TGS awards pipeline expansion to Techint consortium

Monday, March 7, 2005

Argentine gas transporter TGS has signed a contract with a consortium led by local construction company Techint to expand the San Martín and Neuba II natural gas pipelines in the south of the country, the presidential news service reported.

Techint's partners are Swedish engineering firm Skanska, local company Contreras Hermanos and Brazil's Odebrecht.

TGS received bids from Techint and another consortium led by local construction company Iecsa in December. Iecsa, the public services and infrastructure unit of local construction company Sideco Americana, partnered with Brazil's Camargo Correa.

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The US$285mn project is to expand the 296km, 30-inch diameter San Martín pipeline and the connecting 160km, 36-inch diameter Neuba II pipeline so they can transport an additional 2.9 million cubic meters of gas a day (Mm3/d) to the province of Buenos Aires.

Brazil's national development bank BNDES will provide a US$142mn loan for the project. TGS is controlled by Brazil's federal energy company Petrobras (NYSE: PBR).

Last week, gas transporter TGN awarded four contracts to Techint and one to Swedish engineering firm Skanska to expand the company's northern gas pipeline capacity by 1.8Mm3/d.

Gas for that pipeline will be imported from Bolivia to Argentina's Campo Durán field in Salta province and on to Tucumán, Córdoba and Buenos Aires.

"Now the state is going to actively participate in the promotion and exploration of gas so that the pipelines are always full," planning minister Julio de Vido said, referring to the fact that nearly 5Mm3/d of natural gas transport capacity will be added to the country's network by the two expansion projects.

Work on both expansion projects will begin immediately so that they can be up and running for the southern hemisphere's winter season in July-August.

Argentina's gas crisis stems from under investment in gas infrastructure and exploration during the last few years due to frozen wellhead prices, which are only gradually beginning to rise.