Vaca Muerta Pipeline System

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Vaca Muerta Pipeline, also known as the Transportadora Gas del Centro Pipeline, is a proposed gas pipeline system in Argentina.[1]

Location

The 1040-kilometer pipeline would run from Tratayén in the Vaca Muerta shale fields to San Nicolás de los Arroyos in Buenos Aires province, passing en route through TGS's Saturno compression plant near Salliqueló (Buenos Aires province).[2][3][4]

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Project Details

  • Owner: Pampa Energía S.A., Techint
  • Proposed capacity: 40 MMcm/d (1413 MMcf/d)
  • Length: 1040 km / 646 miles
  • Status: Shelved
  • Start Year:

Background

Insufficient transportation infrastructure has held back oil and gas production and investment in Vaca Muerta, the world’s second-largest shale fields. The Vaca Muerta project, proposed in 2018 as a 1040 km pipeline to be constructed in two phases, would bring gas from the Vaca Muerta shale fields to Argentina's main population centers in and around Buenos Aires.[1]

In October 2018, two of Argentina's largest energy companies, Transportadora Gas del Sur (TGS, controlled by Buenos Aires-based Pampa Energia) and Transportadora Gas del Norte (TGN, controlled by the Italian-Argentine conglomerate Techint), expressed interest in forming a joint venture to develop the new pipeline.[2] In November 2018, at the G20 summit meeting in Buenos Aires, CEO Ray Washburne of the United States' development finance agency OPIC (Overseas Private Investment Corporation) signed a letter of interest to provide a $350 million loan in support of the project.[5][6]

The first, 570-km stage of the pipeline, capable of transporting 15 MMcm/d (530 MMcf/d) and estimated to cost US$800 million[4], would run from TGS's conditioning plant at Tratayén in the Vaca Muerta shale fields to TGS's Saturno compression plant near Salliqueló (Buenos Aires province)[2], where it would connect to TGS's existing transport system to reach Greater Buenos Aires and the coast.[3] The second, 470-km stage would extend from Salliqueló to connect with TGN's transport system near the city of San Nicolás de los Arroyos, in northern Buenos Aires province. The projected cost for both stages was estimated at US$2 billion, with pipeline capacity eventually reaching 40 MMcm/d (1413 MMcf/d). Initial plans called for the first stage to be operational by 2021, with the second stage to be completed by late 2024.[4]

Gas for the project would be fed in from a 150 km gathering pipeline running across 30 production areas within the Vaca Muerta shale fields, including the Bajada de Añelo, Bajo del Choique, La Invernada, Pampa de las Yeguas I y II, Parva Negra Este y Oeste, La Escalonada, Rincón La Ceniza, Los Toldos Norte, Sur, Este y Oeste, La Calera, El Orejano and Sierra Chata areas.[1] In December 2019, TGS completed work on the gathering pipeline and its associated conditioning plant in Tratayén. The gathering pipeline is capable of transporting 60 MMcm/d (2119 MMcf/d), while the initial capacity of the conditioning plant is 5MMm3/d (177 MMcf/d), with additional capacity to be added in expandable modules of up to 2.0 billion cubic feet per day as reserves are developed.[1][7]

In early 2019 Argentina’s Energy Secretariat announced plans for an international tender in which the government would solicit bids for the Vaca Muerta transmission pipeline project, but multiple impediments delayed further development. In November 2019, Argentina's Deputy Secretary of Hydrocarbons and Fuels announced that the deadline for bids had been extended to March 31, 2020, citing the fact that an additional section of pipeline had been added to the project, requiring more time for bidders to prepare, and noting that two potential bidders had expressed concerns about Argentina's ongoing financial crisis.[8]

In March 2020, the Argentine government announced that the tender would be further delayed due to increased credit market challenges posed by Covid-19, the collapse of international oil prices, and Argentina's high country risk rating. In light of these developments, the project was postponed until further notice, with some analysts speculating that it might become economically unviable.[9][10]

In July 2020 Argentina's Hydrocarbons Undersecretary Juan José Carbajales indicated that the government was putting the brakes on the Vaca Muerta pipeline, citing insufficient studies of its economic, technical and environmental feasibility, and noting that prospective customers for the Vaca Muerta project might just as easily be served by minor enhancements to the existing Gasoducto del Noreste Argentino gas pipeline.[11][12][13]

However, the Argentine government continues to consider alternative means of transporting natural gas from the Vaca Muerta shale fields, most notably the recently proposed Vaca Muerta-Brazil Pipeline, which would run from Tratayén to Porto Alegre, Brazil.[13][14]

Opposition

Numerous Argentine and international groups have expressed opposition to the Vaca Muerta pipeline based on the significant negative social, economic and environmental impacts of shale oil and gas development in Vaca Muerta. Organizations that have spoken out against the project include Argentina's Fundación Ambiente y Recursos Naturales (FARN), the U.N. Committee on Economic, Social, and Cultural Rights, Friends of the Earth, and the Center for International Environmental Law (CIEL).[15]

In a September 2019 statement, Friends of the Earth urged the United States' Overseas Private Investment Corporation (OPIC) to renounce a pair of new Vaca Muerta fracking projects, and to withdraw its support for the Vaca Muerta pipeline, for which OPIC had previously signed a letter of interest offering US$350 million in financing. Friends of the Earth cited five main objections to shale oil and gas development in Vaca Muerta, including devastating global climate implications, financial risk, unsustainable social and environmental impacts, violations of indigenous rights, and procedural flaws that violate Argentine and international law as well as OPIC policy.[16]

FARN regularly reports on the detrimental impact of shale oil and gas development in Vaca Muerta, documenting such issues as air, soil and water pollution, greenhouse gas emissions, rising cost of living, and health effects such as respiratory illness and cancer.[17][18] EJES (Enlace por la Justicia Energética y Socioambiental) is another Argentine group that publishes frequent reports on the economics, financing and environmental justice implications of the Vaca Muerta project.[19]

Articles and resources

References

  1. 1.0 1.1 1.2 1.3 "Argentina's TGS to build Vaca Muerta gas pipeline, conditioning plant" Reuters, April 3, 2018
  2. 2.0 2.1 2.2 "El ducto a San Nicolás une TGS y TGN 1.040 Km U$S1.300 Millones". Construar. October 26, 2018.
  3. 3.0 3.1 "El Gobierno formaliza la convocatoria para construir el gasoducto de Vaca Muerta | La Voz". La Voz. July 30, 2019.
  4. 4.0 4.1 4.2 "Argentina opens strategic gas pipeline tender". Argus Media. July 31, 2019.
  5. "More Like Texas: US state involvement in the Vaca Muerta mega-project in Argentina" (PDF). Platform / Citizens for Financial Justice. September 2019.
  6. "Informe N° 117 - Honorable Senado de la Nación (p 373)" (PDF). Jefatura de Gabinete de Ministros, Presidencia de la Nación. August 11, 2019.
  7. "TGS finalizó las obras del gasoducto de Vaca Muerta". EconoJournal. December 23, 2019.
  8. Financial crisis delays Vaca Muerta gas pipeline project in Patagonia, Argentina Institute for Energy Economics and Financial Analysis, November 11, 2019
  9. "Sin financiamiento, aplazan el gasoducto de Vaca Muerta y cancelan obra electrica". El Cronista. March 30, 2020.
  10. "El gasoducto a Vaca Muerta quedó entrampado en la crisis del coronavirus". Diario Río Negro. March 31, 2020.
  11. "Nación pone en suspenso la construcción del Gasoducto del Centro". Patagonia Shale. July 6, 2020.
  12. "Nación le baja el pulgar al gasoducto de Vaca Muerta". Diario Río Negro. July 11, 2020.
  13. 13.0 13.1 "Argentina halts Vaca Muerta gas pipeline project – Kallanish Energy News". Kallanish Energy. July 16, 2020.
  14. "Nación proyecta un gasoducto "AF - CFK" para Vaca Muerta". Diario Río Negro. July 24, 2020.
  15. "Members of Congress, Argentinian and U.S. groups call on OPIC to reject financing for fracking in Argentina". Friends of the Earth. September 10, 2019.
  16. "The U.S. Government Should Steer Clear of Argentina's "Dead Cow"" (PDF). Friends of the Earth. September 2019.
  17. Sosa, Eduardo (February 2021). "Efectos, impactos y riesgos socioambientales del megaproyecto Vaca Muerta" (PDF). FARN (Fundación Ambiente y Recursos Naturales).
  18. María Marta di Paola (December 2020). "Vaca Muerta, excerpt from the report 'Five Years Lost: How Finance is Blowing the Paris Carbon Budget' (pp 34-37)" (PDF). FARN, EJES, Urgewald et al.
  19. "Vaca Muerta y el desarrollo argentino: balance y perspectivas del fracking" (PDF). EJES (Enlace por la Justicia Energética y Socioambiental). May 2020.

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