About Transportadora de Gas del Sur
Transportadora de Gas del Sur S.A. (TGN) operates as a transporter of natural gas in Argentina. The company is a subsidiary of Compañía de Inversiones de Energía S.A (CIESA). The company operates the most extensive pipeline system in Latin America in terms of length, delivering approximately, as of December 31, 2022, 60% of the total natural gas transported in Argentina, through 5,736 miles of pipeline, of which the company operates 4,775 miles on an exclusive basis pursuant to the License (the 'Natural Gas Transportation'). The company's transportation system connects the Neuquén, San Jorge and Austral basins, the major natural gas fields located in the south and west of Argentina, to the greater Buenos Aires area and the major consumption centers of southern Argentina. During the year ended December 31, 2022 (Fiscal Year 2022), approximately 83% of the company's revenues of this business segment corresponds to firm natural gas transportation services under firm long-term natural gas transportation contracts. Natural gas transportation customers with firm contracts pay for the contracted pipeline capacity regardless of actual usage. The company's Natural Gas Transportation business is regulated by ENARGAS. The company conducts its Natural Gas Transportation business pursuant to the License, which is scheduled to expire in 2027 and which is extendable for an additional ten-year period at the company's option if certain technical conditions described in the License are met. ENARGAS (Ente Nacional Regulador del Gas) is required at that time to evaluate the company's performance and make a recommendation to the Executive Branch for the extension of the company's License. The License gives the company the exclusive right to operate the existing southern Argentine natural gas transportation pipeline system. The company's natural gas transportation system connects major natural gas fields in southern and western Argentina with both distributors and large consumers of natural gas in those regions, as well as in the greater Buenos Aires area, the principal population center of Argentina. The company is also one of the largest processors of natural gas and one of the largest marketers of Liquids in Argentina. The company operates the Cerri Complex and the associated logistics and storage facilities of Puerto Galván located in Bahía Blanca in the Province of Buenos Aires where Liquids are separated from the natural gas transported through the company's pipeline system and stored for delivery. Due to its strategic location within the Argentine natural gas transportation system, the company's Cerri Complex can process gas proceeding from the Neuquén, San Jorge and Austral basins. This provides the plant with great versatility in terms of natural gas availability, and the possibility to select the gas that is processed according to its quality (liquid contents). The company also provides midstream integral solutions related to natural gas production, from the wellhead up to the transportation systems. In addition, through the company's subsidiary Telcosur, the company provides telecommunications services. Natural Gas Transportation As a transporter of natural gas, the company receives natural gas owned by a shipper, usually a natural gas distributor, at one or more intake points on the company's pipeline system for transportation and delivery to the shipper at specified delivery points along the pipeline system. Under applicable law and the company's License, the company is not permitted to buy or sell natural gas except for the company's own consumption and to operate the pipeline system. The company's pipeline system connects major natural gas fields in southern and western Argentina with distributors and other users of gas in those areas and the greater Buenos Aires area. TGN, the only other natural gas transportation operating company that supplies the Argentine market, holds a similar license with respect to the northern pipeline system, which also provides natural gas transportation services to the greater Buenos Aires area. Almost all of the company's natural gas firm contracted capacity is subscribed for at the maximum tariffs allowed by ENARGAS. Substantially all of the company's remaining natural gas deliveries were made under natural gas interruptible transportation contracts entered into predominantly with four natural gas distribution companies, power plants and industrial customers. Interruptible contracts provide for the transportation of natural gas subject to available pipeline capacity. Expansions of the System. In February 2017, the Ministry of Mines and Energy called for a national public tender for the purchase of pipelines to extend the natural gas network in some areas of the Province of Santa Fé, the Patagonian Andes and the coast of the province of Buenos Aires. Within this framework, the company entered into a Transitional Union Agreement ('UT') with SACDE Sociedad Argentina de Construcción y Desarrollo Estratégico S.A. ('SACDE'), a related company, for the purpose of participating jointly in the National Public Bid No. 452-0004-LPU17: Assembly of Pipes for the Construction of the Project 'Expansion of the Natural Gas Transportation and Distribution System.' In this regard, the Ministry of Mines and Energy awarded to the aforementioned UT the construction of the Regional II-Recreo/Rafaela/Sunchales Regional Gas Pipeline. Customers and Marketing The company's principal service area is the greater Buenos Aires region in central-eastern Argentina. The company also serves the more rural provinces of western and southern Argentina. As of December 31, 2022, the company's service area contained 6.3 million end users, including 4.1 million customers in the greater Buenos Aires area. Direct service to residential, commercial, industrial and electric power generation end users is mostly provided by four gas distribution companies in the area, all of which are connected to the company's pipeline system: Metrogas S.A., Naturgy Argentina S.A., Camuzzi Gas Pampeana S.A. and Camuzzi Gas del Sur S.A. These natural gas distribution companies serve, in the aggregate, 65% of the natural gas distribution market in Argentina. The other five Argentine distribution companies are located in and serve northern Argentina and are not connected directly to the company's pipeline system. The company plays a leading role in the natural gas industry in Argentina and satisfy 70 direct customers and 6.3 million indirect customers for the year ended December 31, 2022. As of December 31, 2022, the total contracted firm or 'ship or pay' capacity was 83.1 MMm3/d with a weighted average life of approximately 11 years. Pipeline Operations Natural gas daily average injection to the pipeline system operated by the company amounted to 68.6 MMm3/d in 2022. Natural Gas Transportation System Improvements: The company operates its pipeline system and the pipeline constructed pursuant to the Gas Trust in accordance with Argentine natural gas transmission safety regulations, which are substantially similar to the U.S. federal regulations. In order to identify changes in the safety regulations that the company's pipeline system has to comply with, the company conducts inspections for the purpose of detecting increases in the population density in the areas through which the company's pipeline system extends. The 'greater' Buenos Aires area comprises the City of Buenos Aires and its surrounding area. One end of the company's natural gas transportation system (the 'Buenos Aires Ring') is located in the greater Buenos Aires area, where the company transfers natural gas for further delivery to major natural gas distribution companies. System Improvements. In 2022, the company's pipeline system satisfactorily met the demands generated by the winter season and the requirements of ENARGAS. To that effect, the company carried out several maintenances, prevention and inspection works. During 2022, the company conducted integrity assessment tasks, such as in-line inspections along 1,246 miles of pipelines and direct assessment through CIS+DCVG techniques (sections with no Scraper Traps) over 286 miles of pipelines. The company launched an inline inspection plan with 'EMAT' technology to detect cracks colonies, within the framework of the SCC assessment and mitigation plan. In the year 2022, the company inspected 226 miles in the Neuba I Pipeline. Gas Supply. In 2022, 60% of the natural gas transported by the company's system originated in the Neuquina basin with the remainder coming primarily from the Austral basin and the re-gasifying LGN tanker located in Bahía Blanca. The company's pipeline system is connected to the Neuquina, Austral and San Jorge Gulf basin. The company is not connected to the Cuyo or Northwest basin. Distribution of the Vaca Muerta Formation in the Basin and the company's Infrastructure Neuquina Basin. The largest natural gas basin and the major source of natural gas supply for the company's system is the Neuquina basin, located in west central Argentina. Competition To a limited extent, the company competes with TGN on a day-to-day basis for natural gas interruptible transportation services and, from time to time for new natural gas firm transportation services made available as a result of expansion projects to the natural gas distribution companies to whom both the company and TGN are either directly or indirectly connected (Camuzzi Gas Pampeana S.A., Metrogas S.A. and Naturgy Argentina S.A.). The company competes directly with TGN for the transportation of natural gas from the Neuquina basin to the greater Buenos Aires area. Liquids Production and Commercialization segment The company's Liquids production and commercialization activities are conducted at the company's Cerri Complex, which is located near the city of Bahía Blanca in the province of Buenos Aires. In the Cerri Complex, ethane, LPG and natural gasoline are extracted from natural gas, which arrives through the company's three main pipelines from the Neuquina and Austral natural gas basins. The company owns the Liquids obtained at its Cerri Complex. The company purchases natural gas in order to replace thermal units consumed in the Liquids production process. These natural gas purchases are negotiated with certain natural gas distributors, traders and producers. During 2022, all of the company's Liquid sales were on the company's own account. The company's sales of Liquids in the domestic market are regulated through the Households with Bottles Program (as defined below) of the Ministry of Energy in order to guarantee the supply at reasonable prices. Liquids production in 2022 reached 1,122,639 tons. During 2022, propane and butane deliveries to the export market were operated on a spot basis, capturing opportunities associated with different market niches, which allowed for a considerable increase in the individual fixed premiums of each operation. The company also continues to advance its positioning in the Brazilian market by maintaining direct maritime exports (without intermediaries) to Brazilian LPG distributors, which began in 2021. In addition, in September 2022, the first direct maritime export to a Brazilian industrial user was carried out. In addition, in December 2022, the company carried out the largest LPG export by sea for private Brazilian companies. With respect to the export of natural gasoline, during 2022 and until February 2023, such gasoline was commercialized through a contract entered with Trafigura Pte Ltd. at the international price less a discount. As of December 31, 2022, a new contract was entered into with Trafigura Pte Ltd., which is valid until February 2024. This contract has similar conditions to the contract in force during 2022, although it has a greater discount in the international price received. The countries with which the company operates under this scheme are Chile, Paraguay and Brazil. During 2022, the company continued to market LPG through the land mode, dispatching approximately 16,156 trucks (372,813 tons) of own product. The company's entire ethane production is sold to PBB through a long-term agreement signed on September 6, 2018. This agreement will expire on December 27, 2027 and includes, among other conditions, TOP and DOP commitments for minimum annual per year, which is lower than the TOP quantities included in the 2015 ethane agreement with PBB. The company's Liquids Production and Commercialization segment also comprises storage and dispatch by truck and subsequent shipment of the liquids extracted at the Cerri Complex to facilities located in Puerto Galván. LPG and natural gasoline are transported via two eight-inch pipelines to the loading terminal at Puerto Galván. Ethane is piped via an eight-inch pipeline to the PBB olefins plant, which is the sole outlet for ethane from the Cerri Complex. Any ethane extracted at the Cerri Complex that cannot be sold to PBB is reinjected into the pipeline. The company anticipates that new oil and natural gas developments in Argentina will provide new opportunities in the Liquids Production and Commercialization business and lead to related increases in revenues from the company's Natural Gas Transportation and Liquids Production and Commercialization businesses. Regulation International Market In the international market, the company commercializes propane, butane and natural gasoline to international traders and other clients. Environment The company's production and liquid storage facilities are subject to Law No. 11,459 of industrial establishment of Buenos Aires. Other Services Midstream Services Through midstream services, the company provides integral solutions related to natural gas from the wellhead up to the transportation systems. The services comprise gas gathering, compression and treatment, as well as construction, operation and maintenance of plants and pipelines, which are generally rendered to natural gas and oil producers at the wellhead. The company's portfolio of midstream customers also includes distribution companies, big industrial users, power plants and refineries. The company's midstream activities also include the separation and removal of impurities, such as water, carbon dioxide and sulfur from the natural gas stream, and steam generation for electricity production. Small diameter pipes from the wellheads form a network, or gathering system, carrying the gas stream to larger pipelines where field compression is sometimes needed to inject the gas into the company's large diameter gas pipelines. The services are tailored to fit the particular needs of each customer in technical, economic and financial matters. This business segment includes the transportation and all related services provided in Vaca Muerta after the important gas pipe project carried out during 2019 which allow the company to comply with the agreements signed with the main natural gas producers in the area. In addition, the company provides operation and maintenance of pipelines services to the company's affiliate Gas Link S.A. ('Link'). In September 2017, the UT Río Neuquén was created by YPF, Pampa Energía and Petrobras Brazil, to expand for the next ten years, the services provided at the Río Neuquén Plant. A natural gas dehydration unit with capacity of 71 MMcf/d has been installed and several minor modifications in the plant have been performed. The company has entered into an UT with SACDE for the purpose of participating jointly in the National Public Bid No. 452-0004-LPU17: Assembly of Pipes for the Construction of the Project 'Expansion of the Natural Gas Transportation and Distribution System.' As a result of this bid, the Ministry of Mines and Energy awarded to the aforementioned UT the contract for the construction of the Regional II-Recreo/Rafaela/Sunchales Regional Gas Pipeline. As of the date of issuance of this Annual Report, construction works are in progress. Furthermore, the company intends to have a leading role in the development of Argentina's energy sector. For this reason, the company developed projects in the Southern Section and Northern Section in the Vaca Muerta fields. To make these investments viable, the company executed agreements with various natural gas producers and contracted natural gas treatment services for a period of 10 years. Additionally, the connection of the plan located in Tratayén to the Central West Gas Pipeline, belonging to TGN's regulated transportation system, was completed in 2020. In June 2020, two agreements were signed to provide in the Plaza Huincul Plant, the service of compression and conditioning of gas from the Cerro Bandera field - signed with Oilstone Energía S.A. ('Oilstone') in its role as operator of the Cerro Bandera concession - and from the Puesto Cortadera and Portezuelo Minas fields - signed with Oilstone in its role as operator of the Unión Transitoria de Empresas (Joint Venture) called Gas y Petróleo del Neuquén S.A. - Oilstone - Dorsal - Unión Transitoria -, both for a seven-year term. In order to provide this service, a third agreement was signed with Oilstone whereby the company executed the hydraulic test and connection works between an Oilstone gas pipeline and the company's compression and conditioning plant. On September 28, 2020, the company completed these works and in October 2020 the compression and conditioning service described above commenced. As a consequence of the increase in natural gas production levels recorded in the Neuquina basin, the company has recorded increasing levels of utilization of midstream facilities; this is mainly evident in the Vaca Muerta System, which started 2021 capturing and treating flows of around 3.5 MM3/d at the Tratayén plant and ended this year with flows of around 9 MM3/d. To cope with this flow growth, expansion works were carried out at the Tratayén Plant, which had been approved in 2020. These works, completed in September 2021, involved the installation of a new slug catcher and a new stabilizing tower. This effort was accompanied by the negotiation and closing of new service contracts (transportation and conditioning) with Shell Argentina and YPF in Bajada de Añelo and with Pampa Energía in El Mangrullo. As for the Río Neuquén Plant, during the year 2021 this facility saw an increase in incoming natural gas flows, which opens auspiciously opportunities to increase the services provided therein with potential capacity expansions. During February 2023, the company concluded the expansion works in Tratayén started in 2022 that consisted in the Installation of two modular gas conditioning plants through Joule Thomson technology, each with a capacity to treat 3.5 MM3/d of natural gas and of a new gasoline stabilizing tower. New Projects The company's strategy of focusing on the customer and innovation makes the company focuses on generating business and investment alternatives that allow the company to make its investment profitable and thus provide value to the company's shareholders. These projects will increase the capacity to provide services to the Vaca Muerta System, improving the profitability of the investment made by the company and providing security in the evacuation of gas volumes from producers. They also reinforce the company's commitment to Argentina's energy development and the company's strategy of making the investments made in the installation of the Vaca Muerta gas pipeline system profitable. In this sense, the company continues in conversations with the different producers in the basin in order to capture business opportunities that will allow the company to increase the company's portfolio of services and client portfolio. Telcosur (Telecommunications System) The company owns 99.98% of Telcosur, a telecommunications company created in September 1998 to provide value-added and data transportation services using the company's modern digital land radio telecommunications system with Synchronous Digital Hierarchy ('SDH') technology (which was installed for purposes relating to the company's gas transportation system). With respect to the telecommunications services provided by Telcosur, during the year 2022, agreements were reached that allowed increasing the capacity sold and consolidating the company's operations. In line with the strategy of consolidating the business in the medium and long-term, Telcosur reached agreements with new customers and was able to expand or renew existing agreements. Among the most relevant agreements entered into, the company can mention the following: Agreement with Shell Argentina S.A. ('Shell') During 2022, Telcosur entered into an agreement with Shell to link its plants in Bajada de Añelo and Sierras Blancas and its corporate network. The agreement consists of the provision of a data and internet transport service between the aforementioned plants for the operational management of the work. This agreement also involves the construction of a new fiber optic section through the access road to Tratayén, to reach Shell's Sierras Blancas plant. Agreement with Vista Oil & Gas Argentina ('Vista') The project consisted in the optical fiber linking of Telcosur's infrastructure in Tratayén with Vista's infrastructure in the Borde Montuoso field. Since the link was originally necessary for the gas pipeline connection between the company and Vista, Telcosur participated in the engineering definitions of such work in order to make available an extension of the fiber optic network of both parties with the purpose of generating the technical conditions to close the internet sale business. The execution of this project involved the linking of Telcosur's fiber optic network with Vista's network. Agreement with Pampa Energía - El Mangrullo Oilfield ('EMA') The project consisted in linking Telcosur's fiber optic infrastructure in Tratayén with Pampa Energía's infrastructure in El Mangrullo oilfield. In this opportunity, the linking point was defined in the Vaca Muerta Sur gas pipeline. In parallel with this network connection, an agreement was reached for the provision of internet service within the oilfield. In addition, and thanks to the works mentioned above, an agreement was reached with Claro Argentina S.A. ('Claro') to replace its satellite link for the transport of data from the mobile radio base that was previously in the field, and thus provide a better service to Pampa Energía at the site. Additionally, an annual maintenance agreement was reached with Pampa Energía. Installation of fiber optic network in Vaca Muerta During 2022, work progressed on the installation of a high capacity fiber optic network from Vaca Muerta Norte to Los Toldos for an extension of more than 20 miles, to provide telecommunications services to oil and gas producers and service companies in Vaca Muerta, which require a significant amount of data transmission for their operations and communications. In 2022, the fiber optic capacity was expanded in Vaca Muerta, making it possible to provide point-to-point or multipoint solutions with constant speed and high capacity, and due to its characteristics with the integration of voice, data, internet and video, it allows optimizing costs. New Technologies Progress was made with 'IoT' radio bases to expand Telcosur's portfolio of services provided to its customers. Augmented Reality and Drone services were added to Telcosur's service portfolio. In addition, the radio transmission system was expanded between the mainland and Tierra del Fuego, which increased network capacity and made a service agreement with new customers viable. In order to provide capacity in Río Grande to meet the demands of customers, such as Total, Carrier, YPF, Cirion, CGC and Telecom, among others, a fifth radio beam was added between the stations El Cóndor and Cañadón Alfa, which will increase the capacity of the Río Gallegos to Rio Grande section by approximately 200 MbPs. In addition, a fiber optic link between Río Gallegos and El Cóndor was enabled to transport 1 Gbps circuits. Property Gas Transportation The principal components of the pipeline system the company operates are as follows: Pipelines. The company renders natural gas transportation service through a pipeline system that is 5,736 miles long, of which 4,775 miles operated under the License on an exclusive basis. The company manages the transportation of natural gas over the remainder of the system under management agreements with the Gas Trust, which owns the remaining portions of the pipeline. The system consists primarily of large diameter, high-pressure pipelines intended for the transportation of large volumes of gas at a pressure of approximately 853-996 pound/square inch. 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 natural 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. Such performance also maintains and verifies the accuracy of the company's measurement instruments to ensure that these are functioning within appropriate industry standards and in accordance with the specifications contained in the company's service regulations. Compressor plants. Compressor plants along the pipelines recompress the natural 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 mainly turbine-driven compressors and, to a lesser extent, 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.). The company transports natural gas through four major pipeline segments: General San Martín, Neuba I Gas Pipeline, Neuba II Gas Pipeline and Loop Sur Gas Pipeline, as well as several smaller natural gas pipelines. General San Martín. This pipeline transports natural 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 Strait 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 the Province of 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 the northern Santa Cruz and southern Chubut Provinces. The natural gas pipeline primarily serves the districts and cities of Buenos Aires, La Plata, Mar del Plata, Bahía Blanca, Puerto Madryn and Comodoro Rivadavia. This pipeline was expanded in 2005 by the Gas Trust in order to satisfy the growing natural gas demand in the Argentine economy. This expansion resulted in the construction of 458 miles of pipeline and the installation of new compressor units. Neuba I Gas Pipeline (Sierra Barrosa-Bahía Blanca). Neuba I Gas Pipeline was built in 1970 and was expanded by the company in 1996. It is one of the company's two main pipelines serving the company's principal source of gas supply, the Neuquina 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 natural gas received from the Neuquina basin, particularly from the Sierra Barrosa, Charco Bayo, El Medanito, Fernández Oro, Lindero Atravesado, Centenario, Río Neuquén and Loma de la Lata natural gas fields. The gas delivered from Neuba I Gas Pipeline is subsequently compressed and injected into the Loop Sur Gas Pipeline and the General San Martín pipelines for transportation north to the greater Buenos Aires area. As part of the works scheduled to be completed in the Five-Year Plan, the company is executing the construction of a compressor plant in the town of Confluencia, Neuquén Province, which will allow the Neuba I Gas Pipeline to be interconnected with the Neuba II Gas Pipeline and thus grant a greater degree of flexibility to the operation of the natural gas transport system. Loop Sur Gas Pipeline. This gas pipeline was built in 1972 as an extension of Neuba I Gas Pipeline and runs parallel to a portion of the General San Martín gas pipeline. Located in the province of Buenos Aires, it transports natural gas from the Neuba I Gas Pipeline at the Cerri Complex in Bahía Blanca and terminates at the high pressure transmission ring around Buenos Aires, which the company also operates. The natural gas delivered by this gas pipeline constitutes a portion of the natural gas supply for the greater Buenos Aires area. Loop Sur Gas Pipeline is also connected to the TGN system and allows the company to deliver natural gas to or receive natural gas from TGN. Such transfers occur occasionally during periods of high demand for natural gas. Neuba II Gas Pipeline. The company's newest natural gas pipeline, Neuba II Gas Pipeline, was built in 1988 and is the company's second pipeline serving the Neuquina basin. Neuba II Gas Pipeline was expanded four times between 1996 and 2000, and again in 2008. Neuba II Gas Pipeline begins at 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 Gas Pipeline is a principal source of natural gas for the Federal District and the greater Buenos Aires area. In 2008, this pipeline was expanded as a part of the Second Expansion, resulting in the construction of 153 miles of natural gas pipeline. Other Pipelines. The company also operates the Cordillerano natural gas pipeline, built in 1984, which receives gas from the Neuquina basin and supplies it mainly to three tourist centers in southern Argentina. In addition, the company operates other minor pipelines, the high pressure transmission ring around Buenos Aires, the Chelforó-Conesa natural gas pipeline and other natural gas pipelines known as natural gas transfer pipelines. Ancillary Facilities Cathodic Protection System The company operates cathodic protection devices, which are located along the company's main pipelines. The objective of this system is to prevent the corrosion process. The corrosion process causes metal loss, which, depending on the severity of the damage, may cause pipeline ruptures. Cathodic protection equipment includes direct current rectifiers, and generators powered by thermic, turbine natural gas engines in locations where no electric lines are available. The system also includes an impressed current anode, which facilitates circulation of electricity through the circuit formed by the generator, the anode itself, the pipe and the land. Measurement and Control of the Transport System To guarantee the reliability of the facilities and optimize the operation of the transport system, it is necessary to have real-time information from the various measurement and control devices installed throughout the company's more than 5,769 miles of gas pipelines and 33 compressor plants. To that effect, the company has fiscal measurement stations associated with gas receptions from producer facilities and gas deliveries to the company's distributors or customers, in addition to the mediation equipment installed in the compressor plants to determine the volumes of pumped gas, fuel and other variables of operational interest. All the information generated by the field devices is collected by the company's SCADA/EFM system, transmitted through the company's communications infrastructure and centralized at the company's headquarters. The fiscal mediation information contains volumes and quality of gas, which is collected by the SCADA/EFM system and saved in a database for further processing by other corporate systems. In addition, the information is shared in real time with producers, distributors and ENARGAS in order to ensure the required auditability and transparency. Natural Gas Control System Located at the company's Buenos Aires headquarters, the gas control system controls scheduled gas injections and deliveries and allows the company to follow gas flows in real time. Data is received from compressor stations by phone and automatically from remote terminal units ('RTUs') installed in the receipt and delivery points equipped with the Electronic Flow Measurement (EFM) system. The information is normally collected by the supervisory control and data acquisition system (which has an ad hoc database that is updated every 30 seconds on average) and is then consolidated into other databases. In order to control gas injection and deliveries, the company has developed a software system called Solicitud, Programación, Asignación y Control, which, among other things, allows the company to control actual volumes and projected future injections to determine producer deviations. As part of this system, the company operates meteorological equipment and receive daily weather information from various sources, which is used for the purpose of forecasting natural gas demand. Natural Gas Measurement Shipped and delivered natural gas is measured through primary field facilities that are connected with RTUs. Such RTUs transmit the data to the Buenos Aires headquarters. This data is utilized to prepare reports for clients, shippers, producers and ENARGAS. Energy balances are also prepared in order to control the company's system efficiency. Liquids Production and Commercialization The company's Liquids production and commercialization activities are conducted at the company's Cerri Complex. It is located near the city of Bahía Blanca and is connected to each of the company's main pipelines. The Cerri Complex consists of an ethane extraction cryogenic plant to recover ethane, LPG and natural gasoline, together with a lean oil absorption plant to recover LPG and natural gasoline ('Liquids Production and Commercialization'). The facility also includes compression, power generation and storage facilities. The Cerri Complex processing capacity is approximately 47 MMm3/d. As part of the Cerri Complex, the company also maintains at Puerto Galván a storage and loading facility for the natural gas liquids extracted at the Cerri Complex. The Cerri Complex, including the Puerto Galván facility, is capable of storing 68,882 short tons of liquids. Other Services Midstream As part of this business segment, the company provides services related to natural gas including treatment, gathering and gas compression, which are rendered at two treatment plants and three gas compression plants with a total treatment capacity of 10.9 MMm3/d and a total compression capacity of 34,790 HP, respectively. Throughout the year 2019, the company successfully concluded assembly and pressurization works of an important Vaca Muerta gas pipe project that will be pivotal in the development of Vaca Muerta natural gas reserves. The execution of these works demanded great commitment from the company's team and compliance with all the terms agreed with the company's customers. The Vaca Muerta project was executed in three stages: Milestone 1: on April 30, 2019, the company finished the construction of the southern section of the Vaca Muerta pipeline, its connection to the northern Vaca Muerta pipeline and the segment that extends from connection to the project's conditioning plant (the construction of which is still ongoing) located in the city of Tratayén, Province of Neuquén. In addition, both an early conditioning plant (integrated to the definite conditioning plant) and the plant connection to the Neuba I Gas Pipeline began operations. Milestone 2: on November 3, 2019, the northern section of the Vaca Muerta pipeline began operations, connecting the Rincón la Ceniza field with the southern section of the Vaca Muerta pipeline. Milestone 3: on December 12, 2019, the northern section of the Vaca Muerta pipeline began operations, extending from the Los Toldos I South field to Rincón la Ceniza, connected with the section previously started. The completion of this section represented the completion of the northern section of the Vaca Muerta pipeline. This pipeline system goes through several hydrocarbon fields, including Bajada de Añelo, La Calera, Bandurria Sur, Fortín de Piedra, El Mangrullo, Aguada Pichana Este, Rincón la Ceniza, Los Toldos I Sur and Pampa de las Yeguas I and II. With the commissioning of the conditioning train installed in the Treatyén Treatment Plant and with the completion of the work to connect said plant to the Central West Gas Pipeline, belonging to the TGN transportation system, the company concluded the works that comprise the Vaca Muerta system, which has been operating since 2019. This system, which includes two gas capture pipelines and the aforementioned plant in Tratayén will be of vital importance for the development of the Vaca Muerta natural gas reserves. Additionally, the connection of the plan located in Tratayén to the Central West Gas Pipeline, belonging to TGN's regulated transportation system, was completed in 2020. Moreover, in September 2020, the company approved a project to expand the plant located in Tratayén. This project was commissioned in September 2021 allowing the company to increase the natural gas gathering capacity in the Vaca Muerta area, and thus, increase capacity for the company's midstream services. Telecommunication The company owns two interconnected networks beginning in the Buenos Aires Province, which consist of (i) a flexible and modern microwave digital network with SDH technology over more than 2,858 miles, which covers the Buenos Aires-Bahía Blanca-Neuquén routes to the West and the Buenos Aires-Bahía Blanca-Comodoro Rivadavia-Río Grande routes to the South, and (ii) a dark fiber optic network of approximately 1,056 miles, which covers the La Plata-Buenos Aires-Rosario-Córdoba-San Luis-Mendoza routes. There is also a network in the Patagonia region, which consists of a 'lit' fiber optic network of approximately 373 miles, which covers the Puerto Madryn-Pico Truncado route. History Transportadora de Gas del Sur S.A. was founded in 1992. The company was incorporated under the laws of Argentina in 1992.