Argentine govt to relinquish control of pipeline operator

Friday, December 11, 2015

Argentine natural gas regulator Enargas will relinquish control of natural gas pipeline operator TGN, the latter said Friday in a securities filing.

Enargas took control of TGN in 2008 amid financial difficulties for the gas transporter.

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TGN attributed the troubles to its inability to raise transport rates under the policies of then-president Cristina Fernández de Kirchner.

Earlier this year, Enargas authorized the second rate hike since 1999 for TGN so that the latter could cover its operational and maintenance costs.

TGN said at the time it had recorded 17 straight quarters of operating losses.

The Friday announcement comes one day after the swearing in of Argentina's new pro-business president Mauricio Macri.

Macri is expected to devalue the local currency in order to bring the official exchange rate for the peso in line with the black market rate, a move analysts say is necessary but will have short-term negative impacts on utilities with peso-denominated revenues.

TGN supplies gas to eight of the country's nine distributors, as well as to power generators and other industrial clients throughout 15 of Argentina's 24 provinces.