Two international groups are speeding toward a collision in the race to develop a pipeline system to transport Argentine gas to markets in Chile.
The rivalry heated up again when each side said it had advanced its own proposal to lay an international gas pipeline for the purpose (OGJ, Aug. 14, Newsletter).
First, partners in the proposed Gasoducto Transandino (GT) project said they had approved funding to speed right-of-way acquisition for the pipeline and for full environmental impact studies in Chile and Argentina.
The decision was among the first made by GT's new board. It ratified the decision to go ahead with the group's proposed 750 mile main line and associated distribution system.
Units of Tenneco Gas and British Gas each own a 30% interest in the GT project, Chile's state owned Empresa Nacional de Petroleo (ENAP) and Argentina's YPF SA 10% each, and Argentine companies Astra, Bridas, Pluspetrol, and San Jorge 5% each.
Meantime, sponsors of the proposed GasAndes project let contracts worth a combined $220 million covering procurement and construction of a 290 mile main line to deliver gas from La Mora, Argentina, across the Andes Mountains to Santiago.
NOVA Gas International Ltd., Calgary, leader of the GasAndes group, said work specified by the contracts is to begin in October. NOVA is to supervise construction throughout the project.
Partners expect the system to begin transporting gas in mid-1997.
GT project
Ewell H. Muse III, president of GT and senior vice-president of Tenneco Gas International, said construction is to begin in April 1996 on the GT system, with gas to begin flowing in late 1997.
The 500 mile segment of the line from Argentina's Neuquen basin to Santiago will cost about $670 million. Full cost of the proposed GT project is an estimated $854 million, with $184 million to go for distribution.
Muse estimated GT's transportation service rates will be 5-7% less than those of GasAndes. That difference over 25 years would save shippers using the system about $350 million, while allowing GT group members to earn an acceptable return, Muse said.
In addition, he said, the GT group's proposal would serve more parts of Chile than the GasAndes plan and has the overwhelming support of Argentine producers.
GT planned to sign firm gas transportation contracts with three power companies, two of whom would be new players in Chile's power market. With each power company planning to build a 350,000 kw gas fired generating plant in Chile by 1999, those three contracts alone could account for as much as 40% of the gas to be supplied by the GT pipeline system.
GT also planned to sign firm transportation contracts with 200 industrial gas users and companies sponsoring nine power plant projects. Their combined volumes could amount to as much as 60% of system capacity.
GT's newly formed board includes four representatives of Tenneco Gas, three of British Gas, one of ENAP, one of YPF, and two of other Argentine gas producers.
Tenneco Gas and British Gas also said they will become 50-50 partners in Gas de Chile (GDC), a Chilean distribution company to serve residential, industrial, and commercial gas customers. GDC intends to form local partnerships as the GT project progresses.
GasAndes project
NOVA owns a 40% interest in the proposed GasAndes main line. It also holds a 15% interest in a $235 million power station to be built at Renca, Chile, near Santiago, by Chilgener, the country's second largest power generator (OGJ, July 31, p. 30).
Other members of the GasAndes group are Argentine steel and construction conglomerate Techint; Argentine oil, gas, and transportation company Cia. General de Combustible; Gasco, a Chilean local gas distribution company with investments in Argentina; Chilean industrial conglomerate Copec; Duke Power, a North Carolina power company; and Lone Star Gas Co., Dallas.
Techint and McKee del Plata, both of Argentina, are to handle construction of the 24 in., 350 MMcfd main line. SIAT SA, associated with Confab Tubos del Brasil, will supply line pipe.
Techint and McKee recently took part in construction and pipe supply for an oil line between the Argentine states of Neuquen and Conception. The firms also were involved in construction of a 375,000 kw power plant at Loma de la Lata and a compressor station at La Mora.
GasAndes sponsors last month said they had signed firm transportation contracts with shippers for more than 350 MMcfd of gas, 100% of initial capacity.
Main line of the $900 million GasAndes project will link in Argentina with the Transportadora de Gas del Norte by way of a $90 million upgrade. Officials plan a $115 million upgrade in Chile to connect the international main line with Santiago's gas distribution system. n
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