🇦🇷🇧🇷 Argentina and Brazil extend the agreement to export gas and energy

The agreement will be signed by the Secretary of Energy, Flavia Royón, and her Brazilian counterpart, Hailton Madureira de Almeida. The Argentine ambassador Daniel Scioli and representatives of Cammesa and the Foreign Ministry will also be part of the understanding. In 2021, Argentina exported electricity for US$1,000 million and so far in 2022 it has almost US$350 million in natural gas.

The Argentina and Brazil reached an agreement to regulate the exchange of Energy electric and natural gas between both countries. It is the update of the Energy Exchange Memorandum until 2025, an instrument that was about to expire. The agreement between both countries will be renewed automatically every four years. The signature of the instrument was agreed by the Secretary of Energy, Flavia Royonand the Vice Minister of Mines and Energy of Brazil, Hailton Madureira de Almeida.

Also part of the negotiations -and will be part of the signing of the agreement- the Argentine ambassador in the neighboring country, Daniel ScioliRepresentatives of Cammesathe company that manages the wholesale electricity market and the Chancellery Argentina.

Agreement

With the extension of the agreement, Argentina will continue to supply electricity and gas to Brazil. In 2021, Argentine exports of electrical energy represented more than US$ 1,000 million and so far in 2022 almost US$350 million of natural gas. For its part, this year Brazil “guaranteed the maximum capacity to supply electricity to our country at competitive priceswhich allowed significant savings in terms of the purchase of LNG imported through ships for power generation in our electrical network,” the Argentine Embassy in Brazil said in a statement.

The agreement allows the use of the Bilateral Payment System in Local Currenciesimplemented through the “Local Currency Payment System Agreement” between both countries, signed in September 2008.

Also, after signing, Brazil is expected to modernize the Garabí converter stationsthe infrastructure that ensures electrical interconnection, for more than 2,200 MW, located at the end of the high-voltage line that connects both countries between the Corrientes province and the state of Rio Grande do Sul.”In this way, the adequate operation of the converters is guaranteed for the next decade.”, affirmed the Argentine embassy.

Argentina currently supplies gas to Brazil through the connection between Paso de los Libres and the Thermal Power Plant located in Uruguaiana. After this agreement, it will also be guaranteed that the Argentine network will be available to channel gas to the thermal power plant “provided that at the same time the total supply of the Argentine internal market is ensured.”

Dead cow

Argentina could become a net exporter of gas from the development of the unconventional reserves of Vaca Muerta. Within this framework, the work of the Néstor Kirchner Gas Pipeline “will make the energy integration of Argentina and Brazil a reality, thanks to the fact that our country will be able to sell natural gas through the Bolivian network and the connection with the Uruguaiana Thermal Power Plant, balancing the trade balance between both countries”.

The company teams Argentine Energy (ENARSA)from the ministries of economy of Argentina and Brazil, the foreign ministries, the Argentine Embassy and the National Bank for Economic and Social Development of Brazil (BNDES) Negotiations are advancing to finalize the financing of the next stages of the pipeline.

“Vaca Muerta currently produces 44 MM m3/day of shale gas at very competitive prices and lower than the prices currently negotiated in the international market and has growth expectations to produce approximately almost 100 MM m3/day”, concludes the Argentine embassy.

🇦🇷🇧🇷 Argentina and Brazil extend the agreement to export gas and energy