Néstor Kirchner gas pipeline: delegation heads to Brazil to secure natural gas sales

Ambassador Daniel Scioli and Energy Secretary Flavia Royón will chair a meeting with the governor of Rio Grande do Sul state, the potential entry point for the pipeline 

A delegation of the Secretariat of Energy will travel to Brazil this week with the goal of speeding up the process of bilateral energy integration. They are expected to meet Eduardo Leite, governor of Rio Grande do Sul state, a particularly relevant territory as it is both the potential entry point for the Néstor Kirchner gas pipeline, and a main destination of local exports. Officials estimate that natural gas sales to Brazil may reverse the long-time commercial deficit in the country’s bilateral trade balance. 

Argentine ambassador in Brazil Daniel Scioli is currently looking to speed up the diplomatic agreement president Alberto Fernández signed with Lula da Silva earlier this year, which includes initiatives in more than a dozen areas. In this context, he will meet officials and businessmen, with energy integration as one of the key points of his agenda. 

Argentina and Brazil have been negotiating the construction of the second section of the Néstor Kirchner gas pipeline for years, which would allow exporting gas from Vaca Muerta to the southern part of the neighboring country. Late last year, the Secretary of Energy Flavia Royón said Brazil’s National Bank of Development would grant a US$ 689 million credit line to finance steel imports required for the works. The Andean Development Corporation will add another US$ 540 million to speed up the initiative. 

Apart from the construction of the pipeline’s second section, the goal right now is to secure natural gas sales to Brazil. 

Despite claims from local producers, Lula’s Minister of Economy Fernando Haddad confirmed their intention to buy gas from Argentina. 

“With the drop of gas production in Bolivia, Brazil’s demand will be active, even if it uses its pre-salt layer production,”  said Haddad a few days ago when asked about the tensions that emerged around the issue. “So, financing the steel industry in Brazil in order to build a pipeline, with natural gas as a security, is not a contradiction.”

Diplomat sources said that gas sales to Brazil may result in an export growth in the mid-term, which could reverse the deficit in the bilateral trade balance, which has averaged US$ 3.5 billion in the last decade.  

Intense schedule

Scioli, who announced his presidential run a few days ago, will also meet with Misiones provincial governor Oscar Herrera Ahuad, and both of them will also meet with local business groups. The Misiones delegation will present the Silicon Misiones project, which has been ongoing for the past two years, hence in this case the interest is focused on the science and technology chapter of the agreement both countries recently signed.  

Afterwards, the ambassador will meet Itamaraty officials from the Brazilian ministries of Education, Transport, and Energy to address different projects that aim to promote bilateral trade. He will also meet representatives of companies such as John Deere, Treves and Lomaplast, which have investment projects. 

Finally, he will travel to Mendoza to participate in the National Harvest Festival alongside Brazilian corporate buyers of Argentine wine. They will participate in business rounds with their Argentine peers and meet Mendoza governor Rodolfo Suárez. 

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