On September 10, The Dialogue’s Latin America Energy Advisor published a commentary by Cefeidas Group Public Policy, Risk & Strategy Manager Megan Cook and Specialist Roland Huxley. They commented on the outlook for a pipeline that would transport gas from Argentina’s Vaca Muerta shale oil and gas formation to southern Brazil, challenges to the project’s realization and the potential benefits of the project.
“A potential Brazil-Argentine pipeline has been under discussion for some time without advancing, and while significant, Bolsonaro’s support for a Vaca Muerta pipeline is far from definitive given the challenges the project faces and the political will required to overcome them…First, Argentina’s risk rating and limited access to foreign credit markets mean financing for the Argentine section of the pipeline may prove difficult to acquire, while it is also unclear where financing for the Brazilian section would come from. Second, there are doubts about future gas demand in Brazil and the attractiveness of a Vaca Muerta pipeline versus other possible sources of gas. Further, for the project to be viable, Argentina would need to ensure a stable supply by increasing gas production and adjusting restrictions that currently allow companies to export gas during the summer only, when domestic demand is reduced.“
To read their commentary in the full article, please click here.