Implementation of the Uruguaiana-Porto Alegre gas pipeline returns to the agenda

The meeting in Buenos Aires between the presidents of Brazil, Luiz Inácio Lula da Silva, and Argentina, Alberto Fernández, among other topics, served to discuss the possibility of taking shale gas (also called shale gas) from the deposit known as Vaca Muerta for Brazil. These initial conversations rekindled the prospect of resuming a project that had been debated since the beginning of this century in Rio Grande do Sul: the construction of a gas pipeline linking the border town of Uruguaiana to Porto Alegre.

Fernández confirmed this Monday (23) that the issue of gas was discussed with Lula and his team. The Argentine president classified the meeting as “sensational” and stated that he was sure that the governments were advancing at a deeper level than before. “Our rapprochement will last for decades”, he predicted. The Vaca Muerta reserve is located in the provinces of Neuquén and Mendoza and to carry out the gas flow, the implementation of the Néstor Kirchner gas pipeline is planned.

This structure, approximately 1,000 kilometers long, will make it possible to transport the fuel from its origin to San Jerónimo, in the province of Santa Fé. A piece of news from December of last year informed that the Bndes would contribute with the financing of US$ 689 million for this work, but the Brazilian bank claims that there is no consultation regarding this action. However, in Argentina, Lula mentioned the Bndes when talking about possible ways to finance the Néstor Kirchner gas pipeline.

“If there is interest from businessmen, if there is interest from the government and we have a development bank for that, I want to say that we are going to create the conditions to make the financing that we can do to help the Argentine gas pipeline”, declared the president Brazilian to journalists at Casa Rosada. He added that “from time to time we are criticized for pure ignorance, people who think that there cannot be funding for other countries. I think not only that it can, but that Brazil needs to help all its partners”.

The issue is of particular interest to Rio Grande do Sul since, regarding the export of gas to Brazil, a logistical possibility is that its entry into the country takes place through the State, through Uruguaiana, where a gas pipeline arrives to feed the thermoelectric plant installed in the municipality. With the construction of the Néstor Kirchner gas pipeline to the gas compressor plant located in San Jerónimo, it would be possible, through the existing network, to reach Uruguaiana, covering a distance of about 450 kilometers.

From the city of Rio Grande do Sul, it would be necessary to implement a new gas pipeline, making the connection to the metropolitan region of Porto Alegre, which would allow the connection with the existing network in Brazil. The rights to implement this project, known as the Uruguaiana-Porto Alegre gas pipeline, belong to the company Transportadora Sulbrasileira de Gás (TSB).

“Today, Argentina has gas, the question is to transport this gas”, emphasizes the general director of TSB, Walter Farioli. He details that, in addition to the connection option through the West Frontier of Rio Grande do Sul, there are other alternatives for the input to enter Brazil. One is for the gas from Vaca Muerta to flow to the LNG terminal in Bahía Blanca, where the fuel would be transformed into liquid and exported by ships. Another way would be investments in gas pipelines in the north of Argentina so that the gas enters Bolivia and comes to Brazil through this other neighboring country.

For Farioli, it is possible to reconcile all these hypotheses. “We call it flexibility in the industry”, says the TSB director. The maximum capacity of the Uruguaiana-Porto Alegre gas pipeline would be up to 15 million cubic meters per day and the total investment is currently estimated at between US$ 1 billion and US$ 1.2 billion. The executive adds that the supplied volume of gas would increase over the years, starting at something between 5.5 million and 6 million cubic meters per day. According to Farioli, from the beginning of the works it would take around two years to complete them.

The structure in Rio Grande do Sul would be around 600 kilometers long and important Rio Grande do Sul cities would be in the area of ​​influence of this gas pipeline, such as Uruguaiana, Alegrete, Santa Maria, Santa Cruz do Sul, Triunfo and the Capital. The director of TSB points out that it is very important for governments to participate in long-term infrastructure undertakings that demand large investments. Proof of Argentina’s and Brazil’s interest in moving forward on this issue was the statement by the Secretary for the Americas at the Ministry of Foreign Affairs of the Brazilian government, Ambassador Michel Arslanian Neto. “What there is is a very clear purpose of the teams from the two countries (Brazil and Argentina), with the impetus at the highest level, to advance in themes such as energy integration and, clearly, gas integration”, highlighted Arslanian Neto.

* With State Agency.

The entire Uruguaiana-Porto gas pipeline project covers three sections, the first and third of which are already in operation. The first is a pipeline that crosses the Uruguay River, coming from the connection with Argentina, goes around Uruguaiana to the gas delivery point for the thermoelectric plant in the municipality (this final segment, of a few kilometers, until the plant is the responsibility of from the Sulgás distributor). The third stretch is located on the outskirts of the Alberto Pasqualini refinery (Refap), in Canoas, where the TSB gas pipeline connects with the Transportadora Brasileira Gasoduto Bolivia-Brasil (TBG), which brings gas from Bolivia. TSB takes this gas and transports it to the Triunfo petrochemical complex, where Sulgás distributes it to the companies in this complex.

Section two is just what remains to be done, with almost 600 kilometers in length, to complete the connection. The two stretches currently in operation are each about 25 kilometers long. One end in Uruguaiana and the other covering the cities of Canoas, Nova Santa Rita and Triunfo (that is, despite the project as a whole being known as the Uruguaiana-Porto Alegre gas pipeline, it does not pass directly through the capital of Rio Grande do Sul).

If the third section of the gas pipeline is completed, the director of MaxiQuim Assessoria de Market, João Luiz Zuñeda, argues that the increase in gas supply in Rio Grande do Sul could contribute to the development of several other undertakings. One of these possible initiatives, points out the consultant, would be the expansion of the petrochemical complex in Triunfo.

Zuñeda considers that the participation of the private sector, and not just state-owned companies, in expanding the gas pipeline network would be essential to provide stability to projects within Mercosur. “Governments change”, warns the director of MaxiQuim. Despite the prospects for the entry of imported gas, Zuñeda adds that there will also be pressure to take advantage of pre-salt production in Brazil.

In turn, the director of the consultancy ES-Petro, Edson Silva, adds that, even with the expectation of exploring national reserves, gas from Vaca Muerta can be competitive in the Brazilian market. He recalls that the cost of bringing gas from the pre-salt layer, which is on the high seas, is high. “There is a change in the natural gas market taking place in South America”, emphasizes Silva.

According to the director of ES-Petro, Vaca Muerta represents one of the largest gas reserves in the world and at an affordable exploration cost. The financial challenge is precisely to enable the transport of these resources. He points out that the Uruguaiana-Porto Alegre gas pipeline is inserted in this context, which also involves security and the region’s energy transition.