MercoPress. South Atlantic News Agency

Argentine industry with no energy for fourth day running

Argentina's main natural gas and electricity distributors interrupted this Monday for the fourth day running their provision to industry and big consumers to ensure supply to homes following a consumption peak attributed to the polar weather spell covering most of central and south Argentina.

Last Friday the President Nestor Kirchner administration requested gas and electricity distributors to make all the necessary cuts and concentrate in the supply to residential consumption. "The situation is the same as on Sunday afternoon. Normal supply to homes, resumption of compressed gas for vehicles and no provision to industry", said a spokesperson for Gas Natural Ban, one of Buenos Aires city main distributors "We're keeping permanent track of the situation, but there's no chance of gas supply resumption to industry", admitted a source from the Emergency Committee made up of government representatives and energy companies. "We don't want gas missing at homes, but things are improving partly because gasoline stations are again distributing compressed gas for vehicles" said a source from the committee. (Most Buenos Aires cabs run on compressed gas). However the source did admit a tough energy week lies ahead, "it looks quite complicated". The Buenos Aires media reports that last week President Kirchner talked directly to Daniel Cameron, Energy Secretary, asking him what the scenario was for the coming days given the crucial run off for Buenos Aires city governor next Sunday. The following day and on orders from Cameron, electricity supply to companies was cut by 1.200 MW, the highest ever since Kirchner is in office. "Nobody should be surprised, last year's Energy Plus resolution specifically mentioned that supply would privilege private homes and supply to industry would respect the 2005 demand level" said Cameron. "This meant that aggregate consumption was going to be dearer and the manufacturing industries should make an effort in ensuring their extra energy demand", he added recalling that a specific meeting on the issue was held last September at Government House with representatives from the Argentina Industries Union. Argentina is currently importing 700 MW per day from Brazil but at double the price prevailing in the Argentine energy market. "The economy has been growing at 9% for the last four years; it's only natural this could happen particularly with a cold spell and homes consumption peaking. This even happens in Europe and the press never gets involved in this panic campaign as is happening in Argentina", complained an official from the Energy Secretary. The Argentine government is now threatening to sanction the natural gas transporters accusing them of not having invested sufficient to ensure the needed pressure in the pipelines. However gas pipelines expansion has been frozen because Argentina's two main gas transporters have been involved in the Skanska case. The Swedish company allegedly was awarded the contract for expanding the pipelines web but with inflated costs, because apparently bribes had to the distributed among government officials. The case is under judicial investigation and in spite of the fact that President Kirchner argues it's an affair between private companies several of his administration's officials were either sacked or are under investigation. Fearing a similar situation, the joint government/private sector company that manages the Argentine electrical system had a record of proceedings signed stating that the expansion of gas pipelines to feed generating plants, awarded to a Brazilian contractor, was under conditions and direct orders from the Energy Department.