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    Vaca Muerta shale pipe delays due to legal issues: press


A legal probe would be a setback for Argentina's gas export ambitions.

by: Callum Cyrus

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Complimentary, Natural Gas & LNG News, Americas, News By Country, Argentina

Vaca Muerta shale pipe delays due to legal issues: press

A planned gas pipeline from Argentina's Vaca Muerta shale reserve could be delayed, due to legal issues surrounding the project, Reuters reported June 7.

Courts are expected to investigate an initial $500mn pipe laying tender to the sole bidder, the Luxembourg-based supplier Tenaris. While six early inquiries were made to state-owned energy supplier Energia Argentina, which coordinated the award, the company says Tenaris subsidiary SIAT submitted the only firm bid. Tenaris CEO Paolo Rocca has insisted the tender was fair and the process above board. Speaking at a local industry event in Buenos Aires, he claimed "there was no corruption or undue pressure."


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The 563km, 24mn m3/day pipeline would connect the province of Neuquen with an area west of Buenos Aires, Salliquelo, increasing Vaca Muerta's transmission capacity by 25%, Reuters said. Vaca Muerta is the world's second largest gas reserve, however extraction is largely used to satisfy domestic demand.

Efforts to attract investment have been frustrated by the fragile Argentinian economy. But by becoming a global export player, Argentinian gas could attract much-needed foreign currency to help resolve the nation's long-standing devalued currency issues.

Reuters has reported the funds for the midstream pipeline could come from state coffers, despite Argentina's hefty debt burden. And attracting financial support could be challenging without a federal budget. A legal wrangle can only compound Buenos Aires's conundrum.

The national oil company, YPF, previously chartered a floating LNG terminal for gas exports from Argentina, but later cancelled the tender due to declining gas prices. While the project has since resurfaced as a $10bn long-term LNG terminal proposal, maximising gas flows from the Vaca Muerta will be crucial to attract financing. Buenos Aires estimates that, given bullish global markets, LNG exports from Argentina could generate as much as $15bn of annual revenue.