Margarita Chun: Thank you, Nico. Our next question comes from Rafal Nagano from Credit Suisse. Is there any additional value being discussed on the ? If so, could you share with us how much? And do you see any risk of reverting pay of the $37 million provision due to the injunction from given you only receive part of this amount so far.
Nicolas Mindlin: So no, the full amount of this award, including interest is the $37 million. We already collected almost $21 million and there are still $15 million spending. The protection action presented by has been rejected. So I see very little chance of that being revertive. And now we are following the necessary steps to collect the other $50 million spending.
Margarita Chun: Thank you, Nico. Our next question comes from Alejandra Aranda from Bank of Itau. Your first question is kind of already answered. It’s about the plans of volumes in the upstream business in the first and second half of this year. What to expect in terms of cost for this segment, the E&P segment?
Gustavo Mariani: Sorry, Alejandra. I think similar to the first question. In terms of volume, we are expecting first and second quarter, while there is no new infrastructure capacity to extract the gas from the Neuquina Basin to our volumes to remain below 10 million cubic meters of natural gas per day. Once the new pipeline is ready during the winter, our production should jump to around 16 million cubic meters of natural gas per day. And by the end of the year, during our spring going back probably to 13, hopefully 14 — between 12 million and 14 million cubic meters of natural gas per day. That’s what we are expecting in terms of sales this year.
Margarita Chun: Thank you, Gus. The second question of Alejandra is regarding nonconventional renewable energy. How should we think about nonconventional renewable energy investments or acquisitions going forward? Do you have a target in terms of this generation source that would — that you would like to reach in the next few years?
Gustavo Mariani: No, we don’t have a target but we do — but we would like to grow as much as possible with profitable process. We have shown that by last year, we acquired from our partner of their stake that was 50% of 100-megawatt wind farm. That was — we also are about to complete. We have been — last year, we have been investing in our — in PEPE IV showing here and 1 megawatt expansion already 36-megawatt are online. So that adds to the 50. So we increased last year, 130 megawatts our capacity. And we also bought Parcadauco at the end of the year over 100 megawatts. So we increased our renewable capacity by 230 megawatts last year. And we have launched a project that is comprised of a total of 300 megawatts. The first phase we are doing 100 that is already underway and we hope to that this new park will be ready by second quarter of 2024 but again, we don’t have a goal but we would like to complete this 300-megawatt expansion within the next couple of years.
Margarita Chun: Thank you, Gus. The last question of Alejandra is regarding the LNG project. Could you comment on where TGS is regarding project study? And what do you need in terms of legislation and incentives to move forward with this project.
Gustavo Mariani: That’s a very good question, Alejandra. TGS is working on the engineering of this project which is quite complex and takes longer than we had originally expected. But we are working with several international companies to help us on the engineering of the project. Regarding the law, yes, this has been mentioned over the — in the media, this is a project where Argentina is going to compete against — in a market that is quite competitive. Obviously, the spot market of LNG is not the same as long-term contracts. Long-term contracts are at much cheaper price than we have been seeing on the spot LNG market. So — and this is — we need to be able to build a project that is very competitive internationally wise.
The project that we are envisioning is a rather small project vis-a-vis the huge projects that you see in other parts of the world. So there is a problem of scale that makes it less competitive. So it’s important both the fiscal incentives that we hope this new law will provide as well as the certainty regarding the export permits that given our history, it’s important. Going forward, I think it’s not going to be that relevant because thanks to Vaca Muerta, Argentina knows that we have enough reserves for several centers going forward. So it makes no sense as it has happened in the past to restrict export of natural gas. So what is more important and I think about the law is the need of fiscal incentives to make it competitive with other international LNG projects.
Margarita Chun: Thank you, Gus. Our next question comes from Christian and Ezequiel Fernández from Balanz. They have 3 questions. The first one is, can you explain a bit how are the process and new rules for gas exports into Chile? What type of authorizations you need to get? How much in advance you have to apply for this? How we determine to who has priority of gas exports among all large time E&Ps.
Gustavo Mariani: Thank you for the question, Christian and Ezequiel. Gas exports are quantified — are qualified –. Yes, there are quotas based on a formula that relates to the volume that its producer has been able to win in the several rounds of the plant gas. So that is — so your success in the plant gas is what determines the quotas of the export quotas. There is also a floor price at which you cannot export gas to Chile below that price. I’m not sure but I think it’s around currently, it’s around $7.50 or $8 per million of BTU. And — what else? And the policy of Argentina is that first, local gas is to consume in Argentina. And so if there is — what has been happening in this summer and it will also happen during the winter — during the beginning of the winter until the new pipeline is ready.
And probably even after the new pipeline is ready, is that the production capacity of the Neuquina Basin exceeds the equation capacity of the Neuquina Basin towards Argentina. That’s why we will have capacity to gas to Chile, not only as we are doing now during the summer and during the winter, while the new Netrisner Kishner pipeline is ready. But also, it may happen that even with the new pipeline that will bring an increase in evacuation capacity from the Neuquina Basin of 11 cubic meters of natural gas per day. It could be the case that the increase in production in Neuquina Basin is even higher than that. So we might be able as a country to continue exporting gas to Chile throughout the winter. I think that answers the question.
Margarita Chun: Thank you, Gus. The second question of balance was regarding the LNG project that was already answered. The third and last question is about the cash flow generation. What are you thinking about the cash uses?
Gustavo Mariani: Well, cash usage for this year, I think Lida has already talked about it but we have this year one of our probably most aggressive CapEx plan in the past few years. We have a CapEx plan for power generation of around $250 million. That is comprised of maintenance CapEx and the buildup of our 6 wind farm, PEPE VI. We think we will be spending around $150 million, around that figure this year. That is how the $250 million for power generation is comprised. And for E&P, we will be certainly doing the most aggressive CapEx plan over the past few years in order to be able to increase our production from 11 cubic meters of natural gas per day to 16 million cubic meters of natural gas per day. And that is something we are already working on and we need to achieve.
I think we will be able to achieve that figure by — once the new pipeline is online by early this winter. And how we are going to finance that through our own cash flow generation. And as I mentioned before, taking advantage of our financing capabilities in the local peso market.
Margarita Chun: Thank you, Gus. Our next question comes from Alejandra Aranda from JPMorgan. The first question regarding the 2023 bond was already answered. The second question is CapEx expectation given the increase in production is already sort of answered. So thank you, Alejandra, for the question. The next one is from . How much dollars will add — and PEPE III PPA in terms of EBITDA on a full year basis.
Lida Wang: It’s annually will $100 million more or less. And PEPE IV, it’s 81 megawatts of store capacity will add around $22 million of EBITDA per year.
Gustavo Mariani: Just the $100 million that Barragan will add, that’s full 100% of full company, we own 50% of that.
Lida Wang: Correct.
