Argentina's Oldelval invests $750 million in Vaca Muerta pipeline to boost exports

Argentina’s Oldelval invests $750 million in Vaca Muerta pipeline to boost exports

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BUENOS AIRES, Sep 16 (Reuters) – Argentina’s Oleoductos del Valle (Oldelval) oil pipeline operator is investing $750 million to double the capacity of the Vaca Muerta shale formation, the country’s energy ministry said Friday, hoping to boost exports and boost dollar reserves.

Oldelval aims to increase capacity to 72,000 cubic meters per day from 36,000 cubic meters in two years, a project that will require another 525 km (326 miles) of pipes to be laid and 1,200 jobs created, the ministry said.

This could boost Argentina’s total oil exports to 250,000 barrels per day, with Vaca Muerta currently ranked second in the world in shale gas reserves and fourth in shale oil reserves, according to Energy Department estimates.

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“This project will allow us to double our transportation capacity and allow the country to generate between $4 billion and $6.5 billion,” said Ricardo Josel, CEO of Oldelval.

“This is a very important investment for the company and a great opportunity to increase crude oil exports,” Energy Minister Flavia Royon added.

Argentina, which faces a significant deficit in its energy trade, is now betting on becoming a key energy exporter, helped by the vast Vaca Muerta shale reserves in the province of Neuquén.

The announcement came after the government approved a 10-year extension for Oldelval to operate the pipelines from the Neuquen Basin to Vaca Muerta until 2037.

The government is also planning to start building a gas pipeline that will link Vaca Muerta with the capital Buenos Aires in the coming weeks.

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Reporting by Eliana Rashevsky; Writing by Sara Morland; editing by Jonathan Oatis

Our standards: Thomson Reuters Trust Principles.

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