Given the announcements and celebrations that the Government is preparing on the occasion of the partial inauguration of the NEUBA III gas pipeline, inappropriately renamed Néstor Kirchner, I think it appropriate to mention in this brief note several of the aspects that for obvious reasons will be omitted in the epic story of official propaganda.
First it is necessary to clarify that the filling of half of the first section of a necessary work is inaugurated because it will allow to evacuate greater volumes of gas production from Vaca Muerta and replace gas imports by ship, LNG, which, without solution of continuity occur since 2008. Also because it will be able to supply the demand of the NOA in the absence of supply from Bolivia, after reversing the flow of the gas pipeline, until now from north to south.
It is a gas pipeline that, when seriously completed, will dump an additional 44 million M3 into the local and export market. That is, 40% of the current production at the country level of natural gas. This increase in production, thanks to the greater evacuation capacity and a reconfiguration in the backbone networks, will be absorbed by the seasonal peak that occurs in the four cold months - from May to August - when residential consumption increases total demand by more than 40%.
But the pipeline should also be used for the remaining eight months. Only LNG values above $15 per MBTU would justify the investment for exclusive winter use, which is not happening today. This is not the case for oil companies that need continuous annual production to justify their investments.
Therefore, it is imperative to increase domestic demand for gas, expanding local networks - with the convenient reduction in the use of bottles -, increasing gas in transport, replacing liquid fuel in power plants and recovering the Chilean market that we stopped supplying completely in 2007, due to the bad energy policy implemented by Néstor Kirchner since 2003. Also, to agree with Bolivia the use of the gas pipeline with which it supplied Brazil. And there is not much left in the local/regional market to achieve full utilization of the new pipeline in the short term.
However, the demand added by NEUBA III is negligible in relation to the extraordinary gas resource of Vaca Muerta. Several gas pipelines of this magnitude will be needed exclusively to export to overseas markets, after liquefaction in plants located on our maritime coast.
A liquefaction plant passes to the liquid phase the natural gas that transports the pipeline from the fields and its cost is much higher than that of the pipeline that supplies it. In addition, it will be necessary to develop marketing skills, which we do not yet have, to be able to access competitive markets such as those in Europe, China and India.
But let's go back to the NEUBA III gas pipeline, alias Néstor Kirchner, the reason for the great official uproar. Having already highlighted the need and importance of this gas pipeline once completed, I now add that the "Urgency" to partially inaugurate the first section this winter justified several anomalies such as ignoring the Public Works Law, which imposes having technical, economic, financial and environmental feasibility studies before facing the project. That urgency also justified leaving the state management of the project in inexperienced hands and accepting any price for services, materials and equipment to build the pipeline in record time.
In the international tender for the provision of the pipes there was only one bidder, a subsidiary of the specialist in regulated markets, Techint. But, luckily, also with international capacity and experience in this area. Three qualified local engineering companies participated in the laying of the 475 km of pipes that managed to meet the meager contractual deadlines.
The government, frightened by the LNG prices of 2022 because of the Russian invasion, wanted to inaugurate at any cost the pipeline this winter to replace imports with gas from Vaca Muerta, avoiding the drain of foreign currency that meant the cash payment to the LNG carriers. Too bad he had let two winters pass without the pipeline for ideological reasons and petty interests, which meant the country to date, about USD 5,300 million, only in terms of LNG imports.
The specifications to tender the work were ready in 2019, but because they were carried out in the previous management and as a private investment project, it was replaced by another investment and public management project. Oh energy sovereignty! Wildcard of Kirchnerism in its 20s to justify any nonsense.
But what does this inauguration really consist of, which motivates celebrations and announcements with epic and foundational edges? As I said, only the beginning of the filling of the first section of the pipeline will take about 20/30 days. Then, in order for the gas to reach the demand, it will need to be connected to the TGS trunk.
Only then, already in August, is it expected to have just 11 million M3/day, which will replace the import of the last month of this winter by about USD 140 million, at the current prices of the LNG spot market. However, the rush to finish it, even if it was the last day of this winter, cost the country an extra USD 800 million – difference between the official budget of 2019 and the current one – Then, and leaving aside the 5,300 million lost for having postponed it for two years, the balance of this "rush" was negative 660 million dollars. However, celebrejan.w
See also