First Argentine gas flows to Uruguay through Southern Cross system

By OGJ editors

HOUSTON, Nov. 25 -- First natural gas from Argentina commenced flowing Nov. 8 through the $160 million Gaqsoducto Cruz del Sur (GCDS), or Southern Cross pipeline. BG Group operates the pipeline under a 30-year concession agreement awarded by the Uruguay government in March 1999.

Uruguay's state electricity utility, UTE, will serve as the primary customer for the gas, which it will burn in its power plant at Montevideo. UTE signed a long-term gas sales and supply agreement with Pan American Energy LLC and Wintershall AG. Later, the capital's local distribution company, Gazeba Uruguay SA, and Conecta SA, the distribution company for the rest of the country, are expected to become customers for the gas and therefore use less manufactured gas and LPG.

The 193 km, high-pressure GCDS system has the capacity to deliver 5 million cu m/day. The system also includes 200 km of low-pressure laterals, of varying diameters, and 28 aboveground installations. A separate 40 km, 18-in. line—known as the "Link"—was completed in April at a cost of $18 million. The Link connects the start of GCDS pipeline in Argentina with the Argentine national grid.

BG holds 40% interest in the system. Other partners are Pan American 30%, Uruguayan state oil firm Administration Nacional de Combustibles, Alcohol y Portland, (Ancap) 20%, and Wintershall 10%.

"As well as fulfilling a key economic need for the markets of Montevideo, the pipeline is a remarkable new example of cross-border infrastructure projects," said BG Executive Vice-Pres., South America, Rick Waddell.

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