ago. 04, 2020

Shell Argentina hires tgs to get midstream closer to the wellhead

Potentially being a future model to be followed by the whole industry, this agreement consolidates the presence of tgs as midstreamer in the Neuquen basin and enables Shell Argentina to keep improving its efficiency and knowledge in its Bajada de Añelo block.

Shell Argentina contracted tgs for the rendering of gas dehydration, filtering, regulation and measurement services —with a capacity of up to 1 million cubic meters per day— in the Bajada de Añelo block, in Vaca Muerta, having agreed on a minimum two-year term for the mentioned service contract.

The transmission of operative data related to the volume of gas that enters tgs’ Vaca Muerta gas pipeline system will be conducted through the optical fiber network installed by Telcosur—tgs’ telecommunications business unit— in Vaca Muerta, which has enough capacity and capillarity to render telecommunications services to the whole region.

By virtue of this business model, Shell Argentina will keep improving its efficiency in its operations in Bajada de Añelo, focusing on wellhead drilling, completion and testing to obtain data on the reservoir, which will allow this company to optimize the block development’s project that operates jointly with YPF as partner.

"We are pleased that a midstream company such as tgs gets closer and closer to the wellhead, following the lead of the greatest non-conventional operations worldwide. This agreement is potentially a future model for the whole industry and constitutes a first step towards many other cooperation opportunities that may arise between both companies", celebrated Sean Rooney, Chairman of Shell Argentina.

“The agreement with Shell consolidates the comprehensive vision and business model adopted by tgs, which projects us as the ideal strategic partner —capable of meeting the needs of all the natural gas value chain links with the rendering of our services—. We are particularly proud of not having given up in these hard pandemics times: on the contrary— jointly with a team of Shell professionals— we have taken this momentous first step driven by a spirit of mutual cooperation and trust towards the development of this agreement, which will allow us to offer our client a customized solution to meet its needs and expectations,” asserted Oscar Sardi, CEO of tgs.

By the end of this year, both companies foresee to enter into an agreement related to the injection of the obtained production into the Northern Vaca Muerta Pipeline, which will be conditioned at the Tratayén plant. The two mentioned infrastructure facilities had been constructed and started up by tgs in 2019 in the Neuquén basin.

Thus, Shell will become the eighth company connected to tgs’ Vaca Muerta pipeline system, along with Pluspetrol, Pampa Energía, Exxon, GYP, Total, Tecpetrol, and YPF, thus confirming a business model that outsources all midstream services other than the main role of drilling.

About Shell Argentina

Shell has been in our country for over 105 years and in the Argentine Upstream business since 2012, when it started to explore and later exploit non-conventional oil and gas reserves at the Neuquén basin. It currently operates the blocks of Sierras Blancas, Cruz de Lorena, South West Coirón Amargo and Bajada de Añelo and keeps an ownership interest in the Bandurria Southern block operated by YPF and in two blocks operated by Total Austral: La Escalonada and Rincón La Ceniza. The development of Vaca Muerta holds an outstanding position in Shell Group’s future opportunities portfolio.

About tgs’ Vaca Muerta Project

tgs invested USD 300 million in Vaca Muerta for the construction of a 150- km pipeline that goes through 30 productive areas of the reserve and that will allow the transportation of up to 60 MMm3/d, to be conditioned at the plant built at Tratayén before being injected to the regulated transportation systems. The initial conditioning capacity of this plant is of 5 MMm3/d and will be expanded in the future through the installation of modules that will follow the pace of the reserves’ development.

tgs informs that its gas transportation system is fully operational, having organized its work teams in such a way as to respond to the sanitary situation. We give top priority to the preservation of our employees’ health, our facilities’ sanitary conditions’ safety and the continuity of our natural gas transportation service, other businesses such as LPG production and dispatch, our midstream operations in Vaca Muerta, our telecommunication services and all our other activities.