By means of Resolution No. 437/19 (the “Resolution”), the Secretary of Government of Energy (the “SGE”) has called for a public bidding procedure for purposes of awarding a new natural gas transport license (the “License”). This new infrastructure project entails the design and construction of a natural gas pipeline that will: (i) connect a facility located in the Neuquén’s Subzone with another facility located in the city of Salliqueló, Province of Buenos Aires; and (ii) interconnect the Salliqueló’s facility with TGN’s gas transportation system in a spot near the city of San Nicolás, Province of Buenos Aires. This new transportation system has been officially named as Transporte Gas del Centro (the “Project”).

The Resolution also approved the definitive version of the bidding terms and conditions (the “Terms and Conditions”) and its annexes. Finally, the Resolution scheduled the submission of bids date on September 12th, 2019.

Below are the Terms and Conditions’ most important aspects:

(a) Required Works

The Project includes:

(1) Phase 1: construction of 570 km of a 36 inch pipeline with an initial capacity of 15 MMm3/day of natural gas (9.300 kcal/m3) and a future minimum capacity of 40 MMm3/day, which will connect a gas facility located near Tratayén, Neuquén, with a facility located near to the city of Saliquelló, Buenos Aires (“Phase 1”); and

(2) Phase 2: construction of 470 km of a 30 inch pipeline with a minimum capacity of 20 MMm3/day of natural gas (9,300 kcal/m3) which will connect the facility located near city of Saliquello, Buenos Aires with a gas pipeline located near the city of San Nicolás de los Arroyos, Buenos Aires (the “Phase 2”).

(b) Schedule (main milestones and occurrence expected time pursuant to the Terms and Conditions)

Milestone Expected Date
Consultation Period Until August 29th
Publishing by the SGE of circular letters (amendment and clarification) Until September 5th
Bids’ Submission September 12th
Offers’ Opening September 12th
Offers Assessment September 26th
Bids’ Qualification October 3rd
Economic Offer’s Opening October 8th
Award Date October 21st
Execution of the License November 20th

Additionally, the following milestones, regarding the execution of the works, are scheduled (terms shall begin on the License’s execution date):

Milestone Phase 1 Phase 2
Presentation of the final project 2 months 42 months
Financial Close 6 months N/A
Partial Operation 18 months N/A
Commercial Operation 24 months 60 months

(c) Economic Offer: CAMMESA’s Transportation Agreement

Bidders must bid a monthly fee regarding the CAMMESA’s Transportation Agreement (as this term is defined below) for the contracted Phase 1’s transport capacity corresponding to 10 MMm3/day. The bidder proposing the lower amount shall be awarded.

Jointly with the execution of the License, the awardee shall execute the Offer Letter attached as Annex IV of the Terms and Conditions (“CAMMESA’s Transportation Agreement”).

(d) Financing provided by ANSES’ Guarantee

Fund Pursuant to the Terms and Conditions, the awardee is entitled to apply for a financing facility from ANSES’ Guarantee Fund. Main terms of the financing conditions are summarized below:

(1) Validity Term of the Financing Commitment¸ the first one to occur between:

  • Fourteen (14) months since the execution of the Commitment Letter by and between the ANSES and the SGE; or
  • Ten (10) months since the awarding date.

(2) Type of Titles: Securities issued under the Argentine Offer Public Regime.

(3) Maximum Amount: US Dollars four hundred million (USD 400,000,000).

(4) Securities’ Maturity: fourteen (14) years.

(5) Interest Rate: Linked to (i) sovereign yields for similar maturity terms; and (ii) Project’s risk.

For further information, please do not hesitate to contact either Nicolás Eliaschev or Javier Constanzó.