What arrives in the pipeline: defining how Techint is paid and contracting the civil works

Construction of the gas pipeline that will connect Vaca Muerta with Buenos Aires took an unexpected turn on Friday: the Minister of Economy, Martín Guzmán, will have the last word on the works. So far, Energía Argentina had prepared the tender documents and selected the winners. But that all changed with the allegations between Matías Kulfas (former Minister of Productive Development) and the management of Energía Argentina, led by Agustín Gerez.

The pipeline overlooks two big tasks. In the short term, it is necessary to fix the financing for Tenaris-Siat (by Techint). The company was the sole bidder for the supply of pipes, a $ 600 million contract. But the financing of this process is not yet resolved. The economy announced on Friday evening that it had appointed “the Secretary of Energy, as chairman of the pipeline evaluation commission, Dario Martinez“.

In less than a month, Energía Argentina – led by officials who adhere to the Kirchnerism – will launch the tender for the construction of work: they are 573 kilometers which is expected to be ready in June 2023. The start is scheduled for August. The budget for this activity is $ 220,000 million (Neighbor 1.8 billion dollars at the official exchange rate).

All specifications relating to the construction of the pipeline are published on the company website. There you can see the technical requirements of the pipes and the characteristics that the companies that want to build the pipeline must have.

To get to June 2023, which is the goal proposed by the government, it will be necessary to build 6 kilometers per dayaccording to the estimates of one of the construction companies that wants to keep the work.

The pipeline is divided into four sections and then it has a fifth line to connect to compression plant.

Each company interested in construction must submit offers for at least the four sections of the extension. It can be awarded only in one of those parts, with the exception of companies that present themselves in association and can access up to two sections in all.

Techint, Sacde, BTU and Victor Contreras These are the four companies considered with “possibilities”. To participate, it is necessary to have as a background the completion of works, or that have a state of progress of 60%, in gas pipelines with a length of not less than 120 kilometers, at high pressure and built in the last 15 years. The requirement drops to 75-kilometer pipelines if built from 2016 to today.

the first step It has 220 kilometers of piping and an expected outlay of $ 69 billion. The according to it will also use 220 kilometers of piping and consume $ 69 billion. The third tranche It is 133 kilometers long, with a budget of nearly 42,000 million dollars. The fourth the section is 29 kilometers long, with a parallel path to Neuba II and a connection to another pipeline, with 28,000 million dollars. Finally, there is a compression system in Mercedes (province of Buenos Aires), for 12,000 million dollars.

“It will be a marathon, where a lot of precision and speed are required. The delay in each section will delay everything else, because everything is hooked up, ”says an engineer who was studying the specifications of one of the bidders. Some of the companies have already sent technicians to different areas that could be “conflicting”, due to the existence of fields or pending provincial clearance requirements.

Guzmán and Kirchnerism tend to disagree on tariff issues. The minister proposes increases higher than those desired by the “bishops” of Kirchnerism in the Secretariat for Energy. However, in the pipeline, they talk about alignment. “(Mauricio) Macri also wants the pipeline to be built,” an official source exaggerates. “It is the policy of the state. President Alberto Fernández, Minister Guzmán, the Secretary of Energy (Darío Martinez), all agree on this, ”proclaimed another official. Guzmán was in charge of homework on Friday, which he delegated to Martínez.

Offers for civil works will be announced from 8 July. Once activated, starting in August, a sort of army should operate from Neuquén to Buenos Aires to arrive on time.

To start, construction companies need pipes. They are 36-inch tubes and a special sheet thickness to withstand the demand for gas. They maximize transportation capacity at a lower cost.”, According to Energía Argentina and Techint.

The company plans to raise $ 600 million for those pipes. He will produce them in his plant Valentín Alsina, from sheet metal produced in the Brazilian factory of Usiminasa company in which Techint owns 20% of the shares.

To bring this dish from Brazil, Techint needs transfer currency to Usiminas. Authorization for this operation depends on the Central Bank and the Ministry of Economy. These transfers and advances will be one of the first tasks that Guzmán and the board of directors of Energía Argentina will have to prepare together.

Initially, the pipeline will be able to carry 12 million cubic meters per day. In each subsequent phase, it will double to 48 million cubic meters, but it will be much later, as each phase takes no less than 18 months. In that situation, and only in several years. Argentina would be able to stop LNG exports. Today it counts and could cost more than $ 4 billion this year.

If it starts up again before next winter, the pipeline could result in savings of $ 1,500 million. It is for the gas that imports will stop (and it is paid at 25 dollars per million BTU, the unit of measurement of the sector), to replace it with local production, remunerated between 4 and 5 US dollars.

Argentina has more gas than it can consume. But the producers do not extract it, because they find a “bottleneck” in the transfer to the production centers. The fundamental mission of the pipeline and others that follow is to release all that productive potential.

“In a year, the work pays for itself with the savings it will generate in foreign currency,” agree between companies and the government.