TGS » Topics » Gas Transportation

This excerpt taken from the TGS 20-F filed Jun 30, 2009.

Gas Transportation

The principal components of the pipeline system we operate are as follows:



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Pipelines. We render gas transportation service through a pipeline system of 5,351 miles long, of which we own 4,704 miles. The system consists primarily of large diameter, high pressure pipelines intended for the transportation of large volumes of gas at a pressure of approximately 60-70 kg/cm2. Line valves are installed on the pipeline at regular intervals, permitting sections of the pipeline to be isolated for maintenance and repair work. Gas flow regulating and measurement facilities are also located at various points on the system to regulate gas pressures and volumes. In addition, a cathodic protection system has been installed to protect the pipeline from corrosion and significantly reduce metal loss. All of the pipelines are located underground or underwater.

Maintenance bases. Maintenance bases are located adjacent to the gas pipeline system in order to maintain the pipeline and related surface facilities and to handle any emergency situations which may arise. Personnel at these bases periodically examine the pipelines to verify their condition and inspect and lubricate pipeline valves. Personnel at the bases also carry out a cathodic protection system to ensure that adequate anti-corrosion systems are in place and functioning properly. They also maintain and verify the accuracy of measurement instruments to ensure that these are functioning within appropriate industry standards and in accordance with the specifications contained in our service regulations.

Compressor plants. Compressor plants along the pipelines recompress the gas volumes transported in order to restore pressure to optimal operational levels, thereby ensuring maximum use of capacity as well as efficient and safe delivery. Compressor plants are spaced along the pipelines at various points (between 62 and 124 miles) depending upon certain technical characteristics of the pipelines and the required pressure for transport. Compressor plants include turbine-driven compressors or motor-driven compressors which use natural gas as fuel, together with electric power generators to supply the complementary electrical equipment (control and measurement devices, pumping, lighting, communications equipment, etc.).



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We transport gas through four major pipeline segments: General San Martín, Neuba I, Neuba II and Loop Sur, as well as several smaller gas pipelines. Information with respect to certain aspects of our main gas pipelines as of December 31, 2008, is set out in the table below:

Major Pipeline

Length Miles

Diameter (inches)

Maximum Pressure (kg/cm2)

Compressor Units

Operative Compressor Plants

HP Output

General San Martín

2,104

24/30

60

52

18

367,000

Neuba I/Loop Sur

731

24/30

60

11

4

53,300

Neuba II

1,064

30/36

70

19

6

163,100

Other (1)

805

Various

Various

  6

3

7,500

Total

4,704

  

88

31

590,900

(1)

Includes 247 miles of transfer pipelines throughout the pipeline system, as well as the Cordillerano pipeline, with a length of 239 miles.

General San Martín. This pipeline was built in three stages, completed in 1965, 1973 and 1978, and transports gas from the extreme southern portion of Argentina to the greater Buenos Aires area in east-central Argentina. It originates in San Sebastián (Tierra del Fuego), passes through the Straits of Magellan and the Provinces of Santa Cruz, Chubut, Río Negro and Buenos Aires (including the Cerri Complex located near the city of Bahía Blanca in central Argentina), and terminates at the high pressure transmission ring around the city of Buenos Aires. The pipeline receives natural gas from the Austral basin at the extreme south in Tierra del Fuego, from the same basin further north at El Cóndor and Cerro Redondo, in the Province of Santa Cruz and from the San Jorge basin in northern Santa Cruz and southern Chubut provinces. The pipeline serves principally the districts and cities of Buenos Aires, La Plata, Mar del Plata, Bahía Blanca and Comodoro Rivadavia. We have expanded this pipeline significantly over the years, most recently in August 2005. See “Item 4. Our Information—B. Business Overview—Gas Transportation—Pipeline Operations—Pipeline Expansions” for more information.

Neuba I (Sierra Barrosa-Bahía Blanca). Neuba I was built in 1970 and was expanded by us in 1996. It is one of our two main pipelines serving our principal source of gas supply, the Neuquén basin. The pipeline originates in west-central Argentina at Sierra Barrosa (Province of Neuquén), passes through the provinces of Río Negro, La



34







Pampa and Buenos Aires, and terminates at the Cerri Complex. This pipeline transports the gas received from the Neuquén basin, particularly from the Sierra Barrosa, Charco Bayo, El Medanito, Fernández Oro, Lindero Atravesado, Centenario, Río Neuquén and Loma de la Lata gas fields. The gas delivered from Neuba I is subsequently compressed and injected into the Loop Sur and the General San Martín pipelines for transportation north to the greater Buenos Aires area.

Loop Sur. This gas pipeline was built in 1972 as an extension of Neuba I and runs parallel to a portion of the General San Martín gas pipeline. Located in the province of Buenos Aires, it transports gas from the terminus of Neuba I at the Cerri Complex at Bahía Blanca and terminates at the high pressure transmission ring around Buenos Aires, which we also operate. The gas delivered by this gas pipeline constitutes a portion of the gas supply for the greater Buenos Aires area. Loop Sur is also connected to the TGN system and allows us to deliver gas to or receive gas from TGN. Such transfers occur occasionally during periods of high demand for gas.

Neuba II. Our newest pipeline, Neuba II, was built in 1988, was expanded four times between 1996 and 2000 and is our other pipeline serving the Neuquén basin. Neuba II begins at Repsol-YPF’s Loma de la Lata gas treatment plant in the western portion of the basin and runs through the provinces of Neuquén, Río Negro, La Pampa and Buenos Aires (through the Cerri Complex), up to its terminal station located at Ezeiza just outside of Buenos Aires. Neuba II is a principal source of gas for the Federal District and the greater Buenos Aires area.

Other Pipelines. Our other pipelines include the Cordillerano pipeline, built in 1984, which receives gas from the Neuquén Basin and supplies it mainly to three tourist centers in southern Argentina. In addition, we operate other minor pipelines, the high pressure transmission ring around Buenos Aires, the Chelforó-Conesa pipeline and other pipelines known as gas transfer pipelines.

Information regarding gas transportation system expansion is included in “Item 4. Our Information—B. Business Overview—Gas Transportation—Pipeline Operations—Pipeline Expansions.”

This excerpt taken from the TGS 6-K filed May 29, 2009.

Gas transportation


Gas transportation service is the main business activity of the Company, taking into account the invested capital and the resources affected to its operation, not being as important in the relative participation in the total net income of the Company because of the “pesification” of regulated tariffs at an exchange rate of US$ 1=Ps. 1 since the enactment of the Economic Emergency Law by the end of 2001. Gas transportation represented approximately 41% and 27% of total net revenues during the three-month periods ended March 31, 2009 and 2008, respectively. Gas transportation revenues are derived principally from firm contracts, under which pipeline capacity is reserved and paid for, regardless of actual usage by the shipper. TGS also provides interruptible transportation services subject to available pipeline capacity.


Gas transportation revenues for the three-month period ended March 31, 2009 increased by Ps. 6.1 million compared to 2008. This increase primarily reflects additional revenue generated by new firm transportation contracts along with incremental revenues generated by the operation and maintenance of the 78-million-cubic-feet-per-day-pipeline capacity expansion carried out under the Gas Trust Program. The expansion work concluded at the end of 2008.





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On October 9, 2008, TGS signed a provisional agreement with the UNIREN on a tariff increase of 20%, which is retroactively applicable from September 1, 2008 (approximately Ps. 7 million per month). According to this agreement, the funds generated by this tariff increase will be invested in the pipeline system through a trust fund. The tariff increase will come into effect once the provisional agreement has been ratified by a Presidential Decree. The provisional agreement will be in force until the date of the coming into effect of the integral license renegotiation agreement to be signed with the Argentine government (for further information, see Note 7.a. to the consolidated interim financial statements).



This excerpt taken from the TGS 6-K filed Feb 26, 2009.

Gas Transportation

In 2008 gas transportation revenues amounted to Ps. 506.3 million, representing a decrease of Ps. 3.2 million compared to the Ps. 509.5 million reported in 2007. This slight decrease in revenues- in spite of higher firm transportation revenues- is derived from a Ps. 13.0 million fall in revenues related to a lower demand of interruptible transportation services reflecting the decrease in gas availability.  

As mentioned in the paragraph above, firm transportation revenues were higher by approximately Ps. 9.7 million. One of the factors that triggered this increase was the “whole year effect” of the new firm transportation contracts in service since 2007 for an aggregate transportation capacity of 57 MMcf/d, subscribed by Aluar Aluminio Argentino S.A.C.I. (“Aluar”) and natural gas producers. Another cause that contributed to this rise in revenues is the coming into effect of service contracts during the second semester of the year 2008, as detailed below:

(i) 11 MMcf/d additional transportation capacity subscribed by Aluar. The pipeline expansion works related to this incremental service - added to the 25 MMcf/d which have already started operations in January 2009- involved an investment of roughly US$ 37 million. The related works consisted in the installation of loops along the San Martín Pipeline and their financing will be completed during 2009 through the advance payment of the service.

(ii) 60 MMcf/d additional transportation capacity related to first section of the Expansion Works 2006/2009 that is already in service (“Hito AP”), carried out and financed under the Gas Trust Fund Program.

During the 2008 winter, the natural gas demand from the residential segment was lower than in 2007 as a direct consequence of the warmer weather recorded in this period, while a higher supply to the industrial and electric power plants sectors could be observed.

Although the supply shortage did not generate a bottleneck in the transportation capacity for meeting the global demand from the system, there were restrictions in the consumption of certain customers that hold firm transportation contracts with TGS, in an effort to redirect and target the supply to the demand regarded as top priority, mainly residential users, CNG stations and industries connected to the distribution network.

This situation was partially offset by the input of ENARSA gas into TGS system, within the framework of the Energía Total Program. The gas proceeds from the re-gasifying LNG tank located in the Bahía Blanca port. The total injection of re-gasified natural gas amounted to 15.5 billion of cubic feet in the period June – September , representing a 145 MMcf/d average contribution to the domestic market supply.

In connection with future pipeline system expansions, we are making progress in the 2006/2009 Expansion Works that will allow the transportation of an incremental volume of 378 MMcf/d, which includes the capacity already in service, mentioned above as “Hito AP”.

The 2006/2009 Expansion Works –scheduled to be implemented in gradual start-up stages– are developed under the financial trust program, with the contribution of funds provided by the gas producers and shippers to whom incremental capacity has been allocated. The scheme foresees recovery through incomes proceeding from additional tariff surcharges, paid by all the firm users, with the exception of the residential segment.

During the development of the 2006/2009 expansion, TGS plays the role of technical manager of the works to be carried out along its pipeline system. Under the terms of the contract executed in late 2006, TGS will receive Ps. 50 million for the conduction of the 247 MMcf/d expansion. The payment for the management of the remaining 131 MMcf/d is still to be agreed. As soon as the works come into service, TGS will be in charge of their operation and maintenance, as well as of the rendering of firm transportation services - concepts for which TGS will be paid with about 58% of the current transportation tariff.



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 Financial and Operational Indicators of the Gas Transportation Segment


 

2008

2007

2006

 

(in millions of Argentine pesos, except for where otherwise stated)

SELECTED FINANCIAL INFORMATION(1):

   

Net revenues

506.3

509.5

492.0

Operating Income

187.6

218.4

211.4

Depreciation of property, plant and equipment

151.3

149.1

144.4

Investments in property, plant and equipment

185.8

114.6

119.9

Identifiable Assets

3,775.3

3,737.5

3,836.4

OPERATING STATISTICS:

   

Average capacity hired on a firm basis (in Bcf/d)

2.6

2.6

2.5

Average deliveries (in Bcf /d)

2.2

2.2

2.2

Average deliveries during the three-day peak (in Bcf /d)

2.8

2.7

2.6

Annual load factor (2)

86%

87%

86%

Load factor during winter(2)

85%

93%

94%

(1) Information corresponding to consolidated financial statements.

(2) Ratio between annual average deliveries and average firm contracted capacity


This excerpt taken from the TGS 20-F filed Jun 16, 2008.

Gas Transportation

The principal components of the pipeline system we operate are as follows:

Pipelines. We render gas transportation service through a pipeline system of 4,997 miles long, of which we own 4,682 miles. The system consists primarily of large diameter, high pressure pipelines intended for the transportation of large volumes of gas at a pressure of approximately 60-70 kg/cm2. Line valves are installed on the pipeline at regular intervals, permitting sections of the pipeline to be isolated for maintenance and repair work. Gas flow regulating and measurement facilities are also located at various points on the system to regulate gas pressures and volumes. In addition, a cathodic protection system has been installed to protect the pipeline from corrosion and significantly reduce metal loss. All of the pipelines are located underground or underwater.

Maintenance bases. Maintenance bases are located adjacent to the gas pipeline system in order to maintain the pipeline and related surface facilities and to handle any emergency situations which may arise. Personnel at these bases periodically examine the pipelines to verify their condition and inspect and lubricate pipeline valves. Personnel at the bases also carry out a cathodic protection system to ensure that adequate anti-corrosion systems are in place and functioning properly. They also maintain and verify the accuracy of measurement instruments to ensure that these are functioning within appropriate industry standards and in accordance with the specifications contained in our service regulations.

Compressor plants. Compressor plants along the pipelines recompress the gas volumes transported in order to restore pressure to optimal operational levels, thereby ensuring maximum use of capacity as well as efficient and safe delivery. Compressor plants are spaced along the pipelines at various points (between 62 and 124 miles) depending upon certain technical characteristics of the pipelines and the required pressure for transport. Compressor plants include turbine-driven compressors or motor-driven compressors which use natural gas as fuel, together with electric power generators to supply the complementary electrical equipment (control and measurement devices, pumping, lighting, communications equipment, etc.).

We transport gas through four major pipeline segments: General San Martín, Neuba I, Neuba II and Loop Sur, as well as several smaller gas pipelines. Information with respect to certain aspects of our main gas pipelines as of December 31, 2007, is set out in the table below:

Major Pipeline

Length Miles

Diameter (inches)

Maximum Pressure (kg/cm2)

Compressor Units

Operative Compressor Plants

HP Output

General San Martín

2,081

24/30

60

54

17

372,800

Neuba I/Loop Sur

731

24/30

60

11

4

52,550

Neuba II

1,064

30/36

70

18

6

145,980

Other (1)

806

Various

Various

  6

3

7,760

Total

4,682

  

89

30

579,090

(1)

Includes 247 miles of transfer pipelines throughout the pipeline system, as well as the Cordillerano pipeline, with a length of 239 miles.

General San Martín. This pipeline was built in three stages, completed in 1965, 1973 and 1978, and transports gas from the extreme southern portion of Argentina to the greater Buenos Aires area in east-central Argentina. It originates in San Sebastián (Tierra del Fuego), passes through the Straits of Magellan and the Provinces of Santa Cruz, Chubut, Río Negro and Buenos Aires (including the Cerri Complex located near the city of Bahía Blanca in central Argentina), and terminates at the high pressure transmission ring around the city of Buenos Aires. The pipeline receives natural gas from the Austral basin at the extreme south in Tierra del Fuego, from the same basin further north at El Cóndor and Cerro Redondo, in the Province of Santa Cruz and from the San Jorge basin in northern Santa Cruz and southern Chubut provinces. The pipeline serves principally the districts and cities of Buenos Aires, La Plata, Mar del Plata, Bahía Blanca and Comodoro Rivadavia. We have expanded this pipeline significantly over the years, most recently in August 2005. See “Item 4. Our Information—B. Business Overview—Gas Transportation—Pipeline Operations—Pipeline Expansions” for more information.

Neuba I (Sierra Barrosa-Bahía Blanca). Neuba I was built in 1970 and was expanded by us in 1996. It is one of our two main pipelines serving our principal source of gas supply, the Neuquén basin. The pipeline originates in west-central Argentina at Sierra Barrosa (Province of Neuquén), passes through the provinces of Río Negro, La Pampa and Buenos Aires, and terminates at the Cerri Complex. This pipeline transports the gas received from the Neuquén basin, particularly from the Sierra Barrosa, Charco Bayo, El Medanito, Fernández Oro, Lindero Atravesado, Centenario, Río Neuquén and Loma de la Lata gas fields. The gas delivered from Neuba I is subsequently compressed and injected into the Loop Sur and the General San Martín pipelines for transportation north to the greater Buenos Aires area.

Loop Sur. This gas pipeline was built in 1972 as an extension of Neuba I and runs parallel to a portion of the General San Martín gas pipeline. Located in the province of Buenos Aires, it transports gas from the terminus of Neuba I at the Cerri Complex at Bahía Blanca and terminates at the high pressure transmission ring around Buenos Aires, which we also operate. The gas delivered by this gas pipeline constitutes a portion of the gas supply for the greater Buenos Aires area. Loop Sur is also connected to the TGN system and allows us to deliver gas to or receive gas from TGN. Such transfers occur occasionally during periods of high demand for gas.

Neuba II. Our newest pipeline, Neuba II, was built in 1988, was expanded four times between 1996 and 2000 and is our other pipeline serving the Neuquén basin. Neuba II begins at Repsol-YPF’s Loma de la Lata gas treatment plant in the western portion of the basin and runs through the provinces of Neuquén, Río Negro, La Pampa and Buenos Aires (through the Cerri Complex), up to its terminal station located at Ezeiza just outside of Buenos Aires. Neuba II is a principal source of gas for the Federal District and the greater Buenos Aires area.

Other Pipelines. Our other pipelines include the Cordillerano pipeline, built in 1984, which receives gas from the Neuquén Basin and supplies it mainly to three tourist centers in southern Argentina. In addition, we operate other minor pipelines, the high pressure transmission ring around Buenos Aires, the Chelforó-Conesa pipeline and other pipelines known as gas transfer pipelines.

Information regarding gas transportation system expansion is included in “Item 4. Our Information—B. Business Overview—Gas Transportation—Pipeline Operations—Pipeline Expansions.”

This excerpt taken from the TGS 6-K filed Mar 13, 2008.

Gas transportation

TGS renders regulated gas transportation services with a current firm capacity of 2.6 Bcf/d through a pipeline system 4,997 miles long (of which 4,682 miles are owned by TGS). The service starts with the reception of the gas owned by the shipper (distribution companies, producers, marketers or great users) in one or more reception points, to be transported and delivered at several delivery points along the system. TGS pipeline system connects Argentina southern and western gas reserves with the main consumption centers in those areas, including



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the Greater Buenos Aires, in which the Autonomous City of Buenos Aires -the main natural gas consumption center in Argentina- is located. The total service area comprises approximately 5.0 million end users, including approximately 3.4 million in the Greater Buenos Aires. Direct service to residential, commercial, industrial users and electric power plants is mainly rendered by four gas distribution companies, according to each area, which are connected to TGS system: MetroGAS S.A., Gas Natural Ban S.A., Camuzzi Gas Pampeana S.A. and Camuzzi Gas del Sur S.A. TGS also renders direct firm transportation service to some major industrial users and electric power plants that are located within its operations area.

Revenues related to this segment are mainly derived from transportation contracts on a firm basis, under which reservations and payments are made for capacity regardless of actual use of clients. TGS also renders interruptible transportation services under which gas transportation is carried out subject to the available capacity of the transportation system.

In 2007, gas transportation revenues amounted to Ps. 509.5 million, an increase of Ps. 17.5 million compared to the Ps. 492.0 million recorded in 2006. The increase basically reflects a rise in firm transportation services, derived from the start up, in the first semester of 2007, of the service related to the new firm transportation contracts celebrated with Aluar Aluminio Argentino S.A.C.I. (“Aluar”) and natural gas producers for an aggregate additional transportation capacity of 57 MMcf/d. These new agreements generated revenues of Ps. 19.8 million in 2007 and the related expansion works on the pipeline system consisted in the installation of 50 miles of loops and the revamping of a compressor plant. The expansions required an investment of US$ 42 million, financed by means of advance payments from the customers who contracted the new capacity.

It is worth mentioning that in 2007 TGS achieved the extension of the terms of firm transportation contracts (for a total capacity of 261 MMcf/d) that would have expired between 2008 and 2011. This negotiation increased the average term of said transportation contracts to 27 years.

During the winter of 2007, natural gas demand from residential users continued growing and the demand from power plants was higher than the values recorded in previous years, resulting from a combination of factors that included economic growth, lower hydroelectric generation and intense cold weather registered during this season. Natural gas production could not meet this higher demand but at no time did transportation capacity constitute a bottleneck for the supply of available natural gas to the different users. During the emergency that affected the transportation system, the Argentine government expressly instructed to TGS to redirect firm transportation to supply power plants, residential users and GNC stations in a first rank of



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priority. These governmental measures did not have a material impact on the results of the Company.

[tgsfs311207010.gif]

Source: own elaboration

Regarding the renegotiation of TGS license terms, although negotiations continued with the UNIREN it was not possible to arrive to an agreement on tariff re-composition. Therefore, the weakened profitability of the gas transportation business -which has been dragging on for the last years- was even worsened by the increase of operation and maintenance costs.

The Company remains open to negotiations with the Argentine government, with the aim to start the re-composition of the regulated business profitability.

Regarding future expansions to the gas transportation system, a Project to expand the system by 332 MMcf/d is going through its initial phase. It will be conducted in several stages in order to achieve a gradual increase of transportation capacity, with an initial expansion of 78 MMcf/d scheduled for the winter of 2008. This expansion will be conducted within the framework of gas trust funds, and TGS will perform the role of works manager. In accordance with the management contract entered into in December 2006, in return for the services related to the 247 MMcf/d expansion, TGS will receive the amount of Ps. 50 million plus value added tax, through bonds to be issued by a specific Works Trust Fund. Payment for the management of the works related to the remaining 85 MMcf/d expansion is still pending definition. The trust bonds shall be issued for an eight-year term, with interests payable on a quarterly basis together with principal amortization. The works shall be totally financed by the customers who contracted the incremental capacity by means of three new gas trust funds and will be repaid with the new



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tariff charge that has been in force for industries, power plants, and big and medium-size businesses since the beginnings of 2007. The new assets will belong to a work trust fund.


Financial and Operational Indicators of the Gas Transportation Segment


 

2007

2006

2005

 

(in millions of constant Argentine pesos at February 28, 2003, except for where otherwise stated)

FINANCIAL SELECTED INFORMATION(1):

   

Net revenues

509.5

492.0

460.0

Operating Income

218.4

211.4

202.8

Depreciation of property, plant and equipment

149.1

144.4

141.2

Investments in property, plant and equipment

114.6

119.9

140.4

Identifiable assets

3,737.5

3,836.4

3,882.9

OPERATING  STATISTICS:

   

Average capacity hired on a firm basis (in Bcf/d)

2.6

2.5

2.4

Average deliveries (in Bcf /d)

2.2

2.2

2.0

Average deliveries during the three-day peak (in Bcf /d)

2.7

2.6

2.6

Annual load factor (2)

87%

86%

84%

Load factor during winter (2)

93%

94%

92%

(1) Information corresponding to consolidated financial statements.

(2) Ratio between the average deliveries of the year and average firm contracted capacity.


This excerpt taken from the TGS 20-F filed Jun 22, 2007.

Gas Transportation

The principal components of the pipeline system we operate are as follows:



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Pipelines. We render gas transportation service through a pipeline system of 7,938 km (4,933 miles) long, of which we own 7,481 km (4,649 miles). The system consists primarily of large diameter, high pressure pipelines intended for the transportation of large volumes of gas at a pressure of approximately 60-70 kg/cm2. Line valves are installed on the pipeline at regular intervals, permitting sections of the pipeline to be isolated for maintenance and repair work. Gas flow regulating and measurement facilities are also located at various points on the system to regulate gas pressures and volumes. In addition, a cathodic protection system has been installed to protect the pipeline from corrosion and significantly reduce metal loss. All of the pipelines are located underground or underwater.

Maintenance bases. Maintenance bases are located adjacent to the gas pipeline system in order to maintain the pipeline and related surface facilities and to handle any emergency situations which may arise. Personnel at these bases periodically examine the pipelines to verify their condition and inspect and lubricate pipeline valves. Personnel at the bases also carry out a cathodic protection system to ensure that adequate anti-corrosion systems are in place and functioning properly. They also maintain and verify the accuracy of measurement instruments to ensure that these are functioning within appropriate industry standards and in accordance with the specifications contained in our service regulations.

Compressor plants. Compressor plants along the pipelines recompress the gas volumes transported in order to restore pressure to optimal operational levels, thereby ensuring maximum use of capacity as well as efficient and safe delivery. Compressor plants are spaced along the pipelines at various points (between 62 and 124 miles) depending upon certain technical characteristics of the pipelines and the required pressure for transport. Compressor plants include turbine-driven compressors or motor-driven compressors which use natural gas as fuel, together with electric power generators to supply the complementary electrical equipment (control and measurement devices, pumping, lighting, communications equipment, etc.).

We transport gas through four major pipeline segments: General San Martín, Neuba I, Neuba II and Loop Sur, as well as several smaller gas pipelines. Information with respect to certain aspects of our main gas pipelines as of December 31, 2006, is set out in the table below:

Major Pipeline

Length

Diameter (inches)

Maximum Pressure (kg/cm2)

Compressor Units

Operative Compressor Plants

HP Output

km

Miles

General San Martín

3,299

2,050

24/30

60

54

17

372,000

Neuba I/Loop Sur

1,193

741

24/30

60

11

4

52,860

Neuba II

1,713

1,064

30/36

70

18

6

146,380

Other (1)

1,276

794

Various

Various

  6

3

7,620

Total

7,481

4,649

  

89

30

578,860

(1)

Includes 398 km (247 miles) of transfer pipelines throughout the pipeline system, as well as the Cordillerano pipeline, with a length of 384 km (239 miles).


General San Martín. This pipeline was built in three stages, completed in 1965, 1973 and 1978, and transports gas from the extreme southern portion of Argentina to the greater Buenos Aires area in east-central Argentina. It originates in San Sebastián (Tierra del Fuego), passes through the Straits of Magellan and the Provinces of Santa Cruz, Chubut, Río Negro and Buenos Aires (including the Cerri Complex located near the city of Bahía Blanca in central Argentina), and terminates at the high pressure transmission ring around the city of Buenos Aires. The pipeline receives natural gas from the Austral basin at the extreme south in Tierra del Fuego, from the same basin further north at El Cóndor and Cerro Redondo, in the Province of Santa Cruz and from the San Jorge basin in northern Santa Cruz and southern Chubut provinces. The pipeline serves principally the districts and cities of Buenos Aires, La Plata, Mar del Plata, Bahía Blanca and Comodoro Rivadavia. We have expanded this pipeline significantly over the years, most recently in August 2005. See “Item 4. Our Information—Business Overview—Gas Transportation—Pipeline Operations—Pipeline Expansions” for more information.

Neuba I (Sierra Barrosa-Bahía Blanca). Neuba I was built in 1970 and was expanded by us in 1996. It is one of our two main pipelines serving our principal source of gas supply, the Neuquén basin. The pipeline originates in west-central Argentina at Sierra Barrosa (Province of Neuquén), passes through the provinces of Río Negro, La



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Pampa and Buenos Aires, and terminates at the Cerri Complex. This pipeline transports the gas received from the Neuquén basin, particularly from the Sierra Barrosa, Charco Bayo, El Medanito, Fernández Oro, Lindero Atravesado, Centenario, Río Neuquén and Loma de la Lata gas fields. The gas delivered from Neuba I is subsequently compressed and injected into the Loop Sur and the General San Martín pipelines for transportation north to the greater Buenos Aires area.

Loop Sur. This gas pipeline was built in 1972 as an extension of Neuba I and runs parallel to a portion of the General San Martín gas pipeline. Located in the province of Buenos Aires, it transports gas from the terminus of Neuba I at the Cerri Complex at Bahía Blanca and terminates at the high pressure transmission ring around Buenos Aires, which we also operate. The gas delivered by this gas pipeline constitutes a portion of the gas supply for the greater Buenos Aires area. Loop Sur is also connected to the TGN system and allows us to deliver gas to or receive gas from TGN. Such transfers occur occasionally during periods of high demand for gas.

Neuba II. Our newest pipeline, Neuba II, was built in 1988, was expanded four times between 1996 and 2000 and is our other pipeline serving the Neuquén basin. Neuba II begins at Repsol-YPF’s Loma de la Lata gas treatment plant in the western portion of the basin and runs through the provinces of Neuquén, Río Negro, La Pampa and Buenos Aires (through the Cerri Complex), up to its terminal station located at Ezeiza just outside of Buenos Aires. Neuba II is a principal source of gas for the Federal District and the greater Buenos Aires area.

Other Pipelines. Our other pipelines include the Cordillerano pipeline, built in 1984, which receives gas from the Neuquén Basin and supplies it mainly to three tourist centers in southern Argentina. In addition, we operate other minor pipelines, the high pressure transmission ring around Buenos Aires, the Chelforó-Conesa pipeline and other pipelines known as gas transfer pipelines.

Information regarding gas transportation system expansion is included in “Item 4. Our Information—Business Overview—Gas Transportation—Pipeline Operations—Pipeline Expansions.”

This excerpt taken from the TGS 6-K filed Mar 7, 2007.

Gas transportation


Gas transportation service is the main business activity of the Company, taking into account the invested capital and the resources involved in its operation, not being as important in the relative participation in the total net revenues of the Company because of the “pesification” of regulated tariffs at an exchange rate of US$ 1=Ps. 1 since the enactment of the Economic Emergency Law. This business segment represented approximately 38% and 43% of total net revenues earned during the years ended December 31, 2006 and 2005, respectively. Gas transportation service revenues are derived principally from firm contracts, under which pipeline capacity is reserved and paid for, regardless of actual usage by the shipper. TGS also provides interruptible transportation services subject to available pipeline capacity.

Gas transportation revenues for the year ended December 31, 2006 increased by 7 % as compared to the year 2005. This increase was principally due to of a Ps. 21.2 million impact derived from the new firm transportation contracts, some of which came into effect as a consequence of the San Martín pipeline expansion ended in August 2005, which increased the transportation capacity by 2.9 MMm3/d (102.4 MMcf/d).

This project involved the construction of approximately 509 km (316 miles) of pipeline and a 30,000 HP compression capacity increase through the construction of a compressor plant and the revamping of some of TGS’s existing compressor units.

This expansion was carried out within the framework of the Decree No. 180/04 issued by the Executive Branch and the Resolution No. 185/04 issued by the Ministry of Federal Planning and Public Service, which allows the creation of trust fund to finance gas transportation system expansions in light of the lack of expansion of the natural gas transportation system over the last years (as a consequence of the “pesification” of tariffs and the fact that the renegotiation of the License is still pending) and a growing gas demand in certain segments of the Argentine economy.

The gas trust fund created by the National Government for this expansion financed US$ 311 million from a total amount of US$ 351 million, while TGS invested approximately US$ 40 million (including Value Added Tax for U$S 7 million), which are repaid by means of the revenues generated by new contracts based on the 80% of the current tariffs. These revenues reflected an increase of Ps. 17 million and Ps. 3.4 million for the years ended December 31, 2006 and 2005, respectively.



20


The gas trust fund repays it investment by means of the 20% of the total net revenues generated by the current tariffs and collects an additional specific charge, which is finally paid by industries, power plants and CNG suppliers which gas transportation supply is made under firm contracts. This charge represents an 81.6% increase in the current tariffs.  The works financed by this means, are owned by the gas trust fund and, TGS, as well as being in charge of the management of the works, is responsible for the operation and maintenance of the gas financial trust assets.

Revenues related to the interruptible transportation service might be affected in the future due to the creation of the Gas Electronic Market in line with the provisions of the Executive Branch Decree No. 180/04 (for further information on this issue and on the current status of tariff renegotiation see Note 7.b. to the consolidated financial statements). Revenues related to this service amounts to Ps. 34.9 million and Ps. 24.9 million for the years ended December 31, 2006 and 2005, respectively.


This excerpt taken from the TGS 20-F filed Jun 27, 2006.

Gas Transportation

The principal components of the pipeline system we operate are as follows:

Pipelines. We render gas transportation service through a pipeline system of 7,927 km (4,926 miles) long, of which 7,471 km (4,642 miles) are owned by us. The system consists primarily of large diameter, high pressure pipelines intended for the transportation of large volumes of gas at a pressure of approximately 60-70 kg/cm2. Line valves are installed on the pipeline at regular intervals, permitting sections of the pipeline to be isolated for maintenance and repair work. Gas flow regulating and measurement facilities are also located at various points on the system to regulate gas pressures and volumes. In addition, a cathodic protection system has been installed to protect the pipeline from corrosion and significantly reduce metal loss. All of the pipelines are located underground or underwater.

Maintenance bases. Maintenance bases are located adjacent to the gas pipeline system in order to maintain the pipeline and related surface facilities and to handle any emergency situations which may arise. Personnel at these bases periodically examine the pipelines to verify their condition and inspect and lubricate pipeline valves. Personnel at the bases also carry out a cathodic protection system to ensure that adequate anti-corrosion systems are in place and functioning properly. They also maintain and verify the accuracy of measurement instruments to ensure that these are functioning within appropriate industry standards and in accordance with the specifications contained in our service regulations.

Compressor plants. Compressor plants along the pipelines recompress the gas volumes transported in order to restore pressure to optimal operational levels, thereby ensuring maximum use of capacity as well as efficient and safe delivery. Compressor plants are spaced along the pipelines at various points (between 62 and 124 miles) depending upon certain technical characteristics of the pipelines and the required pressure for transport. Compressor plants include turbine-driven compressors or motor-driven compressors which use natural gas as fuel, together with electric power generators to supply the complementary electrical equipment (control and measurement devices, pumping, lighting, communications equipment, etc.).



35







We transport gas through four major pipeline segments: General San Martín, Neuba I, Neuba II and Loop Sur, as well as several smaller gas pipelines. Information with respect to certain aspects of our main gas pipelines as of December 31, 2005, is set out in the table below:

Major Pipeline

Length

Diameter (inches)

Maximum Pressure (kg/cm2)

Compressor Units

Operative Compressor Plants

HP Output

km

Miles

General San Martín

3,460

2,150

24/30

60

50

16

372,800

Neuba I/Loop Sur

1,240

771

24/30

60

11

4

52,550

Neuba II

1,665

1,035

30/36

70

18

6

143,580

Other (1)

1,106

686

Various

Various

  6

3

7,760

Total

7,471

4,642

  

85

29

576,690

(1)

Includes 398 km (247 miles) of transfer pipelines throughout the pipeline system, as well as the Cordillerano pipeline, with a length of 313 km (194 miles).


General San Martín. This pipeline was built in three stages, completed in 1965, 1973 and 1978, and transports gas from the extreme southern portion of Argentina to the greater Buenos Aires area in east-central Argentina. It originates in San Sebastián (Tierra del Fuego), passes through the Straits of Magellan and the Provinces of Santa Cruz, Chubut, Río Negro and Buenos Aires (including the Cerri Complex located near the city of Bahía Blanca in central Argentina), and terminates at the high pressure transmission ring around the city of Buenos Aires. The pipeline receives natural gas from the Austral basin at the extreme south in Tierra del Fuego, from the same basin further north at El Cóndor and Cerro Redondo, in the Province of Santa Cruz and from the San Jorge basin in northern Santa Cruz and southern Chubut provinces. The pipeline serves principally the districts and cities of Buenos Aires, La Plata, Mar del Plata, Bahía Blanca and Comodoro Rivadavia. We have expanded this pipeline significantly over the years, most recently in August 2005. See “Item 4. Our Information—Business Overview—Gas Transportation Regulated Business—Pipeline Operations—Pipeline Expansions” for more information.

Neuba I (Sierra Barrosa-Bahía Blanca). Neuba I was built in 1970 and expanded by us in 1996 and is one of our two main pipelines serving our principal source of gas supply, the Neuquén basin. The pipeline originates in west-central Argentina at Sierra Barrosa (Province of Neuquén), passes through the provinces of Río Negro, La Pampa and Buenos Aires, and terminates at the Cerri Complex. This pipeline transports the gas received from the Neuquén basin, particularly from the Sierra Barrosa, Charco Bayo, El Medanito, Fernández Oro, Lindero Atravesado, Centenario, Río Neuquén and Loma de la Lata gas fields. The gas delivered from Neuba I is subsequently compressed and injected into the Loop Sur and the General San Martín pipelines for transportation north to the greater Buenos Aires area.

Loop Sur. This gas pipeline was built in 1972 as an extension of Neuba I and runs parallel to a portion of the General San Martín gas pipeline. Located in the province of Buenos Aires, it transports gas from the terminus of Neuba I at the Cerri Complex at Bahía Blanca and terminates at the high pressure transmission ring around Buenos Aires, which we also operate. The gas delivered by this gas pipeline constitutes a portion of the gas supply for the greater Buenos Aires area. Loop Sur is also connected to the TGN system and allows us to deliver gas to or receive gas from TGN. Such transfers occur occasionally during periods of high demand for gas.

Neuba II. Our newest pipeline, Neuba II, was built in 1988 and expanded four times beetwen 1996 and 2000 and is our other pipeline serving the Neuquén basin. Neuba II begins at Repsol-YPF’s Loma de la Lata gas treatment plant in the western portion of the basin and runs through the provinces of Neuquén, Río Negro, La Pampa and Buenos Aires (through the Cerri Complex), up to its terminal station located at Ezeiza just outside of Buenos Aires. Neuba II is a principal source of gas for the Federal District and the greater Buenos Aires area.

Other Pipelines. Our other pipelines include the Cordillerano pipeline, built in 1984, which receives gas from the Neuquén Basin and supplies it mainly to three tourist centers in southern Argentina. In addition, we operate other minor pipelines, the high pressure transmission ring around Buenos Aires, the Chelforó-Conesa pipeline and other pipelines known as gas transfer pipelines.



36







Information regarding gas transportation system expansion is included in “Item 4. Our Information—Business Overview—Gas Transportation Regulated Business—Pipeline Operations—Pipeline Expansions.”

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