Lenders Explore Financing for TGS' NGL Export Project in Argentina's Vaca Muerta

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

Major international lenders are working on a financing package for part of TGS' new export project in Argentina, with total investments projected at US$3 billion. The NGL export project is expected to produce 2.8 million tons per year of NGLs and generate US$1.2 billion in exports annually.

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NGL Export Project

Santander, Citigroup, and JPMorgan are among the international lenders working on a roughly US$1 billion financing package for Transportadora de Gas del Sur's (TGS) new natural gas liquids (NGLs) export project in Argentina's Vaca Muerta, according to Bloomberg. The project could add 2.8 million metric tons per year of NGLs and generate US$1.2 billion in exports annually.

If moved forward, the financing package would cover more than 30% of the projected US$3 billion that the overall project is expected to cost. According to Industrial Info Resources data, 11 related projects being tracked by IIR have an investment value of US$1.55 billion.

TGS plans to expand its current infrastructure to develop the Vaca Muerta Natural Gas Liquids Export Terminal project, spanning from Tratayen in Neuquen to Bahia Blanca in Buenos Aires. The project comprises the expansion of the current infrastructure and the addition of new assets to develop an export terminal with a forecasted construction time of 45 months.

First, the project will include the expansion of the Tratayen Gas Treatment plant from 28 million cubic meters per day (m3/d) to more than 40 million m3/d by adding two new processing modules.

The processed gas will be transported through a new 573-kilometer pipeline from Tratayen in Neuquen province to Cerri Complex/Bahia Blanca on the Atlantic Coast.

On the coast, TGS will construct and install a fractionation plant--developed in two phases--at the company's existing natural gas processing plant in Cerri.

Finally, the project also includes the expansion of product storage in Bahía Blanca and complementary maritime terminal works for exports at Puerto Galvan.

Upon completion, TGS expects the project will produce 2.8 million tons of NGLs annually, generate approximately US$1.2 billion in exports per year, and create 4,000 direct jobs.

Industrial Info Resources offers more information on the project in its Global Market Intelligence (GMI) Oil & Gas Production and Pipeline project databases, where readers can find details--including construction schedules, investment values and necessary equipment--in detailed project reports.

According to Marcelo Mindlin, chairman of Pampa Energía and co-controlling shareholder of TGS, Argentina has not completed a liquids-processing project in more than 25 years. He described the development as the largest of its kind in the country's history and as a key investment for addressing a bottleneck that could constrain Vaca Muerta's growth.

Growing Midstream Capacity

The natural gas liquids project is one among several initiatives to expand Argentina's midstream capacity and develop export terminals. Companies such as YPF, Golar LNG, ENI and XRG have announced additional liquefied natural gas (LNG) export projects, including Southern Energy and Argentina LNG, to facilitate exports from Vaca Muerta's growing shale production and reinforce Argentina's role as an exporter.

Besides LNG terminals, the South American nation has also seen the development of key midstream infrastructure, such as the Perito Moreno or the reversal of the Gasoducto Norte pipelines, to transport Vaca Muerta's natural gas production northbound domestically, with the capacity to further export it via pipeline to Bolivia.

Growing Oil & Gas Production

These midstream projects emerge as Vaca Muerta's shale gas output continues to grow. According to the Secretary of Energy, Argentina's shale gas production from Vaca Muerta expanded from 1.1% of total output in 2014 to 53.2% by 2025.

In 2025, the South American nation produced 141.37 million m3/d of natural gas, the highest going back to at least 2009.

Key Takeaways

• Santander, Citi and JP Morgan are working to finance part of TGS' NGL project.
• The project includes expanding gas and fractionation plants, a new pipeline, and an export terminal.
• Vaca Muerta's increasing production drives midstream infrastructure growth.

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).