MercoPress. South Atlantic News Agency

Uruguay and Argentina agree to build floating re-gasification plant

President Mujica and Cristina Fernandez pose for the protocol picture

Uruguay and Argentina signed on Friday an agreement to build a re-gasification plant for liquid natural gas to help meet their energy needs. The floating re-gasification plant will supply the two nations with 10 million cubic meters a day of natural gas, scalable to 15 million, starting in 2013 according to an official statement.

The agreement was reached in Buenos Aires where Uruguayan President Jose Mujica met with his Argentine peer, Cristina Fernandez de Kirchner as part of an agreed agenda with periodical summits to privilege relations between the two neighboring countries.

Another issue was bilateral trade and the latest Argentine measures to restrict imports which Uruguayan exporters claim has had an impact on several industries. Argentina expanded to 600 products (an additional 200) the non automatic licensing system which basically delays imports to a maximum 60 days, during which time Argentina gauges the potential impact for local industry and share of the domestic market captured by imports.

The administration of President Cristina Kirchner has tried to convince Mercosur associates that the measures (Resolution 45) are not geared at the regional group but rather to contain “Asian imports”. Commissions to monitor the non automatic licences system have been agreed by Argentina with Mercosur members, Brazil, Paraguay and Uruguay, but Uruguayan manufacturers claim the 60 days timetable is not always respected and this affects seasonal food and textile imports. The impact of this delay and/or limitation of Uruguayan imports have been estimated to reach anywhere from 50 to 120 million US dollars.

Mercosur trade is crucial both for Argentina and Uruguay. Not only are Brazil and Argentina the main markets for Uruguay’s manufactured goods, but Brazil is Argentina’s main trade partner.

Uruguay’s chamber of industries called on the Uruguayan government to ensure that “rules of the game” are strictly respected. “Any minimum deviation, discourages investors, frustrates entrepreneurs and punishes who legitimately is working for the export market”.

However although no specifics were mentioned about how to overcome these specific complaints, the good chemistry between Mujica and Mrs. Kirchner is believed to be as important as any possible agreements at technical level.

This was confirmed by the long delayed joint re-gasification plant project finally agreed after years in the draft board. Mujica has only been in office a year and in this time has managed to unlock the pulp mills conflict which has re-opened a bi-national bridge blocked for years and now the commitment to the re-gasification plant.

The plant will be located along the Uruguayan coast, 12 kilometers from the mouth of the Arroyo Solis Grande River, some 80 kilometers east of Montevideo and will have an estimated cost of 18 million US dollars.

Mujica has publicly repeated that “nursing” special relations with Argentina is a priority of his administration and has always insisted that “people discussing finish understanding each other”.

“I’ve heard suggestions that virtually demand a war declaration on Argentina because of resolution 45; they seem to forget the number of Argentines that have flooded Uruguay during this exceptional summer season; the thousands that crossed the San Martin bridge, the millions they’ve spent here. We need an atmosphere that supports this, and is must be built patiently”, said Mujica

As to the re-gasification project, Mujica said it is very important “because even if oil prices increase, natural gas does not mathematically accompany oil and the plant is an obvious alternative”. He added that the plant will extend the natural gas horizon of both countries for at least 15 years beginning 2013.

Following the presidential meeting in the Olivos residence both leaders headed for downtown Buenos Aires for the inauguration of the “Patria Grande House”, (The big Fatherland House) dedicated to the memory of the deceased Nestor Kirchner who this Friday would have been 61.

At the ceremony they were joined by Paraguayan president Fernando Lugo. The Uruguayan leader’s speech was the most applauded at the inauguration.

“Great leaders are not remembered for their deeds but rather for “the team they leave behind to continue advancing and that’s your challenge” said Mujica addressing the crowd, mostly young people from Kirchner’s youth movement.