SOUTH AMERICAN ENERGY DAILY ROUNDUP (March 18, 2009): Argentine industry up in arms about gas and power tariff hikes
South America Energy Markets (SAEM) will begin a daily roundup of the top-five stories affecting energy markets in the region with links. The roundup includes all the major web dailies of South America and other websites that write about the region’s energy markets. I aim to publish SAEM Daily Roundup from Monday through Friday by noon London time.
March 18, 2009
ARGENTINA – GAS AND POWER TARIFFS
Owing to an abrupt fall in export earnings, which have undermined energy subsidy handouts by the government, Buenos Aires daily La Nacion reports that industries in the provinces of Tucuman and Salta are up in arms because of gas and power hikes. A number of companies in both of the northwest provinces plan to take legal action to halt tariff hikes. Even though gas tariffs to industries were freed in 2004 by the government, regulation governing the energy sector continue to be one of the major problems the country faces.
BRAZIL – GAS CONSUMPTION
Brazil has today a surplus of 15 million cu m/d due to slower economic growth and lower consumption by gas-fired power plants, according to Sao Paulo daily Folha. Another factor that has undermined gas usage in Brazil has been price. Diesel prices are at $5.7/MMBtu compared with $6.6/MMBTU paid for gas. Brazil consumes today about 46 million cu m/d, down 22.8% versus 59.6 million cu m/d from a year ago. Bolivia, which had exported to Brazil the maximum 30 million cu m/d in the 1999-2019 gas purchas agrement, is the biggest loser. In the take-or-pay agreement, Brazil is obliged to purchase a minimum of 24 million cu m/d from Bolivia.
BRAZIL – PRE-SALT FEASIBILITY
Global crude prices will have to be at least $60/barrel for pre-salt crust production to be feasible, Ali Al-Naim, Saudi Arabia oil ministry, was quoted as saying in Gas Brasil. Despite the “huge” oil and gas finds announced in recent years in the promising Santos Basin, some analysts question their long-term feasibility in ultradeep waters. “Many of the discoveries announced by Petrobras are like discovering huge reserves on the moon,” a Petrobras official told SAEM on condition of anonymity. “How are you going to bring that energy from the moon to Earth? That is one of the big challenges of the Santos Basin.”
BRAZIL – ELETROBRAS CORRECTS
Brazilian power giant Eletrobras now states that it will invest in the 2009-12 business plan 30 billion reales ($13.2 billion/€10.2 billion) not $22 billion reales announced earlier (see South American Energy Daily Roundup, March 17, 2009). The investment plan includes taking part in 7GW of new generation projects, build 15,000km of transmission lines. The interesting matter to watch is how these investments will pan out by 2012.
URUGUAY – WIND POWER
State-owned power company UTE plans to launch soon a tender to purchase 250MW of wind-turbine generating capacity at a cost of about $270 million, according to Montevideo daily El Pais. Building such an big wind park forms part of the government’s plan to diversify power generation. About two thirds of Uruguay’s power needs come from hydropower installations and imports from Argentina.
These briefs can be reprinted as long as as the source is cited.
If you have any feedback on today’s articles, or if there are energy industry stories you think should be covered, or need research assistance, please contact email@example.com