Renewables

Southern Cone Energy Integration Accelerates: Gas Pipeline Deal Signed and Itaipu Negotiations Resume

Alberto Cruz
July 9, 2025
2 min

Southern Cone Energy Integration Accelerates: Gas Pipeline Deal Signed and Itaipu Negotiations Resume


Argentina and Paraguay Sign MOU for Bi-Oceanic Gas Pipeline

Argentina and Paraguay have officially signed a memorandum of understanding to begin detailed studies on a new natural gas pipeline linking Argentina’s Vaca Muerta basin to the Paraguayan Chaco—and potentially beyond. The agreement, inked during the Mercosur Summit, establishes a bilateral technical working group that will assess the economic, logistical, and environmental feasibility of the project.

Proposed to follow the route of the under-construction Bi-Oceanic Highway, the so-called Bioceanic Gas Pipelinewould allow for streamlined infrastructure development while expanding regional energy access. The pipeline is expected to deliver low-cost natural gas from Argentina's prolific shale reserves in Neuquén province to Paraguay’s industrial sectors, offering a cost-effective alternative for energy-intensive industries.

There is also growing momentum for the pipeline’s extension into Brazil, with the route possibly crossing the Carmelo Peralta–Porto Murtinho border and eventually connecting both the Atlantic and Pacific coasts—fulfilling its "bi-oceanic" vision. The project could become a cornerstone of Southern Cone energy integration, with Paraguay’s portion alone estimated to stretch over 530 kilometers.



Brazil–Paraguay Relaunch Negotiations on Itaipu Treaty Review

In parallel to the pipeline announcement, Brazil and Paraguay also agreed to resume high-level negotiations on the long-awaited revision of Annex C of the Itaipu Treaty—an essential component that governs the financial and operational framework of the Itaipu Binational Hydroelectric Plant.

Presidents Luiz Inácio Lula da Silva (Brazil) and Santiago Peña (Paraguay) held a bilateral meeting on the sidelines of the Mercosur Summit to address political tensions and reactivate stalled dialogue. The two leaders reaffirmed their commitment to resolving outstanding diplomatic issues and instructed their respective foreign ministers to urgently restart the treaty talks.

Annex C, which reached its 50-year revision milestone in 2023, defines the pricing, energy distribution, and debt repayment mechanisms for the massive hydroelectric facility shared between the two countries. Talks had been paused in April amid political controversy, but both governments now signal readiness to finalize the new terms in the coming months.



Regional Energy Dialogue Gains Strategic Momentum

These developments underscore a growing regional push toward energy cooperation, infrastructure integration, and the modernization of strategic bilateral agreements. As Latin American nations seek to strengthen resilience and secure affordable, cleaner energy sources, coordination on cross-border infrastructure projects—such as pipelines and shared power generation—will be crucial.



Stay tuned to The Net-Zero Circle as we continue to track critical policy and infrastructure shifts across Latin America’s evolving energy landscape.

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