MercoPress. South Atlantic News Agency

Uruguay buying Argentine gas to supply electricity plant

Cardona underlined the initiative's lower costs for the country

Uruguay's state-owned electric company, UTE, has formalized an agreement with Gasoducto Cruz del Sur to supply natural gas from Argentina, thereby significantly reducing generation costs.

The agreement focuses on fueling UTE's combined cycle thermal power plant in Punta del Tigre. UTE President Andrea Cabrera stated that the measure was projected to deliver an estimated 50% savings in the energy production costs at the facility.

“It enables Uruguay to have certain certainties at this time that we are generating at lower costs,” Industry, Energy, and Mining Minister Fernanda Cardona said, emphasizing the cost-stabilizing nature of the agreement amid volatile international fuel prices.

The contract was signed with Gasoducto Cruz del Sur, a Uruguayan company that acts as the intermediary and manager for the supply. The company operates the gas pipeline, which provides a direct physical connection for natural gas transport between Argentina and Uruguay.

The pipeline, inaugurated in 2002, runs from Punta Lara in Buenos Aires, Argentina, across the River Plate and through the Uruguayan departments of Colonia, San José, and Canelones, ending up in the Montevideo metropolitan area.

Gasoducto Cruz del Sur is a joint venture with a mixed ownership structure, including Shell (40%), Pan American Energy (30%), the Uruguayan state-owned company Ancap (20%), and the German firm Wintershall Dea (10%).

The connection of the Punta del Tigre plant to this transport network was a prerequisite for the supply agreement. The operation involves a change in the origin and contractual conditions of the fuel, requiring no structural modifications to the plant itself.

The signing of the agreement is seen as a strategic move toward diversifying Uruguay's energy matrix and improving economic efficiency.

Cardona further noted that the next phase would define the specific supply contracts with Argentine gas providers to fine-tune volumes, reference prices, and logistical conditions for the continuous flow of natural gas.

The Punta del Tigre plant, a major part of Uruguay's thermal power fleet, holds increasing strategic importance as a reliable backup for the nation's primary hydroelectric and wind power generation, which is subject to climatic variations.