Enactment of the “Bases and Starting Points for the Freedom of Argentinians” Law
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New Business Opportunities with a Game-Changer Law
The Argentine National Congress has recently passed the law named “Bases and Starting Points for the Freedom of Argentinians” (“Bases Law”). With respect to the potential business opportunities that may arise from the enactment of the Bases Law, we highlight the following:
- Privatization of State-Owned Companies: The Bases Law declares subject to privatization the following companies of total or majority state ownership: (i) Energía Argentina S.A.; (ii) Intercargo S.A.U.; (iii) Aguas y Saneamiento Argentino S.A.; (iv) Belgrano Cargas y Logística S.A.; (v) Sociedad Operadora Ferroviaria S.E. (SOFSE); (vi) Corredores Viales S.A., (vii) Nucleoelétrica Argentina S.A.; y (viii) Yacimiento Carboníferos Río Turbio (YCRT).
- Investments Incentive Regime (“RIGI”): The RIGI represents the most significant initiative proposed by the National Executive Branch for the purpose of encouraging and promoting foreign and local direct investment in Argentina. Applicable to the following industries: (i) Forestry, (ii) Tourism, (iii) Infrastructure, (iv) Mining, (v) Technology, (vi) Steelmaking, (vii) Energy, and (viii) Oil & Gas.
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YPF will relinquish to the Province of Santa Cruz certain Oil & Gas Concessions. Santa Cruz will possibly tender
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Opportunity for new players
The Province of Santa Cruz will dispose of ten (10) conventional Oil & Gas concessions that YPF decided to relinquish. The areas that YPF would divest are: Los Perales-Las Mesetas, Barranca Yankowsky, Cañadón de la Escondida-Las Heras, Cañadón León-Meseta Espinosa, Cañadón Vasco, Cañadón Yatel, Cerro Piedra-Cerro Guadal Norte, El Guadal-Lomas del Cuyo, Los Monos and Pico Truncado-El Cordón. The provincial owned-state company “FOMICRUZ” is likely to be the transferee of the areas and will be in charge of calling for bids or award the concessions directly.
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YPF launched an international tender for the construction of the Vaca Muerta Sur Oil Pipeline
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Looking for a partner
YPF launched an international tender for the construction of the “Vaca Muerta Sur” oil pipeline, with an estimated investment of USD 2.5 billion. This project aims to strengthen the country's energy infrastructure and open new oil export routes.
YPF plans to open the bids for the tender on 20 July, 2024, with the intention of signing the construction contracts by the end of the year. The execution of the project would start in 2024 and the aim is for it to be ready by July 2026. The company is looking for partners for both financing and operation of the pipeline.
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Lithium Tender in Salta Province
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Latest available Salt-lakes open for bid in Argentina
- Salta Province (state part of the “Lithium Triangle”) will tender the largest lithium reserve area in the country. “Recursos Energéticos y Mineros de Salta” (“REMSA”) –state-owned local company– will launch in mid-August a bidding process in an area of about 37 thousand hectares in the “Salar Arizaro”. The tender will include the obligations to sign a NSR -net smelter return- in favor of the Province and investment commitments in social infrastructure, such as roads, solar energy parks to benefit the populations of the Northwestern region and gas pipelines, among others.
- REMSA will also launch at the end of June a bidding process in an area of 100.2 hectares as for the “Patagonia- Salar Río Grande” in similar conditions mentioned hereof.
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Mendoza approved mining procedures
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Mendoza is opening up to mining investment opportunities
After years of absence of any promotion of mining activities in Mendoza Province by local authorities, the Province -through Local Law N° 9.529- has recently approved a new local mining administrative procedures code and a Mining Director was officially appointed. The new regulations incorporate environmental sustainability and sustainable development criteria in mining activities. The code includes the modernization of procedures and actively involves local communities in decision making related to the development of mineral resources.
The authorities of Mendoza are making special efforts to promote investments in mining activities. It should be noticed that Mendoza has great potential in gold, silver and especially copper and even its governor, Alfredo Cornejo, personally participated in the PDAC 2024 promoting Mendonza and looking for mining investments.
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Tender for the Second Tranche of the “President Néstor Kirchner Natural Gas Pipeline”
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This time, private financing
The Energy Secretariat announced that it will be calling for bids for the construction, without financing from the National Government, of the second tranche of the “President Néstor Kirchner Natural Gas Pipeline” (“GPNK”, after its Spanish acronym) designed to link Salliqueló (Buenos Aires) with San Jerónimo (south of Santa Fe). The project will involve three (3) compressor stations, with an extension of 524 kilometers and a capacity to transport 40 million cubic meters per day along the route chosen by the bidder. The bidder offering the lowest “canon” repayable by offtakers will become the awardee.
The First Tranche of the GPNK was built by the UTE Techint-Sacde (two of the three lines in which the project was divided) and by BTU (the third line).
The First and Second Tranches will be held and operated by a newly created transportation company.
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TGS Private Initiative and Call for Bids for the expansion of the Argentine Gas Transportation System
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Private Initiatives Begin
Transportadora del Gas del Sur ("TGS") will carry out a private initiative for the expansion of the Argentine Gas Transportation System through the execution of two (2) main projects:
- Transportation capacity expansion works in the First Tranche of the “President Néstor Kirchner Natural Gas Pipeline” (“GPNK”, after its Spanish acronym) under Law Nro. 17,319.
- Complementary expansion works in the Final Tranches of the TGS regulated system under Law Nro. 24,076.
A total investment of U$S 700 MM is projected.
The Argentine Government will be calling for bids for a U$S 500 MM investment in the GPNK.
TGS would assume the commitment to invest U$S 200MM in the Final Tranches of the regulated system, even if it is not the bidding awardee.
This project does not interfere with the execution of the Second Tranche of the GPNK mentioned in the previous item.
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Termination of 30-year Concession for Hydroelectric Dams in Neuquén and Río Negro
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New Tenders are coming?
The following hydroelectric concessions granted in 1993 are near to its 30-year expiration term (plus one (1) year extension approved by the National Executive Branch): -“Alicurá” Hydroelectric complexes (1.000Mw), currently operated by AES Argentina; - “El Chocón” (1.200 Mw) and “Arroyito” (120 Mw), operated by Enel Generación; - “Planicie Banderita” (450 Mw), operated by Aconcagua Energía; and - “Piedra del Águila” (1.400 Mw), operated by Central Puerto. The National Executive Branch is evaluating the re-bidding of these concessions, once the one-year extension has expired (end of 2024).
The way in which such concessions are resolved by the National Executive Branch will set the path for what might also happens with the “Los Nihuiles I, II and III” dams, whose contract expires in 2024, to which “Agua del Toro”, “Los Reyunos”, “El Tigre”, “Río Hondo” and “Los Quiroga” will be added later on.
In June 2025 the contract for the “Futeleufú” dam expires; and in November those of “Cabra Corral” and “El Tunal”; in March 2026 that of “Ullum”; and in July the concession of “El Cadillal”, “Escaba” and “Pueblo Viejo”.
“Pichi Picún Leufú”, in August 2029, is the last concession contract expiration date.
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Argentine MATER calls for bids for the award of up to 1,800 MW of renewable energy
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More green bidding process ahead
The Compañía Administradora del Mercado Mayorista Eléctrico S.A. (CAMMESA, after its Spanish acronym) published a new call for the Renewable Energy Term Market (“MATER”, after its Spanish acronym), corresponding to the second quarter of 2024.
The second call of the year will have between 280 MW for full dispatch priority allocation and just over 1,754 MW under the "A" Referential mechanism, which allows agents to inject energy with curtailment of up to 8% until the transportation works are executed to avoid the limitations, provided certain factors are met.
The deadline to apply for priority dispatch is on July 26th, both for projects seeking to enter via MATER Pleno and for those aiming to do so under the Referential "A" mechanism. The allocation of the dispatch priority will be announced on August 23, 2024.
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Decree 599/2024 Provides New Aviation Regulations
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Opens skies policy seeks for new opportunities of development
After the Aeronautical Code was amended by the Decree of Necessity and Urgency No. 70/2023 (the DNU) in December, 2023, the Milei administration has been actively working on enacting new regulations to deregulate an already complex local industry.
Now, with new Decree 599/2024, the government has finally provided the first regulation that aims to lay fair rules to allow new players in the aviation market: the Regulation for the Access to the Air Commercial Markets. This regulation provides different guidelines depending on the type of aeronautical authorization that is requested to the corresponding authority (whether it is for air carriage, airport services or even ground handling services).
However, all these applications have several guiding principles in common, among which the following stand out: free access to the market for new operators; encouragement of fair competition; tariff deregulation; freedom in establishing frequencies, where applicable; transparency in the measurement, allocation and utilization of airport resources.
In addition, the Decree (i) also provides the regulation of Article 110 of the Aeronautical Code (as modified by the DNU) - regarding agreements between the carriers (which involves a simplified procedure of review) - and, lastly, (ii) establishes that the Secretariat of Transportation will have to provide, within a period of 180 days, a Transitory Regulation for the Allocation of Capacity and/or frequencies for national and international air services,to be be replaced by a Permanent Regulation on October 31st, 2025.
For further information, please refer to news@pagbam.com, call (54-11) 4114-3000 or get in touch with us via WhatsApp.
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