FocusArgentina wary of new gas, energy woes

20 May 2008 23:15  [Source: ICIS news]

By Cristina Kroll

BUENOS AIRES (ICIS news)--Argentina is implementing different initiatives to avoid an energy shortage that affected the country in the most recent South American winter, but the industry remains wary of a the risk of rationing gas and electricity, sources said on Tuesday.

“Let's not forget than the last Southern Hemisphere winter it snowed in Buenos Aires, and the unusual cold weather caused gas shortage for the petrochemical industry. So, the government is in lucky with this ‘summer during the winter’, with temperatures of 31ºC (87.8ºF) in the middle of the autumn,” an industry source told ICIS.

Seasons in the Southern Hemisphere are generally the reverse of those in the Northern Hemisphere, with winter about to begin in June.

A source from a company at the Zarate Campana petrochemical complex affirmed that gas was cut for a few hours already this year. While minimal, the incident raised the spectre of a production-stopping energy shortage.

In 2007 a nationwide gas shortage affected the Zarate Campana petrochemical complex when gas was rationed for 110 days. During 2006 the same problem occurred for 50 days.

Repsol YPF plans to bring 8m m3/day of liquefied natural gas (LNG) to the port of Bahia Blanca, in the Buenos Aires Province, on a LNG re-gasification ship. LNG is of no use for petrochemical feedstock but can be used to supply electricity and eases demand on methane from other sources.

The idea is to replace Bolivian gas with LNG imported from Trinidad and Tobago. Bolivia has vowed to supply its neighbours Brazil and Argentina, but tight supply has raised concerns in both countries.

The LNG project has been challenged in court over risk management.

Gerardo Rabinovich, director of the technical department of the Argentina Energy Institute, said that “first of all the ship has to arrive, and then we need to see if it works, for legal and technical reasons”.

However, in spite of Argentina's initiatives to raise the local energy supply, some experts believe the problem will continue: “When the first cold days arrive, the gas shortage for the industry will be a sure thing,” Rabinovich said.

A new gas turbine was inaugurated today by the president of Argentina, Cristina Fernandez de Kirchner, at the Manuel Belgrano thermo-electric power plant located in Campana, Buenos Aires province.

This turbine will generate 271 megawatts (MW) of electricity.

“This new supply of electricity, without a doubt, brings extra support for the petrochemical industry,” an industry source said.

However, not all experts agree: “This is a formal inauguration, but the turbine won’t be functioning by at least three months,” Rabinovich said.

Another gas turbine had been already started in that power plant on 18 March. Together the two turbines will generate 550 MW.

By March 2009 the inauguration of a third turbine at the Manuel Belgrano power station would generate a total of 823 MW.

Fernandez de Kirchner in the next few weeks plans to open three turbines in Timbues, Santa Fe province, where the San Martin thermo-electric power plant is being built.

These two initiatives required an estimated investment of $1.18 bn (€755m).

($1=€0.64)

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By: Cristina Kroll
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