By Facundo Iglesia and Martina Jaureguy
The first of three tranches of the Néstor Kirchner gas pipeline was officially launched today in Salliqueló, Buenos Aires province. At the inauguration, President Alberto Fernández, Vice President Cristina Fernández de Kirchner, and Economy Minister Sergio Massa celebrated the economic boost it will provide Argentina.
“Argentina will go from having a foreign deficit because of having to import energy, to being a country with a surplus in its trade balance, because we are doing the necessary public works to definitively change that equation,” said Massa, who is the ruling coalition Unión por la Patria (UxP)’s presidential candidate. He contended that electricity will be cheaper thanks to the pipeline as of next year.
“We will no longer import gas in ships because we’ll use the gas in our subsoil,” he said.
The date the government chose for the event was not coincidental — July 9th is Argentina’s Independence Day, which the president alluded to in his speech.
“Destiny has allowed me, ironically, to declare Argentina’s energy independence here in the province of Buenos Aires on this Independence Day,” said President Fernández. “With these 573 kilometers of pipeline, we are recovering our energy sovereignty and it’s a personal satisfaction to me. We did it. The biggest public work our democracy would remember.”
“Today is one of those days in which we have to be proud to be Argentine, [despite] all those who say that Argentina is a country of frustration, failure, without a future,” Massa said. “Despite the obstacles, despite that they wanted to condemn us to be a dependent country, we have what it takes to build sovereignty.”
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“We want to export, but we also want gas and oil for our industries, to make them more competitive,” said Kirchner, while adding that they also aim to provide gas to Argentine homes. “It’s not fair that while having the second biggest gas reserve in the world, they are charging us international prices,” she said, referring to import prices.
The vice president also gave Massa her explicit support. “I want to thank you, Sergio, for all the effort you put in [the construction of] the pipeline, but also for all your efforts since you became minister. You took office in a very difficult moment, and you never wavered”.
“Everyone who wants to rule Argentina has to know that people may criticize you or worse if you make decisions that benefit the country, but it’s worth laying in bed at night and knowing that you’ve done what you had to do,” she said, her voice cracking.
The 573-kilometer-long pipeline’s path starts at the gas treatment plant in Tratayén, Neuquén, which is located at the heart of the Vaca Muerta shale oil and shale gas deposit. It then goes through the provinces of Río Negro and La Pampa, all the way to the town of Salliqueló in Buenos Aires province.
Work on the pipeline started in August 2022. The last of over 47,700 pipes was welded on May 12, each 12 meters long, and the filling-up process started a week later — a significantly shorter time than originally calculated.
Argentina is set to save US$1.7 billion in gas imports with the pipeline for the rest of 2023, according to official figures. Savings will grow to US$4.2 billion for the whole of 2024, by replacing liquefied natural gas, gas from Bolivia, and liquid fuel imports, while increasing the availability of gas at competitive prices for industry, businesses, and homes.
The first tranche of the pipeline was built by companies Techint and SACDE, and 25% of it was financed by a one-time tax on large fortunes passed in December 2020. Its approximate cost was AR$423 billion.
Vaca Muerta is the fourth-largest shale oil reservoir in the world and the second-largest shale gas reservoir. According to a report published today by the CEPA research center, Vaca Muerta holds 16 trillion barrels of oil, representing 94 years of domestic consumption in Argentina, and 308 trillion cubic feet — or 193 years of domestic consumption.
“This volume of resources would not only allow us to make up for the decline in conventional production but also to reverse the energy trade balance: to move from a model of energy imports to self-sufficiency and export capacity,” the report said.
Massa announced that the government will start the bidding stage of the second tranche in September, which will continue on the same route for another 467 kilometers from Salliqueló, in Buenos Aires province, to San Jerónimo, in southern Santa Fe province.