Argentina and Brazil signed an energy and gas exchange memorandum until 2025

Thursday, November 24, 2022 | 7:54 p.m.

Argentina and Brazil signed the update of the memorandum regulating the exchange of electricity and gas between the two countries until 2025.

President Alberto Fernández received at Casa Rosada the Secretary of Energy, Flavia Royón and the Argentine Ambassador to Brazil, Daniel Scioli, who signed the update of the memorandum for Argentina, with the Brazilian Vice Minister of Mines and Energy, Hailton Madureira de Almeida, as part of the negotiation.

The memorandum arises as a result of three rounds of negotiations carried out between October and November to update the agreement that was about to expire.

Cammesa, the company that manages the wholesale electricity market, and the Argentine Foreign Ministry also participated there.

Scioli stated that the objective of the agreement is “to provide predictability and guarantees regarding the supply of energy demanded by industry and households.”

As agreed, Argentina will continue to supply electricity and gas to Brazil, a country to which it has exported more than US$1 billion of electrical energy in 2021 and almost US$350 million of gas in various forms so far in 2022.

Meanwhile, this year Brazil guaranteed the maximum capacity to supply electricity to our country at competitive prices for US$250 million, which was possible through the Garabí electrical converters.

“In a context of global uncertainty due to the impact of the war between Russia and Ukraine, there is full conviction that we have to strengthen the local. The greatest possible deepening is the privileged strategic alliance between countries like Brazil and Argentina,” remarked the Argentine ambassador .

Likewise, the agreement allows the use of the Bilateral System of Payments in Local Currencies, implemented through the “Agreement on the System of Payments in Local Currency between the Argentine Republic and the Federative Republic of Brazil”, signed on September 8, 2008, aimed at to achieve financial integration.

The understanding provides for Brazil to modernize the aforementioned Garabí converter stations, guaranteeing proper operation for the next decade.

Pipeline and rates

On the other hand, Royón and Scioli informed the President about the progress in the financing negotiations for the next stages of the Néstor Kirchner Gas Pipeline.

The gas pipeline work will have the most important binational impact in history, since it will make the energy integration of Argentina and Brazil a reality.

In line with this, the teams from the Energía Argentina company (ENARSA), from the Ministries of Economy of Argentina and Brazil, the Foreign Ministries, the Argentine Embassy in Brazil and the National Bank for Economic and Social Development of Brazil (BNDES) launched the Negotiations to finalize the financing of the next stages.

From the development of unconventional gas reserves in the Vaca Muerta fields in the province of Neuquén, Argentina will become a net exporter of gas.

In relation to energy rates, Royón indicated that they will continue working to “order the rate system in Argentina, providing certainty, taking care of the service and access to energy. For this we are facing a comprehensive rate review. It is not an immediate process, but it will be progressive and carried out jointly with the company that acquires the share package of Edesur”.

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