AES Brasil Seeks to Start Shuttered Plant With Petrobras
Brazilian and Argentine government officials are negotiating the deal to secure gas for the Uruguaiana plant after YPF suspended shipments of the fuel in 2008, Chief Executive Officer Britaldo Soares said in an interview today in Barueri, Brazil. The shuttered plant costs as much as $7 million a year to maintain, he said.
AES Brasil is seeking compensation from YPF at the International Chamber of Commerce arbitration tribunal for the suspension of the shipments, which occurred when the Argentine company was controlled by Spain’s Repsol SA. (REP) Supply was cut as Argentina faced gas rationing to fight shortages of the fuel. A ruling probably will be made by year-end, Soares said.
“There is a Brazilian interest to have Uruguaiana back,” Soares said. “It’s 640 megawatts not working today -- that’s 10 percent of what the country needs” to add annually in generating capacity to meet demand, he said.
Petrobras could supply the gas from fields in Argentina or by buying liquefied natural gas and processing it at an Argentine plant before sending it to Urugaiana, Soares said.
AES is making some investments now to prepare the plant to resume output of about 170 megawatts as soon as January, and it may reach full capacity in March, Soares said.
The press office from Brazil’s Energy Ministry couldn’t immediately comment, an official said by phone. Jessica Rey, a spokeswoman for the head of the Argentina Energy Commission, declined to comment. Petrobras Argentina’s press office in Buenos Aires didn’t respond to e-mailed requests for comment.
Petrobras Argentina gained 1 percent to 2.92 pesos at 2:11 p.m. in Buenos Aires today after sliding as much as 0.7 percent.
A deal to restart Uruguaiana would occur as AES tries to make its Brazilian operations more efficient amid tighter government control on the electricity industry as President Dilma Rousseff seeks to drive down power prices, Soares said.
AES’s Brazilian distribution unit, Eletropaulo Metropolitana Eletricidade de Sao Paulo SA, is seeking to sell 250 million reais worth of real estate, he said. Eletropaulo will reach an accord “soon” for about two-thirds of that amount, Gustavo Pimenta, vice president of services, said today at the same interview at the company’s headquarters.
Eletropaulo’s shares have dropped 63 percent this year, making it the fourth-worst performer in the 818-member MSCI Emerging Markets index, after Brazil’s power regulator Aneel in July said the company needs to reduce rates by 9.3 percent.
The distributor has appealed Aneel’s decision, arguing the regulator didn’t take into consideration 500 million reais in investments made between 2007 and 2011, Soares said.
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