(Bloomberg) -- Apache Corp., the U.S. producer buying assets from BP Plc for $7 billion, signed an agreement to supply Pampa Energia SA, Argentina’s largest power producer, with natural gas, said the head of Apache’s Argentine unit. The accord will allow Apache to sell the fossil fuel under the government’s gas plus program, which allows producers to sell at unregulated prices, Apache Argentina head Jon Graham said today in an interview in Buenos Aires.
The two companies also agreed to form a joint venture to develop so-called tight gas fields in the southern Argentine region of Patagonia, Graham said. Under terms of the agreement with Apache, Pampa will buy 800,000 cubic meters of gas per day of gas at a cost of $5 per million British thermal units, and develop an additional 700,000 cubic meters.
Pampa Energia, based in Buenos Aires, is seeking to ensure natural-gas supplies for its plants as Argentina faces power shortages. More than 300 industrial users suffered power cuts during the past two months as the government sought to ensure residential consumption.
Last year, Pampa signed an agreement with YPF SA, Argentina’s largest oil and gas producer, to form a joint venture to develop gas in Neuquen. Pampa expects to complete this year the 180-megawatt expansion of its Loma de la Lata power plant and wants to ensure gas supplies for it.
Apache, based in Houston, agreed on July 20 to buy assets in North America and Egypt from BP, the U.K. company battling a record oil spill in the Gulf of Mexico.
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Written by Rodrigo Orihuela for Bloomberg.com
Source: http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aPKnafN7ZzCE
