The investment will be used to double the current pipeline capacity to 72,000 cubic metres per day, which will in turn help Argentina to increase oil exports to up to 250 thousand barrels per day
Oleoductos del Valle (Oldelval), which operates oil pipelines in Argentina, has unveiled plans to invest $750m in a bid to increase oil transport capacity from Vaca Muerta shale formation in Neuquén province.
The move was reported by Reuters citing Argentina’s Energy Ministry.
The investment will help in doubling the current capacity from 36,000m3 per day to 72,000m3 per day.
According to the energy ministry, the allocation will be used to lay around 525km of pipelines. The project will create around 1,200 jobs.
Overall, the task will be carried out in two phases with each expected to be completed in 11 months.
In the first phase, the capacity of the pipeline will be increased from the current 36,000m3 per day to 55,000m3 per day. The works under the second phase will further boost the capacity to 72,000m3.
The project will also increase Argentine oil exports to up to 250 thousand barrels per day, generating an income of around $4bn to $6.5bn.
The announcement came a week after the government approved a ten-year extension for Oldelval that will enable the company to operate pipelines from the Neuquen basin to Vaca Muerta until 2037.
Governor of Neuquén Omar Gutiérrez said: “We congratulate and appreciate the agreement reached by the Secretary of Energy and Odelval for the new concession. Certainties and assurances to be able to build the new track, a new parallel pipeline that will generate significant investment, production and work.”
Oldelval CEO Ricardo Hösel said: “With this milestone we are going to start the project, which will allow us to double the transportation capacity and will allow the country to generate foreign exchange of between 4 thousand and 6,500 million dollars.”