 22.5 US$/MMbtu for the additional gas and currently 17.5 US$/MMbtu is being paid,” the company indicated.
As they explain, a precise price cannot be known because it depends on a formula that takes a basket of fuels and their international value, which can fluctuate. However, they anticipate that a possible value could be $19 or $20.
The last addendum contemplates an extension of the contract that ended on July 31 for two more months, although without an obligation to purchase. “It is upon request,” they say from Enarsa, where they trust that by September 15 the first part of the reversal will be completed with the injection of 5 MMm3/d, one million more than the maximum that Bolivia could deliver during these two months.
