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Montevideo, October 15th 2018 - 17:19 UTC

Argentina temporarily takes over gas pipeline operator

Tuesday, December 30th 2008 - 20:00 UTC
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Argentina appointed a supervisor to help oversee pipeline operator Transportadora de Gas del Norte SA, TGN, after the company said it will default on 22.1 million US dollars debt, Federal Planning Minister Julio De Vido announced Monday.

The government will "undertake a complete audit of the company" during a 120-day period, said De Vido who added that Dario Pons, an energy regulation specialist will ensure that "consumers rights aren't affected by the company's decisions," he said. "If the company because of administration problems is in a default situation, we will have to take over operations, because an operational default could affect consumers and infrastructure", warned De Vido. TGN said on December 23 it will miss year-end debt payments estimated 22.1 million USD as the local Peso weakens and fuel exports drop. TGN, which manages about 5.700 kilometres of pipeline connects northern Argentine gas fields with Buenos Aires, delivers about 40% of the country's gas and an estimated 50% of its gas exports. The company supplies eight out of nine Argentine national distributors as well as numerous electricity generating plants and industries in 14 provinces. She is also responsible for gas exports to central and north Chile. Although TGN declined to comment on the government decision it has long argued that financial difficulties stem from an increase in operational and salary costs plus the reduction of export volumes to Brazil, Chile and Uruguay, to privilege the domestic market. TGN's missed payment would be the first corporate default to affect a company traded on Argentina's Merval stock exchange since the country's worst ever economic crisis in 2002, said Daniela Cuan, an analyst at Moody's Investors Service. The company's bonds were suspended in Luxembourg because of its financial "uncertainty", TGN said Monday in a statement posted on the Web site of the Argentine securities regulator. TGN had its foreign currency debt ratings cut to "B2" from "B1" and its national scale rating reduced to "Aa3.ar" from "Aa2.ar" by Moody's on December 23. TGN was born in 1992 when Argentina's natural gas monopoly was privatized and split among several consortiums. Gasinvest, made up of TecGas (Techint Group), Compañía General de Combustibles and France's Total Gas, hold a 56% stake, while 24% belongs to Blue Ridge Investments and 20% is traded in stock markets.

Categories: Energy & Oil, Argentina.

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