Argentina's Natural-Gas-Export Restrictions Could Force Brazilian Thermoelectric Plant to Shut Down

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Researched by Industrial Info Resources (Sugar Land, Texas)--The 275-mile, 100 million-standard-cubic-feet-per-day Parana-Uruguaiana natural gas pipeline, which connects the TGN network (TGN Buenos Aires) in Aldea Brasilera, Parana, in Argentina with Uruguaiana in Brazil, has supplied natural gas to the Uruguaiana Thermoelectric Station since July 2000. Since 2004, Argentina's national government has been imposing regulatory natural-gas-export measures, which have affected the operations at the plant and could force it to close down.

The restrictions on natural gas exports stated by Law 24076, which defines the regulatory framework for the sector, establish that the authorization to export is subject to the priority of ensuring the domestic market supply. In this regard, the natural gas exports rationalization program, created by the Energy Secretariat at the end of March 2004, established a temporary restriction schedule to external natural gas sales. Such restrictions are to be applied if natural gas production is equal to or less than domestic demand. For example, Argentina, a net exporter of natural gas to Chile, repeatedly reduced natural gas exports to the neighboring country in order to provide for domestic demand.

In this context, the government reacted with a number of short- and medium-term measures in order to avoid gas shortages in the residential sector, as well as in industrial and thermal plants, and gas exports have already been restricted from May to September 2008. If these impositions continue to be implemented, drastic measures could be taken, such as the shutdown of the Uruguaiana plant.

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