Argentina launches gas line across Strait of Magellan

Argentina has launched a $314 million, 37.7-km natural gas pipeline across the Strait of Magellan, linking Cabo Espiritu Santo in Tierra del Fuego province with Cabo Vírgenes in Santa Cruz province.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Mar. 16 -- Argentina has launched a $314 million, 37.7-km natural gas pipeline across the Strait of Magellan, linking Cabo Espiritu Santo in Tierra del Fuego province with Cabo Vírgenes in Santa Cruz province.

The new line “allows us to give more gas to homes and also to the country's industry,” said Argentine President Cristina Fernandez de Kirchner, adding that the project is the country’s “most important gas project in the past 32 years.”

The new pipeline was built as an expansion to the existing San Martin pipeline in an effort by the government to increase gas supplies from Tierra del Fuego to the Argentinean mainland.

Buenos Aires hopes the new line will help boost gas production after 6 years of shortages and tight supplies. Argentina’s gas production fell by 7.3% to 132.6 million cu m/day in 2009 from 143.1 million cu m/day in 2004.

In particular, officials believe the new pipeline will permit the start-up or restart of operations at gas fields by a consortium comprised of Total SA, Wintershall, and Pan American Energy, including the onshore Ara and Canadon Alfa fields as well as Hidra, Kaus, Argo, Carina, and Aries fields offshore.

Argentina’s planning minister Julio De Vido said the new line initially will begin transporting 5.5 million cu m/day in June, with an additional 2 million cu m/day coming online in early 2011. Together, the two pipelines will provide 18.5 million cu m/day in 2011—an increase of nearly 70% over the current 11 million cu m/d.

Analyst IHS Global Insight was upbeat about the new line, saying that Argentina “has periodically suffered gas supply disruptions in recent years and increasing investments in production and new pipelines are regarded as the key to improving the situation.”

Contact Eric Watkins at hippalus@yahoo.com.

More in Pipelines