Flavia Royón was interviewed by the editor of Magazine Energía en Movimiento and talked about the vision of the Secretary of Energy and her political space about the energy sector.

Topics such as oil, gas, renewable energies, nuclear and mining were covered.

What is the vision of your space towards the energy sector of oil, gas, renewable energies and mining?.

As for the oil and gas sector, Flavia Royón stated that considerable progress has been made, not only with the completion of the first stage of construction of Néstor Kirchner gas pipeline but also with the reversal of the North gas pipeline, with the expectation of having this reversal complete by May 2024.

In her opinion, these advances predict an extremely positive and promising outlook for the sector that will drive a significant development in Vaca Muerta region.

In this sense, the energy sector, particularly when it comes to oil, is at a turning point.

It not only ensures the self-sufficiency of our nation but also visualizes the possibility of regional exports during summer.

She stated that the Liquefied Natural Gas (LNG) project has been defended in Congress. This initiative would promise to generate thousands of jobs in the country, boost the growth of the industry and generate foreign currency. The development of gas from Vaca Muerta and the sustained growth of oil has been increasing steadily in exports. She added that, in the private sector, progress is being made in the construction of the necessary infrastructure to consolidate these advances. The rehabilitation of OTASA, the pipeline to Chile, and the ongoing investments of Oldelval, Oiltanking and YPF’s Vaca Muerta Sur projects were recently completed.

What are your objectives with respect to domestic energy supply and possible exports? Do you plan to develop infrastructure such as, for example, the creation of deep water ports to facilitate exports? 

She answered firmly that the internal and export supply have been set as objectives to comply with and stressed that both the expansions of OIltanking and the Liquefied Natural Gas (LNG) project will provide for an expansion of the port infrastructure.

All of this is framed within an ambitious view for the energy sector, whose aim is to change rapidly the negative balance that had been experienced and consolidate itself as a generator of foreign currency for the country.

Concerning the production regulations between the nation and the provinces, is there any project related to any regulation or modification that is expected to be carried out?

The Secretary of Energy is focused on exploring the possibility of medium-term contracts for the export of oil and gas and in this way boost our position in the international market, though they are not thinking about modifying existing regulations that affect the provinces at this moment.

Besides, new regulatory frameworks and tax incentives are being considered for the projects like that of Liquefied Natural Gas (LNG) and of the hydrogen one, seeking to promote the development of these energies to go on strengthening the sector.

At what stage is the project with Petronas for the issue of LNG plant?

Flavia Royón explained that the project between Petronas and YPF is at an initial stage and that to move forward successfully, it is essential to have a regulatory framework of fiscal stability. This applies not only to the Petronas/YPF collaborative project, but also to other projects.

The Secretary stated that with an adequate regulatory framework, the joint project between Petronas and YPF could move forward in the first engineering stage. She told us to be aware of the importance of taking into account that we are dealing with an ambitious project that will demand approximately two or three years of construction. 

Is it planned to give priority to national companies to providing them with equipment, machinery, tools, services and trained human resources?

She stated that giving priority to national companies has been a constant line of action of the Secretariat, from the Gas Plan to the regulation of 277, the LNG and hydrogen bill. All these plans contemplate a minimum percentage of domestic industry compliance. Then, of course, the issue of hiring labour and suppliers as well as national industrial development is the focus of the Secretariat, reflected transversally in all the projects carried out.

What is your vision about energy sources such as hydraulic and nuclear power, as they are so important within the energy matrix?

Flavia Royón made a point of saying that Argentina is among the 32 countries that produce energy from nuclear development and that this year the focus lies on completing the strategic project “Carem”, one of the most advanced modular nuclear reactors under construction worldwide.

She also expressed the wish of the Secretariat to advance in the construction of the fourth nuclear power plant. To achieve this, the financial issue should be solved and besides, at the moment, they are focused on the extension of the useful life of Atucha I and the repair of Atucha II. She said that the nuclear sector is undoubtedly a strategic one for Argentina. It has developed the Carem, being one of the few countries that has a national industry capable of developing reactors of this type.

About the issue of hydroelectric energy, the Secretariat of Energy has reported that Argentina has around 22,000 MW of projects to incorporate and this is a very important goal for the Secretariat to achieve. That is why, they aim at revitalizing the development plan for hydroelectricity in Argentina. Currently, it is a must, not only because it is clean energy, but also because the water management is a key issue. So, work is being done to find the funding to be able to strengthen the development plan of the new hydroelectric projects.

As for the renewable energies there has been a significant growth. Do you have it as a goal to go on with the exploitation and the growth of this resource?

She confirmed this and went on to highlight that Argentina has a huge potential for solar energy in the north of the country and wind energy in the south.

The second envelope of the economic offer has already been submitted and we are in the pre-award stage of the renewable energy bidding process, which was carried out during this administration.

The Secretary of Energy reported that when they went out to look for 600 MW, more than 200 projects were presented, which shows clearly that it is a sector that raises interest. But to be able to incorporate more renewable energies, the infrastructure limitation of high voltage transmission lines must be solved; another priority of this administration.

She also pointed out that between the lines of started projects that have been resumed and those that we put out to tender, almost five thousand kilometres of high voltage lines will be incorporated. Similarly, she gave the example of North Atlantic and South Atlantic line; works which had been both stopped and then resumed; allowed the integration of four hundred and forty four kilometers of high voltage lines to the SADI. The Secretariat also reported that works have already been tendered in Salta, Tucumán, Catamarca and soon in Formosa and Santiago del Estero.

She also told us about a Master Plan that has been elaborated for the development of electric transmission and also about regulations that have been changed to be able to carry out, together with the private sector, the construction of high voltage line projects.

Argentina needs to work out this infrastructure bottleneck to incorporate more renewable energies into the system.

What can you tell us about the Hydrogen project?

Th Secretary of Energy informed that the aim of the project was the promotion of the use of green hydrogen as, undoubtedly, hydrogen is a sector that owns a new technology and Argentina has comparative advantages to implement it.

Flavia Royón stated that the aim of the project is to promote the growth of green hydrogen with the participation of the national industry and local capacities., hoping that Argentina can position itself worldwide in this promising area.

What priority do the biofuels have within the energy system?.

Flavia Royón made it clear that the biofuel is a sector with great potential in Argentina and explained that Argentina is going through a complex macroeconomic and economic situation, with the worst drought in the last eighty years.

As a result of this, the sector is experiencing significant complexity in terms of prices. But a formula has been regulated for the determination of prices as from this year, and monthly price adjustments are being made.

She added that credit lines have been created for biodiesel working capital, and a call for new bioethanol quotas is about to be issued. And assured that the management is betting on its development, and that Argentina has a great potential. Above all, it is of great importance for the development of regional economies.

How do you plan to implement the updating of tariffs?. Even talking about something that Neuquén is claiming for, stating firmly that the tariffs should be cheaper in the province than in the rest of the country

The Secretary of Energy explained that there is an integrated system, that as it is connected to the system, both generation and demand are important. There is a line to connect supply and demand; then, there is a regulation in force which specifies clearly that to be able to have service and energy 24 hours, seven days a week, there is a system that pro-rates its costs and that works in an integrated manner.

As for tariff setting, it has been informed that the energy prices for the next quarter have not yet been fixed, but the segmentation has already been implemented, so that the high income sector already pays the full cost of energy in the same way than the sector that did not request the subsidy. The low-income or middle class sectors that still need the support of the state do have it. And the rest of the sectors that can afford the cost of energy, will have the subsidies gradually withdrawn.

Moving on to the mining issue, what is the vision about the important mining resources that we have?

Flavia Royón highlighted the huge potential that Argentina boasts thanks to copper. Energy transition opens a window of opportunities in the country, especially in the field of energy such as Liquefied Natural gas (LNG) and hydrogen, as well as in critical minerals. where the lithium, the copper and the rare earths play a relevant role.

The Secretariat gave details about the six copper projects that Argentina has and that are in advanced stages, highlighting the projects of José María, Pachón, Filo del Sol in San Juan, the Taca Taca project in Salta and Agua Rica in Catamarca. It means another window of opportunity for the country, taking into account that a single copper project is equivalent to, at least, four lithium projects in terms of investment, generation, exports and labour generation.

That is why these projects should be made viable. Although currently, there is a mining investment law that provides fiscal stability, it is necessary to work, adjust or discuss different issues, such as the tax burden and others, so that these projects can move forward and begin their construction.

The Secretariat highlighted that the intention of the administration is that these projects should be developed, because mining is giving an opportunity, especially in Northern Argentina, which has an asymmetric development with respect to the center of the country. It is thanks to the creation of high quality jobs and development of industry in places such as Argentinean puna. This, in turn, is an opportunity for a more harmonious territorial development of the country.