Oldelval increasing size of Argentine oil pipeline expansion

Bnamericas Published: Friday, December 02, 2022

Argentine pipeline operator Oldelval will increase capacity of a key oil duct by more than originally planned, amid strong demand from upstream players keen on ratcheting up production.

Officials agreed to add 50,000m3/d of new capacity, up from the previously announced 36,000m3/d, Oldelval confirmed to BNamericas. 

Expansion work – already under way – is designed to ease a dispatch bottleneck between the Neuquén basin and export facilities in Puerto Rosales, Buenos Aires province. 

Basin producers are targeting the export market and have been ramping up output, in turn, straining the existing 36,000m3/d nameplate capacity duct, which is running at around 43,000m3/d, partly via use of polymers to boost compression.

Following completion of expansion work, nameplate capacity should stand at 86,000m3/d.

The additional 14,000m3/d of capacity will be assigned to the companies that bid for some of the original 36,000m3/d capacity, with the exception of Chevron and CHNC, a Vaca Muerta shale play-focused unit linked to national oil company YPF and Chevron. In addition, Chevron reduced by 4,000m3/d its awarded capacity, an amount that will be shared out pro rata among the other bidders.

Bidding parties were awarded 50% of volumes offered. To pay for the additional 14,000m3/d, Oldelval will use the same financing model as designed for the original 36,000m3/d project: proceeds from the sale of capacity (80%) and the issuance of bonds (20%). Contracts are due to be signed at the end of the month. 

Overall Argentine oil output averaged 95,800m3/d in September, up 1.7% month-on-month and 12.9% year-on-year, according to data in a General Mosconi energy think tank report. Unconventional oil output averaged 42,000m3/d, up 46.7% year-on-year. 

Almost all of the country’s shale oil and tight oil is produced in the Neuquén basin. Overall basin oil output was 58,100m3/d, up 26.6% year-on-year.

Pipeline and storage investment, along with high prices on the international market, is whetting the appetites of upstream firms. Argentina’s hydrocarbons production outlook is chiefly linked to the development of above-ground infrastructure to process and dispatch output. 

The country’s biggest province by production, Neuquén, said exports totaled 2.6Mb (million barrels), or 30% of its output, in September.

Subscribe to the most trusted business intelligence platform in Latin America. Let us show you our solutions for Suppliers, Contractors, Operators, Government, Legal, Financial and Insurance.

Subscribe to Latin America’s most trusted business intelligence platform.

Other projects in: Oil & Gas (Argentina)

Get critical information about thousands of Oil & Gas projects in Latin America: what stages they're in, capex, related companies, contacts and more.

Other companies in: Oil & Gas (Argentina)

Get critical information about thousands of Oil & Gas companies in Latin America: their projects, contacts, shareholders, related news and more.

  • Company: Grupo Pluspetrol  (Pluspetrol)
  • Founded in 1977, Argentine oil firm Pluspetrol S.A. is engaged in the exploration and production of oil and gas, particularly of unconventional resources. In Latin America, Plus...
  • Company: Total Austral S.A.  (TotalEnergies Austral)
  • Total Austral S.A., a producing subsidiary of French multinational integrated oil and gas company Total S.A., began operations in Argentina in 1978. The company operates and own...
  • Company: Shell Argentina
  • Shell Compañía Argentina de Petróleo S.A. (Shell CAPSA) is a subsidiary of Anglo-Dutch Royal Dutch Shell plc established in 1914 for manufacturing and trading of refined petrole...
  • Company: Arenas Argentinas del Paraná
  • The description included in this profile was taken directly from an official source and has not been modified or edited by the BNamericas’ researchers. However, it may have been...
  • Company: YPF S.A.  (YPF)
  • YPF S.A. is an Argentine fully integrated oil and gas company from upstream to downstream, including gas and power segments. It engages in the exploration, development and produ...
  • Company: Pan American Energy LLC  (Pan American Energy)
  • Argentine firm Pan American Energy LLC (PAE) is an oil and gas exploration and production company, which holds hydrocarbon reserves in Argentina, Bolivia and Chile. The company ...