Pan American Energy Commences Gas Exports from Vaca Muerta to Uruguay via Cruz del Sur Pipeline

Pan American Energy (PAE) has initiated natural gas exports from Argentina’s Vaca Muerta shale formation to Uruguay, fulfilling a contract with Uruguay’s state utility, Administración Nacional de Usinas y Trasmisiones Eléctricas (UTE). The gas is delivered through the Cruz del Sur pipeline, a binational infrastructure linking Punta Lara in Buenos Aires province with Colonia and Montevideo. To date, shipments have exceeded 7 million cubic meters, with volumes expected to rise during Uruguay’s austral summer when electricity demand peaks. The supplied gas fuels the Punta del Tigre combined-cycle thermal power plant, a major component of Uruguay’s power generation system.

The Cruz del Sur pipeline consortium includes PAE, Uruguay’s ANCAP, Harbour Energy, and Shell. The infrastructure, long underutilized, has been reactivated due to increased gas production from Vaca Muerta and enhanced transport capacity. This agreement enables Uruguay to replace costlier and more polluting liquid fuels in thermal generation with Argentine natural gas, thereby reducing operational expenses and lowering the nation’s carbon footprint. Uruguay’s energy ministry emphasizes that gas imports cut electricity production costs by approximately 50% compared to alternative thermal fuels.

For Argentina, this arrangement provides an outlet for surplus gas production, generating export revenues and reinforcing Argentina’s role as a dependable regional energy supplier. It highlights a broader shift whereby Vaca Muerta gas exports are gaining strategic priority beyond domestic consumption. Pan American Energy is also part of the Southern Energy consortium, aiming to launch liquefied natural gas (LNG) exports by 2027 via a floating liquefaction unit off Argentina’s Atlantic coast. Southern Energy recently secured a long-term LNG sales contract with Germany’s Securing Energy for Europe (SEFE) for two million tons per year over eight years.

The reactivation of the Cruz del Sur pipeline reflects growing regional energy integration, supported by infrastructure revitalization and regulatory stability. It reinforces the gas sector’s export potential and aligns with Argentina’s strategy to expand its international gas footprint, extending from pipeline exports to global LNG markets. Uruguay benefits from a more diverse, cost-effective energy matrix, contributing to energy security and the nation’s decarbonization objectives.