Argentina secures $689 million loan for gas pipeline expansion

Argentina secures $689 million loan for gas pipeline expansion

Buenos Aires (Platts)--26Jun2006

Argentina has secured a $689 million credit from Brazil's National
Development Bank, BNDES, for projects to add 20 million cu m/d of capacity to
its natural gas pipeline system, Argentine Planning Minister Julio De Vido
said Monday.

He made the announcement at a ceremony to sign 1.05 billion pesos ($341
million) in contracts for the expansion of a power transmission line in the
north. The credit will go to a 4.5 billion peso project to expand capacity of
the privately run gas pipeline system over the next three years. The project
involves laying 1.02 million km (about 634,000 miles) of pipes and installing
and refurbishing compressors to add 67,000 horsepower to the system, the
government announced in April this year. The added capacity will make it
possible for producers to get more gas to market, helping alleviate
bottlenecks that are threatening the slow the economy.

Argentina produces 140 million cu m/d of gas but only has 126 million cu
m/d of pipeline capacity. It exports the excess to Brazil, Chile and Uruguay.
Some analysts say another 30 million cu m/d of pipeline capacity is needed on
top of the 20 million that is going to be added. De Vido added that there
would be "important announcements about the construction of the Northeast
Pipeline" at a meeting between Argentine President Nestor Kirchner and his
Bolivian counterpart Evo Morales on Thursday.

Argentina wants to build the $1 billion Northeast Pipeline to import
around 20 million cu m/d of additional gas from Bolivia. It is currently
importing 7.7 million cu m/d under a contract that expires at the end of 2006,
helping to meet domestic demand.

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