Argentina and Chile

Argentina watch: Pipeline engineering tender, shale block, green hydrogen, biofuels

Bnamericas Published: Wednesday, November 02, 2022

One bidder has advanced in a tendering process for a front-end engineering design contract corresponding to the planned second phase of Argentina’s Vaca Muerta gas pipeline megaproject.

The bid evaluation board of state energy firm Energía Argentina recommended accepting the technical offer of company Suring Ingeniería del Sur. The next stage involves opening the firm’s economic bid. Buenos Aires-based Suring has experience in both gas pipeline and high-voltage power infrastructure planning, according to information on its website.  

Offers placed by consortium GIE-Latintub and Transportadora de Gas del Sur were deemed inadmissible, according to Energía Argentina tendering documents. 

The first phase, already in the construction phase, involves pipeline work between Tratayén in Neuquén province and Salliqueló in Buenos Aires province (558km). Ancillary projects are included, among them construction of the Mercedes-Cardales duct (73km), in Buenos Aires province. This would link Argentina’s northern and southern gas systems. 

The second phase – which may need private investment to advance – would involve laying pipeline between Salliqueló and San Jerónimo in Santa Fe province (484km), among other elements.


Details are being finalized of an agreement under which upstream players Chevron and YPF will be granted a 35-year license to operate an area in the Vaca Muerta unconventionals formation, Neuquén province said.

The acreage is Narambuena, where the firms have a 14-well pilot plan and overall outlay is expected to reach US$3bn. 

Governor Omar Gutiérrez said he hoped the deal would be sealed "within days."

In September, Chevron said it would accelerate its 2022-23 investment plan at Neuquén basin concession El Trapial. In April, Chevron was awarded a license to extract unconventional hydrocarbons from the area – its only operated concession, according to federal energy department data. The area also has conventional hydrocarbons potential.

Chevron partners with state oil firm YPF at acreage Loma Campana, Argentina’s second biggest oil concession by output.

ALSO READ: Top 10 oil blocks in Argentina’s Neuquén basin


Gutiérrez met with Josep Borrell, EU’s high representative for foreign affairs and security policy, ahead of a visit to Neuquén by European ambassadors next week. 

“Argentina has spectacular energy potential, in particular this province has the second largest gas reserve in the world and has a lot of lithium. Europe has given up Russian gas, which was 40% of our imports, and we have to look for alternative sources. We know it's not going to be for tomorrow, because everything takes time, but we have to start looking at when and how much,” Borrell was quoted as saying in a provincial press release.

Argentina currently pipes gas to its neighbors, chiefly Chile. Exporting natural gas overseas in the form of LNG would require investment in liquefaction facilities.  


Government officials from southern Argentine province Tierra del Fuego and Chile are reportedly due to meet in 1Q23 to discuss green hydrogen.

Officials will explore potential areas for collaboration, the province’s hydrocarbons chief, Alejandro Aguirre, told broadcaster TV2 Noticias, local media outlet Más Energía reported. 

Tierra del Fuego is eyeing the nascent green hydrogen industry. Across the border, southern Chile is home to several export-scale green hydrogen projects. 

“We share the same region and the same problems, for which reason we must develop a strategy that favors, in terms of production, both countries, and that also provides correct environmental protection,” Aguirre was quoted as saying. 

Windswept Tierra del Fuego has conducted a study into the economic feasibility of green hydrogen production

Argentina currently pipes natural gas to Chile. The countries are also linked by a single power transmission line. A second line is in the environmental evaluation phase. 


Argentina’s federal energy department has amended the price of bioethanol that is used for blending with gasoline. 

In a resolution, the department set a retroactive price of 92.7 pesos (US$0.59) a liter for ethanol produced from sugarcane in transactions carried out between October 1 and November 1. For transactions from November 2, the price is set at 113 pesos a liter.

The price of ethanol produced from corn was set at 113 pesos a liter from October 1.

The prices will remain in place until officials update them, the department said in a resolution.

The government introduced a biofuels law in 2021 and later published associated secondary legislation to guide its implementation.

More secondary legislation governing the implementation of the law was recently introduced. Via resolution, authorities created a registry of biofuel producers, blenders, traders and storage players. Officials also introduced biodiesel and bioethanol classification parameters, outlined what usage cases do not require, by law, blended fuels, and called for the creation of a biofuels commission tasked with analyzing projects and proposals, among other functions. 

The biofuels law, in force until end-2030, was branded a promotional regime by the government, with some quarters of the biofuel industry criticizing it as damaging to the sector.

Under the law, the minimum proportion of bioethanol in the gasoline mix remains at 12% and the minimum proportion of biodiesel in the diesel mix is 5%, down from 10%. The energy department is authorized to make future cuts. Diesel blending rules were temporarily changed this year amid a diesel supply shortage. 

 ALSO READ: Game of Fuels

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