Brazil will use Argentine pipelines to import gas from Bolivia

Presidents Argentina and Brazil, Mauricio Macri and Jair Bolsonaro, have today motorized the signing of various energy agreements, on the occasion of the visit of the Brazilian leader to Buenos Aires.

The Secretary of Energy, Gustavo Lopetegui, signed with the Minister of Mines and Energy of Brazil, Bento Albuquerque, a Protocol of agreement (MDE or MOU) on the energy exchange.

The most important thing, despite the business opportunities, is that Brazil will use Argentine pipelines to import gas from Bolivia.

So prevent a complex and expensive transportation enter Santa Cruz de la Sierra and San Pablo until it reaches the southern tip of the country.

In addition to Bolivian gas, Brazil also buys gas from Argentina, produced in Dead cow.

This opens up for oil companies the possibility of find the demand for gas that produce and must not close the injection in conventional wells.

In addition, the Argentine Chancellor, Jorge Faurie, signed with the Brazilian duo Ernesto Araújo, in the joint declaration on nuclear policy, on the occasion of the 25th anniversary of the entry into force of the tripartite agreement signed in 1979 by the two countries.

Faurie also agreed with Araujo on a memorandum of understanding on Cooperation in the field of bioenergyincluding biofuels.

The chronicler granted exclusive access to the two Energy Memoranda.

Energy integration

As part of this memorandum, Brazil will import gas from Bolivia through the Argentine pipelines and will pay for the costs that this generates.

Like Argentina, Brazil has a gas import contract with Bolivia. The product will leave Santa Cruz de la Sierra and will enter Argentina through Campo Durán, in Salta, where the Northern Pipeline was born, which operates the Transportadora de Gas del Norte (TGN).

This pipe is spreading through 1454 kilometers from the San Jerónimo compression plant, in Santa Fe.

From there, he was born another branch of the system, which is 200 kilometers from the city of Santa Fe, crosses the river and ends in Paraná, Between the rivers.

In Brazilian villageThe TGM pipeline (Gas Transport del Mercosur) was born and connects Brazil to 437 kilometers in Uruguayana.

According to the letter of agreement, "it's convenient" power supply gas to the thermal power station located in the municipality of Uruguaiana (UTE Uruguaiana), in the state of Rio Grande do Sul, "which is currently inactive due to lack of fuel".

If it is essential that the Uruguaiana thermal power plant be turned on, the Ministry of Mines and Energy of Brazil will inform the Argentine Energy Secretariat in advance.

This body "will allow, within the limits provided for by local regulations, to free transit of Brazilian natural gas in the Argentine natural gas transmission system to the point of interconnection located between the towns of Paso de los Libres (Corrientes) and Uruguaiana.

The energy supply of UTE Uruguaiana, which is operated by the company AES, will benefit both countries.

The portfolio led by Lopetegui has been committed "study the modification of the methodology for calculating the badociated costs the free transit of natural gas on Argentine territory, including the amount invoiced for the regasification system, the transport tariffs and the volume of gas used in the natural gas transmission system ".

Argentina will allow this operation as long as the security of domestic supply is not compromised.

If, as a result of this operation, local thermal power plants were to use liquid fuels (diesel or fuel) for its operation, Brazil has promised to cover the additional costs.

In addition, Argentina and Brazil will exchange electricity not only in emergency situations, but also surplus export.

Brazil has an electrical matrix very dependent on the hydroelectric dams; in the event of prolonged drought, their supply is in danger (for this reason, in recent years, they have advanced by investing in renewable energies).

The price of gasoline in the neighboring country is very high. In the San Pablo industrial belt, gas can cost more than $ 10 per million BTU (MMBTU) at certain times of the year.

Argentine electricity can meet the production needs of Brazil.

At the same time, Importation of electricity from Brazil will allow Argentina – a country dependent on gas – replace fossil fuel purchases abroad like liquefied gas (LNG), diesel and fuel oil, more expensive.

The supply of electrical energy "will be carried out provided that it does not compromise the Brazilian and / or Argentine energy security", and after taking "the necessary measures to avoid generating additional costs for the sectoral agents and for the reduction of consumption costs. "

The maximum to exchangebecause of the existing infrastructure, it is 2100 MW of power, by the Garabí frequency converter or the Uruguaiana frequency converter.

bioenergy

The second memorandum it was about bioenergy and biofuels, Where there is less certainties and more demonstrations of will.

"This memorandum of understanding expresses the willingness of both states to cooperate in the field of bioenergy, including biofuels," the agreement says.

Argentina and Brazil agreed to "make every effort to promote the production and use of bioenergy, including biofuels, in both countries and their entry into international markets".

The two most important countries of South America exchange information on the production and use of biofuels and cooperate to "promote the use of bioenergy technologies, including bioelectricity cogeneration from agricultural and agro-industrial wastes, and the production of liquid biofuels".

In addition, they will promote a "Facilitation and promotion of cooperation with the automotive industry and other relevant end-use technologies to promote the efficient use of biofuelsincluding the use of bioethanol and biodiesel; as well as possible developments in the field of sustainable biofuels for air and maritime transport ".

In the absence of concrete and tangible initiatives, Argentina and Brazil have agreed to form a Work group Interdepartmental

The most ambitious idea is to converge technical standards and percentages of biofuel blends in gasoline and diesel, where Argentina is lagging behind.

Last week, Lopetegui He let his work transcend Cordoba rejection of greater involvement of biofuelsbecause they are exempt from taxes or have a favorable tax policy, represent a "cost of taxes for a broken nation"

These statements led to the angry producers, expressed in a statement of Argentine sugar center.

Hydroelectric dams

In the meantime, and as announced The chronicler, Argentina and Brazil will promote Joint Technical Commission for the Utilization of Shared Water Resources of the Uruguay River, which will focus on defining the opportunity and mechanisms to deepen the required studies.

In particular, the Feasibility studies build dams Garabí and Panambíit would cost about u $ s 5100 million.

Itamaraty (Brazilian Ministry of Foreign Affairs) release is vague and evasive, mainly because there was no agreement between Bolsonaro and Macri on this point.

Brazil is much more interested than Argentina and Bolsonaro he let her know (and what left exposed) in Macri at the press conference at Casa Rosada.