TGS 20-F DEF-14A Report Dec. 31, 2024 | Alphaminr
GAS TRANSPORTER OF THE SOUTH INC
ALPHAMINR

TGS 20-F Report ended Dec. 31, 2024

Balance Sheet
Cash Flow
Income Statement
Debt
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
(Mark One)

☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2024

OR

☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
OR

☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report __________.

Commission file number : 1-13.396
TRANSPORTADORA DE GAS DEL SUR S.A.
(Exact name of Registrant as specified in its charter)

GAS TRANSPORTER OF THE SOUTH INC.
(Translation of Registrant’s name into English)

Republic of Argentina
(Jurisdiction of incorporation or organization)

Cecilia Grierson 355
26th Floor
C 1107 CPG City of Buenos Aires
Argentina
(Address of principal executive offices)

Leandro Pérez Castaño
( 54-11 )- 4371-5100
inversores@tgs.com.ar

Cecilia Grierson 355
26th Floor
C 1107 CPG City of Buenos Aires
Argentina
(Name, telephone, email and/or facsimile number and Address of Company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
American Depositary Shares (“ADS”), representing Class “B” Shares
TGS
New York Stock Exchange
Class “B” Shares, par value Ps.1.00 per share
n/a
New York Stock Exchange *

*Not for trading, but only in connection with the registration of American Depositary Shares related to the issuer’s American Depositary Receipts (“ ADRs ”) program, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act:
None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Class “A” Shares, par value Ps.1.00 each
405,192,594
Class “B” Shares, par value Ps.1.00 each
347,568,464
Total (1)
752,761,058

(1) Excludes 41,734,225 treasury shares, representing 5.25% of the total shares not deemed outstanding under Argentine law.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes
☐
No
☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes
☐
No
☒

Indicate by check mark whether the registrant has filed (1) all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes
☒
No
☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes
☒
No
☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b–2 of the Securities Exchange Act of 1934.

Large accelerated filer
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Accelerated filer
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Non-accelerated filer ☐




Emerging growth
company
☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Securities Exchange Act of 1934. ☐

†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b)  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP
☐
International Financial Reporting Standards as issued by the International Accounting Standards Board
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Other
☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17
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Item 18
☐

If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

Yes
☐
No
☒

TABLE OF CONTENTS

I
V
1
Item 1.
1
Item 2.
1
Item 3.
1
Item 4.
51
Item 4A.
107
Item 5.
107
Item 6.
143
Item 7.
157
Item 8.
162
Item 9.
166
Item 10.
169
Item 11.
199
Item 12.
199
201
Item 13.
201
Item 14.
201
Item 15.
201
Item 16.
202
Item 16A.
202
Item 16B.
202
Item 16C.
202
Item 16D.
203
Item 16E.
203
Item 16F.
203
Item 16G.
203
Item 16H.
205
Item 16I.
205
Item 16J.
205
Item 16K.
205
206
Item 17.
206
Item 18.
206
Item 19.
206

PRESENTATION OF FINANCIAL AND OTHER INFORMATION



Certain Defined Terms

In this annual report on Form 20-F ( “Annual Report” ), unless otherwise indicated or the context requires otherwise: (i) references to “ we ,” “ us ,” “ our ” and the “ Company ” mean Transportadora de Gas del Sur S.A. ( “tgs” ) and its consolidated subsidiaries, Telcosur S.A. ( “Telcosur” ), (ii) references to “ Argentina ” are to the Republic of Argentina, (iii) references to the “ United States ” or “ U.S. ” are to the United States of America, (iv) references to “ pesos ” or “ Ps. ” are to Argentine pesos, the legal currency of Argentina, (v) references to “ U.S. dollars ,” “ dollars ” or “ U.S.$ ” are to United States dollars, the legal currency of the United States, (vi) a “ billion ” is a thousand million, (vii) references to “ cf ” are to cubic feet, (viii) references to “ MMcf ” are to millions of cubic feet, (ix) references to “ Bcf ” are to billions of cubic feet, (x) references to “ m3 ” are to cubic meters, (xi) references to “ d ” are to days, and (xii) references to “ HP ” are to horsepower.
Financial Statements and Basis of Preparation
We maintain our financial books and records and publish our consolidated Financial Statements (as defined below) in pesos, which is our functional currency. This Annual Report includes our audited consolidated statements of financial position as of December 31, 2024 and 2023, and our audited consolidated statements of comprehensive income, changes in equity and cash flows, and the related explanatory notes for the years ended December 31, 2024, 2023 and 2022 (our “ Financial Statements ”). Our Financial Statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“ IFRS Accounting Standards ”), and as in effect on the date of preparation of the Financial Statements. IFRS Accounting Standards have been adopted by the Federación Argentina de Consejos Profesionales de Ciencias Económicas (“ FACPCE ”) as its professional accounting standards and are required to be adopted by certain public companies in Argentina ( entidades incluidas en el régimen de oferta pública de la Ley de Mercado de Capitales ) pursuant to the rules of the Comisión Nacional de Valores (“ CNV ”), compiled under General Resolution No. 622/2013 (as amended by General Resolution No. 668/2016 and as further amended, the “ CNV Rules ”).
At our shareholders’ meeting held on April 26, 2017, as a result of a proposal by our controlling shareholder, Compañía de Inversiones de Energía S.A. (“ CIESA ”), our shareholders voted in favor of having a joint audit on our consolidated financial statements commencing with fiscal year ended December 31, 2017, even though there is currently no legal requirement in Argentina for a joint audit. As a result, our Financial Statements were jointly audited by Price Waterhouse & Co. S.R.L., Buenos Aires, Argentina (“ PwC ”), member firm of PricewaterhouseCoopers International Limited, and Pistrelli, Henry Martin y Asociados S.A. (“ EY ”), member firm of Ernst & Young Global Limited. The joint report of PwC and EY, dated April 24, 2025, is included elsewhere in this Annual Report. Each of PwC and EY is an independent registered public accounting firm, as stated in the joint report appearing herein.
International Accounting Standard 29 (“ IAS 29 ”) “Financial reporting in hyperinflationary economies” requires that the financial statements of an entity whose functional currency is one of a hyperinflationary economy be expressed in terms of the current unit of measurement at the closing date of the reporting period, regardless of whether such financial statements are based on the historical cost method or the current cost method. This requirement also comprises the restatement of comparative information of the financial statements to be presented in the current currency as of December 31, 2024, without modifying the statutory decisions made based on the financial information corresponding to those fiscal years.
i
IAS 29 describes characteristics that may indicate that an economy is hyperinflationary. However, it states that it is a matter of judgement by management when restatement of financial statements becomes necessary. Among other factors, an economy is “hyperinflationary” in accordance with IAS 29 when it has a cumulative inflation rate over three years that approaches, or exceeds, 100%, also taking into consideration other qualitative factors related to the macroeconomic environment.
The IASB does not identify specific economies that satisfy the requirements to be deemed hyperinflationary. The International Practices Task Force (“ IPTF ”) of the Center for Audit Quality monitors the status of “highly inflationary” countries. The criteria of IPTF for identifying such countries are similar to those for identifying “hyperinflationary economies” under IAS 29. From time to time, the IPTF issues reports of its discussions with the staff of the Securities and Exchange Commission (“ SEC ”) on the IPTF’s recommendations of which countries should be considered highly inflationary, and which countries are on the IPTF’s inflation “watch list.” The IPTF’s discussion document for its November 18, 2024 meeting states that in the view of the IPTF, Argentina had a three-year cumulative inflation rate exceeding 100%.
Inflation in Argentina significantly increased during 2024, 2023 and 2022, which resulted in an accumulated inflation rate for each of the three-year periods ended December 31, 2024, 2023 and 2022, in excess of 100%. In addition, the rest of the indicators do not contradict the conclusion that Argentina should be considered a hyperinflationary economy for accounting purposes. As a result, our management considers that there is sufficient evidence to conclude that Argentina is a hyperinflationary economy in terms of IAS 29, effective as from July 1, 2018.
The Financial Statements and the other financial information included in this Annual Report for all the periods reported are presented on the basis of constant pesos as of December 31, 2024 ( “Current Currency” ). Thus, our audited consolidated statements of financial position as of December 31, 2023, and our audited consolidated statements of comprehensive income, changes in equity and cash flows, and the related explanatory notes for each of the years ended December 31, 2023 and 2022, included elsewhere in this Annual Report have been restated in accordance with IAS 29 for comparative purposes from the original figures reported and supersede any previously disclosed consolidated financial statements relating to such periods.
In analyzing the provisions of IAS 29, our management used the inflation rates stated in the official statistics published by the Instituto Nacional de Estadística y Censos ( “INDEC” ), similar to the criteria adopted by the accounting profession and corporate regulatory bodies in Argentina. In order to restate the financial statements referred in the immediately preceding paragraph, the CNV has established that the series of indexes to be used for the application of IAS 29 is determined by the FACPCE. This series of indexes combines the National Consumer Price Index ( “CPI” ) as of January 2021 (base month December 2020) with the Domestic Wholesale Price Index ( “WPI” ), both published by INDEC until that date. According to information from FACPCE, inflation was 117.8%, 211.4%, and 94.8% in the years ended December 31, 2024, 2023 and 2022, respectively.
For more information, see note 4(d) to the Financial Statements and “ Item 5. Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Consolidated Results of Operations. ” Also, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Argentina—High levels of inflation could negatively affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.”
ii
Currency
Solely for the convenience of the reader, certain amounts presented in pesos in this Annual Report as of and for the year ended December 31, 2024, have been converted into U.S. dollars at specified exchange rates. Unless otherwise specified, all exchange rate information contained in this Annual Report has been derived from information published by Banco de la Nación Argentina (“ Banco Nación ”) on December 31, 2024, without any independent verification by us. As a result of fluctuations in the peso/U.S. dollar exchange rate, the exchange rate at such date may not be indicative of current or future exchange rates. Such fluctuations may affect the U.S. dollar equivalent of peso amounts included in this Annual Report. Consequently, these translations should not be construed as a representation that the peso amounts represent, or have been, or could be converted, into, U.S. dollars at that or any other rate.
Fluctuations in the exchange rate between pesos and U.S. dollars would affect the U.S. dollar equivalent of the peso price of our Class “B” shares, par value Ps.1 each (the “ Class B Shares ”), on the Buenos Aires Stock Exchange ( Bolsas y Mercados Argentinos (“ BYMA ”)) and, as a result, the market price of our American Depositary Shares (“ ADSs ”) on the New York Stock Exchange (“ NYSE ”) as well.
Historically, Argentina has been subject to several restrictions imposed on the foreign exchange market. In the recent years, the Central Bank of the Republic of Argentina ( Banco Central de la República Argentina or the “ BCRA ”) issued several communications which introduced several changes to the then existing foreign exchange control regime. For additional information, see “ Item 10. Additional Information—D. Exchange Controls. ”
The following table sets forth, for the periods indicated, high, low, average and period-end exchange rates between the peso and the U.S. dollar, as reported by Banco Nación. The Federal Reserve Bank of New York does not publish a buying rate for the peso. The average rate is calculated by using the average of Banco Nación reported exchange rates on each day during the relevant monthly period and on the last day of each month during the relevant annual period.
Pesos per U.S. dollar
High
Low
Average
Period end
Most recent six months:
December 2024
1,032.00
1,012.50
1,020.71
1,032.00
January 2025
1,053.50
1,032.50
1,043.61
1,053.50
February 2025
1,064.75
1,054.25
1,058.42
1,064.75
March 2025
1,074.00
1,064.25
1,068.97
1,074.00
April 2025 (until 23 rd )
1,200.00
1,074.75
1,017.23
1,160.00
Year ended December 31,
2020
84.15
59.81
70.78
84.15
2021
102.72
84.70
95.16
102.72
2022
177.16
103.00
130.81
177.16
2023
808.45
178.15
295.30
808.45
2024
1,032.00
810.70
898.05
1,032.00
Our results of operations and financial condition are highly sensitive to changes in the peso-U.S. dollar exchange rate because a significant portion of our revenues (56% of our total consolidated revenues from sales for the year ended December 31, 2024), most of our capital expenditures, almost all of our debt obligations and the cost of natural gas used in our Liquids business are denominated in U.S. dollars, but substantially all of our assets are located in Argentina, and our functional currency is the peso.
iii
Currency fluctuations would also affect the U.S. dollar amounts received by holders of our ADSs upon conversion (by us or by Citibank N.A. (the “ Depositary ”), pursuant to the deposit agreement for the issuance of the ADSs entered into between the Depositary and us (the “Deposit Agreement” )) of the cash dividends paid in pesos on the underlying Class “B” Shares.
Rounding
Certain figures included in this Annual Report have been rounded for ease of presentation. Percentage figures included in this Annual Report have not, in all cases, been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Annual Report may vary from those obtained by performing the same calculations using the figures in our Financial Statements. Certain numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them due to rounding.
Available Information
The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Our telephone number is (54-11) 4371-5100, and our principal executive offices are located at Cecilia Grierson 355, 26th Floor, C1107CPG City of Buenos Aires, Argentina. Our internet address is www.tgs.com.ar . This URL is intended to be an inactive textual reference only. It is not intended to be an active hyperlink to our website. The information included in our website or which may be accessed through our website is not part of this Annual Report, is not incorporated by reference herein or otherwise and should not be relied upon in determining whether to make an investment in any securities issued by us.
iv
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Some of the information in this Annual Report, including information incorporated by reference herein, may constitute estimates and forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 (the “Securities Act”) and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). These estimates and forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “can”, “continue”, “estimate”, “expect”, “goal”, “intend”, “may”, “plan”, “potential”, “predict”, “projection”, “should”, “will”, “will likely result”, “would” or other similar words. These estimates and statements appear in a number of places in this Annual Report and include statements regarding our intent, belief or current expectations, and those of our officers, with respect to (among other things) our business, financial condition and results of operations. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are based on information available to us as of the date of this Annual Report.
When considering forward-looking statements, you should keep in mind the factors described in “ Item 3. Key Information—D. Risk Factors ” and other cautionary statements appearing in “ Item 5”. These factors and statements, as well as other statements contained herein, describe circumstances that could cause actual results to differ materially from those expressed in or implied by any forward-looking statements.

Foward-looking statements include, but are not limited to, the following:

•
statements regarding changes in general economic, business, political or other conditions in Argentina and globally, including changes from actions taken by the Argentine government (the “ Government ”) and changes due to natural and human-induced disasters, and the impact of the foregoing;

•
estimates relating to future energy demand (including demand for fossil fuels), tariffs and volumes for our natural gas transportation services and future prices and volumes for our natural gas liquid products such as propane and butane (also referred to as liquid petroleum gas or “LPG” ), ethane and natural gasoline (collectively “Liquids” ) and for products and services provided in the Midstream and other Services ( “Midstream” ) business segment;

•
statements regarding expected future political developments in Argentina and expected future developments regarding the license granted to us by Government to provide natural gas transportation services through the exclusive use of the southern natural gas transportation system in Argentina (“ License ”), the renegotiation process of the License with the Government, including primarily, the adoption of a revised scheme of tariffs, regulatory actions by Ente Nacional Regulador del Gas (“ ENARGAS ”) and other agencies of the Government, the legal framework established by the Argentine Ministry of Economy (the “ Ministry of Economy ”) (formerly known as the Federal Energy Bureau (the “ Federal Energy Bureau ”)), and any other applicable governmental authority that may affect us and our business;
v

•
risks and uncertainties with respect to labor relations and statements with respect to our employees in Argentina;

•
statements and estimates regarding future pipeline expansion and other projects and the cost of, or return to us from, any such expansion or projects;

•
estimates of our future level of capital expenditures and delays in such capital expenditures, including those required by ENARGAS or other governmental authorities for the expansion of our pipeline system or other purposes;

•
estimates of unscheduled and unexpected expenditures for the repair and maintenance of our fixed or capital assets

•
statements regarding the ability of companies engaged in the upstream business in the region where we operate to identify drilling locations and prospects for future drilling opportunities, and drill and develop such locations (such as the Vaca Muerta formation), as well as the Government’s regulations and policies affecting such companies and projects; and

•
the risk factors discussed under “ Item 3. Key Information—D. Risk Factors. ”
When considering forward-looking statements, you should keep in mind the factors described under the section entitled “ Item 3. Key Information—D. Risk Factors ” in this Annual Report. These factors, as well as other statements contained herein, describe circumstances that could cause actual results to differ materially from any results projected, forecasted, estimated or budgeted by us in our forward-looking statements or otherwise expressed in or implied by any forward-looking statement. The risks and uncertainties we face going forward which could affect the accuracy of these forward-looking statements include, but are not limited to:
•
risks and uncertainties resulting from Government regulations that affected or may affect our business or financial condition or results of operations, such as the prohibition on tariff increases related to our natural gas transportation segment and/or restrictions on payments abroad and exchange controls;
•
risks and uncertainties arising from general economic, business, political, or other conditions in Argentina and globally, as well as business disruptions due to natural or man-made disasters, such as weather conditions, earthquakes, terrorist activities, social unrest and violence, armed conflicts, and health epidemics;
•
risks and uncertainties related to changes in the U.S. Dollar-Peso exchange rate and the Argentine domestic inflation rate, which may materially adversely affect our revenues, expenses and reported financial results;
•
risk and uncertainties related to high rates of inflation on our costs;
•
risks and uncertainties associated with our non-regulated business, including those related to international and local prices of Liquids, taxes, cost and restrictions on the supply of natural gas and other restrictions imposed on Liquids exports, our ability to renegotiate our agreements with customers and possible increased Government regulation of the Liquids industry;
•
capital expenditures effectively required by ENARGAS or other governmental authorities for the expansion of our pipeline system or other purposes, including the risk that we may be forced to make investments or take other actions that are not profitable or are not as commercially attractive as other actions;
vi
•
risks and uncertainties associated with unscheduled and unexpected expenditures for the repair and maintenance of our fixed or capital assets;
•
risks and uncertainties resulting from the prospect of additional Government regulation or other Government involvement in our business;
•
developments in legal and administrative proceedings involving us and our affiliates;
•
changes to, or revocation or expiration of our License or the related regulatory framework; and
•
risks and uncertainties impacting us as a whole, including changes in general economic conditions, changes in Argentine laws and regulations to which we are subject, including tax, environmental and employment laws and regulations, and the cost and effects of legal and administrative claims and proceedings against us.
Estimates and forward-looking statements speak only as of the date of this Annual Report and we do not undertake any obligation to update any forward-looking statement or other information contained in this Annual Report to reflect events or circumstances occurring after the date of this Annual Report or to reflect the occurrence of unanticipated events. Additional factors affecting our business emerge from time to time and it is not possible for us to predict all of those factors, nor can we assess the impact of all such factors on our business, operations or financial condition, or the extent to which any factors, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. Estimates and forward-looking statements involve risks and uncertainties and do not guarantee future performance, as actual results or developments may be substantially different from the expectations described in the forward-looking statements. In light of the risks and uncertainties described above, the events referred to in the estimates and forward-looking statements included in this Annual Report may or may not occur, and our business performance, financial condition and results of operations may differ materially from those expressed in our estimates and forward-looking statements, due to factors that include but are not limited to those mentioned above. Investors are warned not to place undue reliance on any estimates or forward-looking statements in making any investment decision.
vii
PART I
Item 1.
Identity of Directors, Senior Management and Advisers
Not applicable.
Item 2.
Offer Statistics and Expected Timetable
Not applicable.
Item 3.
Key Information
A.
[Reserved]
B.
Capitalization and Indebtedness
Not applicable.
C.
Reasons for the Offer and Use of Proceeds
Not applicable.
D.
Risk Factors
You should carefully consider the following risks and uncertainties, and any other information appearing elsewhere in this Annual Report. The risks and uncertainties described below are intended to highlight risks and uncertainties that are specific to us. Additional risks and uncertainties, including those generally affecting Argentina and the industry in which we operate, risks and uncertainties that we currently consider immaterial or risks and uncertainties generally applicable to similar companies in Argentina may also impair our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.
The information in this Risk Factors section includes forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous factors, including those described in “Cautionary Statement Regarding Forward-Looking Statements” above.
The following summarizes some, but not all, of the risks provided below. The following summary of material risk factors could materially and adversely affect our business, financial condition and results of operation, and our ability to meet our financial obligations. Consequently, such risk factors may cause historical results to differ materially from any results projected, forecasted, estimated or budgeted by us in our forward-looking statements. Please carefully consider all of the information discussed in this “Item 3. Key Information—D. Risk Factors” in this Annual Report for a more thorough description of these and other risks:

•
Risks Relating to Our Business

‒
Failure or delay in the implementation of tariff increases could have a material adverse effect on our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.

‒
Our operations are subject to extensive regulation.

‒
Failure to maintain our relationships with labor unions may have an adverse effect on our business, financial condition, results of operations and prospects.

1

‒
Our regulated business is dependent on our ability to maintain our License, which is subject to revocation under some circumstances.

‒
Our creditors may not be able to enforce their claims against us in Argentina.

‒
The Government’s strategies, measures and programs with respect to the natural gas transportation industry could materially adversely affect our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.

‒
A significant portion of our revenues is generated under natural gas transportation contracts that must be renegotiated and/or extended periodically.

‒
Our business may require substantial capital expenditures for ongoing maintenance requirements and the expansion of our installed transportation capacity; we could be unable to make such expenditures due to the lack of financing.

‒
Our Liquids production depends on the natural gas that arrives at the Cerri Complex through three main pipelines from the Neuquina, Austral and San Jorge natural gas basins. The flow and heating value of this natural gas are subject to risks that could materially adversely affect our Liquids and midstream business segment.

‒
Measures taken by the Government may have an adverse effect on the supply of natural gas to the Cerri Complex and the margins we are able to obtain from our Liquids business, which may adversely affect the results in our Liquids Production and Commercialization segment and, as a result, our overall business and results of operations.

‒
Fluctuations in market prices and the enactment of new taxes or regulations limiting the sales price of LPG and natural gasoline may affect our Liquids business.

‒
Our ethane sales depend on the capacity of PBB, as the sole purchaser of our ethane production.

‒
Measures taken by the Government may have an adverse effect on the flow of natural gas through our midstream (gathering and treatment) facilities, which may adversely affect the results in our midstream business.

‒
The affirmative and restrictive covenants in our currently outstanding indebtedness could adversely restrict our financial and operating flexibility and subject us to other risks.

‒
Our insurance policies may not fully cover damage or we may not be able to obtain insurance against certain risks.

‒
Changes in the interpretation by the courts of labor laws that tend to favor employees could adversely affect our business, results operations and financial condition, the value of our securities, and our ability to meet our financial obligations.

2

‒
We may be exposed to risks related to litigation and administrative proceedings that could materially and adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations in the event of an unfavorable ruling.

‒
Our operations are subject to environmental, occupational health and safety regulations.

‒
Our operations could cause environmental risks and any change in environmental laws could increase our operating costs.

‒
We may face competition.

‒
Downgrades in our credit ratings could have negative effects on our funding costs and business operations.

‒
We rely heavily on digital technologies for our daily operations and we may be subject to cyberattacks or other risks related to new technologies that could materially affect our business.

‒
Our natural gas transportation systems, gas gathering and treatment and processing facilities are subject to the risk of mechanical or electrical failures and any resulting unavailability may affect our ability to fulfill our contractual and other commitments and thus adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.

‒
Our business is subject to risks arising from natural disasters, catastrophic accidents and terrorist attacks.

‒
We are subject to anti-trust, anti-corruption, anti-bribery and anti-money laundering laws. Failure to comply with these laws could result in penalties, which could harm our reputation and have an adverse effect on our business.

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Our ability to operate our business may suffer if we are unable to retain our employees or attract other skilled employees or contractors.

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Climate change could impact our operating results, access to capital and strategy.

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Our activities are subject to social and reputational risks, including the potential for protests by members of the local communities.

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The failure of any bank in which we deposit our funds could have an adverse effect on our financial condition.

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Risks Relating to Argentina

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Argentina’s ability to obtain financing from international markets could be limited, which may impair its ability to implement reforms and foster economic growth and, consequently, affect our business, results of our operations and growth prospects.

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Argentina’s fiscal situation could limit the country’s access to the capital market and adversely affect the Argentine economy.

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Certain risks inherent to any investment in a company operating in an emerging market such as Argentina.

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Economic volatility in Argentina has adversely affected and may continue to adversely affect our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.

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The ongoing political instability in Argentina may adversely affect the Argentine economy.

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The impact of the economic measures adopted or to be adopted by the Government may affect the Argentine’s economy.

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High levels of inflation could negatively affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.

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Restrictions on transfers of foreign currency and the repatriation of capital from Argentina may impair our ability to pay dividends or imports and investors may face restrictions on their ability collect capital and interest payments in connection with corporate bonds issued by Argentine companies.

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Fluctuations in the value of the peso may also adversely affect the Argentine economy, our financial condition and results of operations.

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The impossibility of addressing the actual and potential risks of institutional deterioration and corruption, the economy and the financial situation of Argentina has been affected negatively and could continue to be.

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Government intervention in the Argentine economy could adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.

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The Argentine economy may be adversely affected by economic developments in other markets and by more general effects, which could have a material adverse effect on Argentina’s economic growth.

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Argentina’s past default and litigation with holdout bondholders may limit our ability to access international markets.

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A sustained deterioration in the terms of trade given a decline in the global prices for Argentina’s main commodity exports or an increase in the global prices for Argentina’s main commodity imports, as well as adverse weather conditions affecting the production of Argentina’s main commodity exports, could have an adverse effect on Argentina’s economic growth.

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Further downgrades in the credit rating or rating outlook of Argentina could impact the rating of our securities or adversely affect the market price of our securities.

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The Argentine government may mandate salary increases for private sector employees, which would increase our operating costs.

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Argentine corporations may be restricted from making payments in foreign currencies or from importing certain products.

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The conflict between Russia and Ukraine and between Israel and Iran could adversely affect the global economy, the Argentine economy and our operational results and financial condition.

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We continue operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability since the ongoing military conflict between Russia and Ukraine, escalation of conflict between Israel and Iran, poor global economic performance, a potential recession looming in the U.S. and Europe and China showing weak growth.

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Risks Relating to Our Shares and ADSs

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shareholders outside Argentina may face additional investment risk from currency exchange rate fluctuations in connection with their holding of our shares or ADSs represented by ADRs. Exchange controls imposed by the Government may limit our ability to make payments to the Depositary in U.S. dollars, and thereby limit ADR holders´ability to receive cash dividends in U.S. dollars.

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Our principal shareholders exercise significant control over matters affecting us, and may have interests that differ from those of our other shareholders.

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Sales of a substantial number of shares could decrease the market prices of our shares and the ADRs.

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Under Argentine law, shareholder rights may be fewer or less well defined than in other jurisdictions.

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As a foreign private issuer we are exempt from certain rules that apply to domestic U.S. issuers.

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Changes in Argentine tax laws may adversely affect the tax treatment of our Class B Shares or ADSs.

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Holders of ADRs may be unable to exercise voting rights with respect to our Class B Shares underlying the ADRs at our shareholders’ meetings.

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Holders of ADRs may be unable to exercise preemptive, accretion or other rights with respect to the Class B shares underlying the ADSs.

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The NYSE and/or BYMA may suspend trading and/or delist our ADSs and common shares, respectively, upon occurrence of certain events relating to our financial situation.

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The price of our Class B Shares and the ADSs may fluctuate substantially, and your investment may decline in value; and

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The relative volatility and illiquidity of the Argentine securities markets may substantially limit the ability to sell the Class B Shares underlying the ADSs on the BYMA at the price and time desired by the shareholder.
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Risks Relating to Our Business
Failure or delay in the implementation of tariff increases could have a material adverse effect on our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.
All our net revenues from the Natural Gas Transportation public service (which represented 36% of total revenues during 2024) are attributable to contracts, which are subject to Government regulation. Prior to the enactment of the Public Emergency Law and Foreign Exchange System Reform Law No. 25,561 (the “Public Emergency Law” ), our tariffs were stated in U.S. dollars, adjusted on a semiannual basis by reference to the U.S. Producer Price Index (“ PPI ”), and further adjusted every five years, based on the efficiency of, and investments in, our gas transportation business. The Public Emergency Law, however, eliminated tariff indexation, and public service tariffs were converted into pesos and fixed at an exchange rate of Ps.1.00 per U.S.$1.00, even though the peso was devaluating significantly against the U.S. dollar.
Sustained inflation in Argentina since 2002, without any corresponding increase in our natural gas transportation tariffs until recently, has adversely affected, and continued inflation would continue to adversely affect, our Natural Gas Transportation revenues and financial condition. During the last few years, we have monitored our operating costs in order to minimize the impact of the insufficient adjustment of our tariffs on our activities. These measures have had no negative impact on the reliability and efficiency tasks carried out on the pipeline system.
From the effective date of the Public Emergency Law until April 2014, our tariff remained unchanged. Only in April 2014 we received a transitory tariff increase of 20%, much lower than the evolution of other macroeconomic variables that affect our operating costs.
Subsequently, and until the execution of the integral tariff renegotiation ( “RTI” ) Agreement approved in March 2017 through Resolution No. 4362/2017 ( “Resolution 4362” ), we received only partial increases in May 2015 and as of April 2016.
Resolution 4362, which approved a staged tariff increase which contemplates an aggregate transportation tariff increase of 214.2% and an aggregate access and use charge (“ CAU ”) increase of 37%. Pursuant to this resolution, we should have also execute a capital expenditures program for a five-year period (from April 1, 2017, to March 31, 2022), which contemplated investments of Ps.6,786 million (in nominal value on December 31, 2016) to improve the operation and maintenance of the pipeline system (the “ Five-Year Plan 2016 ”).
Subsequently, under the Decree 1020 tariffs were frozen until the new RTI concludes. In this context, only two transitory-tariff increases were approved, which have compensated only partially the development of the operation costs. “ Item 4. Our Information—B. Business Overview—Natural Gas Transportation—Regulatory Framework—Tariff situation.”
Following the public hearing held on January 8, 2024, on March 26, 2024, we entered into the 2024 Transitional Agreement with ENARGAS, which establishes a temporary adjustment of 675% in natural gas transportation tariffs. This tariff increase came into effect on April 3, 2024, following the publication in the Official Gazette of Resolution No. 112/2024 (the “Resolution 112”) issued by ENARGAS. According to Resolution 112, from May 2024 until the five-year tariff renegotiation (“RQT”) process is completed, tariffs will be adjusted monthly.
Nevertheless, by instruction of the Ministry of Economy, the monthly tariff increase began in August and was determined by said body.
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In this regard, and within the framework of the RQT process, on January 14, 2025, ENARGAS, through Resolution No. 16/2025, published the call for the public hearing held on February 6, 2025, with the aim of considering, among other issues, the RQT for gas transportation and distribution, and the methodology for the periodic adjustment of gas transportation and distribution tariffs. For additional information see “Item 4. Our Information—B. Business Overview—Natural Gas Transportation—Regulatory Framework—Tariff situation.”
In the past, we have suffered from our inability to receive tariff increases, which meant the deterioration of our financial and economic condition. Also, we have received insufficient tariff increases to compensate for the increases in our operating costs due to inflation. For additional information about the prior RTI processes and failure by ENARGAS to increase tariffs, and the status of the ongoing RQT see “Item 4. Our Information—B. Business Overview—Natural Gas Transportation—Regulatory Framework—Tariff situation.”
Moreover, as of the date of this Annual Report, we are unable to predict which permanent measures will be taken by the Government in connection with the tariff system, or if such system will be amended, adversely affecting our financial situation and our results of operations.
In addition, we cannot predict whether additional operating restrictions or mandatory investments could be imposed on us in the future nor the outcome from the renegotiation process of the current RQT stated by Resolution 112. If such outcome is adverse to us, our results of operations and financial condition could be negatively affected.
Our operations are subject to extensive regulation.
The Argentine oil and gas industry is subject to extensive government regulation and control. As a result, our business is to a large extent dependent upon regulatory and political conditions prevailing in Argentina and our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations may be adversely affected by regulatory and political changes in Argentina. Therefore, we face risks and challenges relating to government regulation and control of the energy sector, including those set forth below and elsewhere in these risk factors:

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limitations on our ability to increase prices or to reflect the effects of higher domestic taxes, increases in operating costs or increases in international prices of natural gas and other hydrocarbon fuels and exchange rate fluctuations on our domestic prices;

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risks in connection with the former and current incentive programs established by the Government for the oil and gas industry, such as the natural gas additional injection stimulus program and cash collection of balances with the Government;

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legislation and regulatory initiatives relating to hydraulic stimulation and other drilling activities for non-conventional oil and gas hydrocarbons, which could increase our cost of doing business or cause delays and adversely affect our operations; and

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the implementation or imposition of stricter quality requirements for hydrocarbon products in Argentina.
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In recent years, the Government has made certain changes in regulations and policies governing the energy sector to give absolute priority to domestic supply at stable prices in order to sustain economic recovery. As a result of the above-mentioned changes, for example, on days during which a gas shortage occurs, exports of natural gas (which are also affected by other government curtailment orders) and the provision of gas supplies to industries, electricity generation plants and service stations selling compressed natural gas are interrupted to prioritize residential consumers at lower prices. The Expropriation Law of Argentina has declared the achievement of self-sufficiency in the supply of hydrocarbons, as well as in the exploitation, industrialization, transportation and sale of hydrocarbons, is in the national public interest and a priority for Argentina. In addition, its stated goal is to guarantee socially equitable economic development, the creation of jobs, the increase of the competitiveness of various economic sectors and the equitable and sustainable growth of the Argentine provinces and regions. We cannot assure you that these and other changes in applicable laws and regulations, or adverse judicial or administrative interpretations of such laws and regulations, will not adversely affect our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.
Failure to maintain our relationships with labor unions may have an adverse effect on our business, financial condition, results of operations and prospects.
A significant portion of our workforce is represented by labor unions, and most of our non-unionized employees have the same employment benefits as unionized employees. While we believe we have enjoyed satisfactory relationships with all the labor organizations that represent our associates, and we believe our relationships with labor organizations will continue to be satisfactory, labor-related disputes may still arise. Labor lawsuits are common in the energy sector in Argentina, and industry-wide organized actions by unionized employees in the industry, such as blockages in the access to facilities and route cuts have occurred in the past. We have suffered interruptions as a result of our employees joining such organized activities. We cannot assure you that future business interruptions resulting from strikes and other organized activities by our employees would not have a significant adverse effect on our business, financial condition, results of operations and prospects.
The collective bargaining agreements with our unions are valid for one year. Currently, we have a collective bargaining agreement in effect for the period from April 2024 to April 2025.
However, we cannot assure you that we will not suffer business interruptions or strikes in the future as a result of collective actions by our employees. We have insurance that covers terrorism and organized actions against our assets, among other items, for a total insured amount of U.S.$50,000,000 with a deductible per event of U.S.$500,000, but we cannot assure you that our insurance coverage will be sufficient to cover damages and losses caused by the organized actions of our employees.
In addition, in the past, the Government has enacted laws and regulations forcing private companies to maintain certain wage levels and to provide additional benefits to their employees. We cannot assure you that in the future the Government will not increase wages or require additional benefits for workers or employees or that unions will not pressure the Government to demand such measures. All wage increases, as well as any additional benefits, could result in increased costs and adversely affect our results of operations.
Our regulated business is dependent on our ability to maintain our License, which is subject to expiration under some circumstances.
We conduct our Natural Gas Transportation business pursuant to the License, which authorizes us to provide natural gas transportation services through the exclusive use of the southern natural gas transportation system in Argentina. Our License may be revoked in certain circumstances based on the recommendation of ENARGAS. Expiration of our license would require an administrative proceeding, which would be subject to judicial review. Main reasons for which our License may be revoked include:
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repeated failure to comply with the obligations of our License and failure to remedy a significant breach of an obligation in accordance with specified procedures;

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total or partial interruption of service for reasons attributable to us that affects transportation capacity during the periods stipulated in our License;

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sale, assignment or transfer of our essential assets or the placing of encumbrances thereon without ENARGAS’s prior authorization, unless such encumbrances serve to finance extensions and improvements to the gas pipeline system;

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our bankruptcy, dissolution or liquidation;

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cessation and abandonment of the provision of the licensed service, an attempt to assign or unilaterally transfer our License in full or in part without the prior authorization of ENARGAS, or relinquishing our License, other than in the cases permitted therein; and

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delegation of the functions granted in such License without the prior authorization of ENARGAS, or the termination of such License without regulatory approval of a license.
On September 8, 2023, we submitted to ENARGAS the request to initiate the procedure contemplated in Law No. 24,076 by which, once the regulated procedures and administrative procedure established for this purpose have been completed, we are granted the extension of the license term for ten years from the expiration date of its initial term (December 28, 2027) for the provision of the gas transportation service, contemplating the entire scope of the license approved by Decree No. 2458/92.
In that presentation, we requested that the planned measures be adopted regarding performance evaluation and public hearing, so that once the regulated procedures and administrative procedure established for this purpose have been completed, we are granted an extension of the license term for ten years from the expiration date.
On June 19, 2024, ENARGAS issued a technical and legal report stating that we have fully complied with our obligations under the License. Based on this report and after a non-binding public hearing (which was held on October 21, 2024), as required by Article 6 of the Natural Gas Law, the controller of ENARGAS may submit a recommendation to the Executive Power, which, in turn, may, within 120 days after the presentation of the ENARGAS recommendation, issue a decree granting the extension of the license for 20 years.
The timing to grant the License extension depends on the Government, and during the application or renewal process for the License we will be evaluated and re-evaluated by the appropriate authorities and must comply with the prevailing standards and regulations, which may change from time to time. In the event that we are not able to obtain or renew the certificates, permits and licenses, all or part of our operations may be suspended by the Government, which would have a material adverse effect on our business and financial condition.
If our License were revoked, we would be required to cease providing natural gas transportation services. The impact of the loss of our License on our business, financial condition and results of operations would be material and adverse. Additionally, certain changes to the License could result in a default under our outstanding debt instruments.
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Our creditors may not be able to enforce their claims against us in Argentina.
We are a stock corporation with limited liability ( sociedad anónima ), incorporated and organized under the laws of Argentina. Substantially all of our assets are located in Argentina.
Under Argentine law, foreign judgments may be enforced by Argentine courts, provided that the requirements of Articles 517 through 519 of the Federal Code of Civil and Commercial Procedure are met. Foreign judgments cannot violate principles of public policy ( orden público ) of Argentine law, as determined by Argentine courts. It is possible that an Argentine court would deem the enforcement of foreign judgments ordering us to make a payment in a foreign currency outside of Argentina to be contrary to Argentine public policy if at that time there are legal restrictions prohibiting Argentine debtors from transferring foreign currency outside of Argentina. Although currently there are no legal restrictions prohibiting Argentine debtors from transferring foreign currency outside of Argentina to satisfy principal or interest payments on outstanding debt that has been previously reported to the BCRA, we cannot assure you that the Government or an Argentine court will not impose such restrictions in the future.
In addition, under Argentine law, attachment prior to execution and attachment in aid of execution will not be ordered by an Argentine court with respect to property located in Argentina and determined by such courts to be utilized for the provision of essential public services. A significant portion of our assets may be considered by Argentine courts to be dedicated to the provision of an essential public service. If an Argentine court were to make such a determination with respect to any of our assets, unless the Government ordered the release of such assets, such assets would not be subject to attachment, execution, or other legal process if such determination stands, and the ability of any of our creditors to realize a judgment against such assets may be adversely affected.
The Government’s strategies, measures, and programs with respect to the natural gas transportation industry could materially adversely affect our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.
Since 1992 and after the privatization of several state companies, until the economic crisis in 2002, the Government reduced its control over the natural gas transportation industry. After the economic crisis in 2002 the Government increased its role in the energy sector implementing strict regulations and increasing its intervention. Intervention primarily included the expansion of our pipeline through the creation of trust funds and the interruption and redirection of natural gas firm transportation services (including the diversification of natural gas supply from our liquids processing plant located at General Cerri Complex, in the Province of Buenos Aires (“Cerri Complex”)).

In the past, natural gas distribution companies, including us, were prohibited from passing through price increases to consumers. Producers of natural gas, therefore, had difficulty implementing wellhead natural gas price adjustments that would increase the costs of distribution companies, which caused such producers to suffer a sharp decline in their rate of return-on-investment activities. As a result, natural gas production was not sufficient to meet the increasing demand. Likewise, the lack or insufficient tariff adjustments for natural gas transportation companies caused a decrease in the profitability of such companies.
The Argentine government attempted to encourage investment by subsidizing energy consumption, but these measures proved ineffective. They led to stagnation in the energy sector, including in the reduction in the production of natural gas, the commercialization of propane and butane in the local market and the natural gas industry, while consumption continued to rise. The energy crisis resulted in a scarcity scenario. The National Government’s response was to increase energy imports, which had adverse effects on the trade balance and the international reserves of the Central Bank. These measures severely impacted in our operations and the operations of our main clients.

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By Decree of Necessity and Urgency No. 55/2023 ( “Decree 55” ) of December 18, 2023, the President declared the National Emergency of the Energy Sector. The emergency period ran until December 31, 2024 (subsequently extended until July 9, 2025). Decree No. 1023/2024 stipulates that the implementation of the tariff schedules resulting from the tariff review initiated pursuant to Decree No. 55/23 shall not exceed July 9, 2025. The Secretary of Energy is instructed to prepare and implement a program of actions that will allow the sanctioning of prices in competition and free access, maintain income levels, cover investment needs and guarantee the continuous provision of public services, in adequate technical and economic conditions, both for providers and users.
Although the new administration has implemented measures to deregulate the economy and the energy market, we cannot guarantee that these measures will resolve issues in energy sector in in Argentina. Likewise, at this time we cannot predict the impact of the measures or strategies implemented or to be implemented by the Government in the natural gas or hydrocarbons industry, nor their effect, on our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.
Additionally, there is no assurance that the Argentine Government will not introduce further emergency legislation or similar regulations in the future that could increase our obligations, such as higher taxes, unfavorable changes to our tariff structures or remuneration schemes, and other regulatory requirements. Compliance with these could raise our costs, negatively affect our operational results, and decrease the market value of our ADSs and common shares.
A significant portion of our revenues is generated under natural gas transportation contracts that must be renegotiated and/or extended periodically.
In 2024, 72.9% of our average daily natural gas deliveries were made under long-term firm transportation contracts. As of December 31, 2024, our long-term firm natural gas transportation contracts had a remaining weighted average life of approximately 10 years. We cannot assure you that we will be able to extend or replace these contracts when they expire or that the terms of any renegotiated contracts will be as favorable as the existing contracts. In particular, our ability to extend and/or replace contracts could be adversely affected by factors we cannot control, including:

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Argentine natural gas transportation regulations;

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international oil and gas prices;

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timing, volume and location of new market demand;

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competition from alternative energy sources;

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supply and price of natural gas, mainly in the Austral basin and San Jorge Gulf basin that show sustained declines, in Argentina;

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demand for natural gas in the markets we serve; and

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availability and competitiveness of alternative gas transportation infrastructure in the markets we serve.

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Additionally, most of our transportation contracts include a clause allowing for the termination of the relevant contract before the expiration of its term by any of the parties, in case of (i) breach of the other party, or (ii) an extended event of force majeure.
Our business may require substantial capital expenditures for ongoing maintenance requirements and the expansion of our installed transportation capacity; we could be unable to make such expenditures due to the lack of financing.
The natural gas transportation service is an activity involving significant amounts of capital expenditures to improve the operation and maintenance of the pipeline system. Incremental capital expenditures may be required to fund maintenance of our pipeline system. Furthermore, capital expenditures will be required to finance current and future expansions of our transportation capacity. If we are unable to finance any such capital expenditures in terms satisfactory to us or at all, our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations may be adversely affected. In addition, our financing ability may be limited by market restrictions on financing availability for Argentine companies. See “ —Risks Relating to Argentina—Argentina’s past default and litigation with holdout bondholders may limit our ability to access international markets. ”
Within the framework of the RQT, we presented our investment plan for the 2025-2029 five-year period, detailing the projects to be executed and the corresponding budget. We must submit to ENARGAS the progress of our investment plan on an annual basis, and may face administrative sanctions if we fail to comply with such plan.
We cannot guarantee that we will have the necessary resources to comply with the proposed investment plan. Failure to comply could result in the implementation of administrative sanctions, fines, or even the revocation of the License, all of which could have a substantial adverse effect on our business, operations and financial situation.
In the past, expansion projects by the Government have not had adverse effects over our results of operations and financial condition. However, we cannot assure you that future expansion projects will not adversely affect our business.
Our Liquids production depends on the natural gas that arrives at the Cerri Complex through three main pipelines from the Neuquina, Austral and San Jorge natural gas basins. The flow and heating value of this natural gas are subject to risks that could materially adversely affect our Liquids and midstream business segment.
More than 50% of the energy matrix in Argentina relies on natural gas. However, and until the surge of the Vaca Muerta area, its natural gas reserves have been declining. Indeed, the exploitation of the Vaca Muerta unconventional area represents a key factor for Argentina’s hydrocarbon development. In the event that it is not successful, it is possible that natural gas production may decline again in the future, which would adversely affect our Liquids business segment by reducing the amount of natural gas flowing to the Cerri Complex and, therefore, the amount of Liquids we produce. In addition, the reduction in the production of natural gas could affect the flow of natural gas provided for our midstream services.
The possibility that Argentina’s natural gas reserves will increase depends on the results of exploration by natural gas producers and the construction of a pipeline system that allows natural gas to escape from the Neuquén basin. In this regard, in November 2020, the Government established the Plan Gas.Ar and extended it through Decree No. 730/2022 until 2028. This plan establishes the need to guarantee the supply of natural gas demand while establishing incentives to make immediate investments for the maintenance and/or growth of production in the productive basins, where natural gas producers must commit to achieve a production curve that guarantees the maintenance and/or increase of current levels.
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In recent years, there has been a lack of investments in infrastructure for the evacuation of new natural gas production developments. If the demand for natural gas continues to increase as it has recently and the necessary investments are not made, there is a risk that in the future there could be a shortage of natural gas during periods of high demand.
Through Resolution No. 67/22 of February 7, 2022, the SE created the program Transport.Ar Producción Nacional , declaring of national public interest the construction of the Perito Moreno pipeline ( “GPM” , formerly President Néstor Kirchner pipeline) and its complementary works as a strategic project. This gas pipeline connects the town of Tratayén, Province of Neuquén, with the city of Salliqueló, Province of Buenos Aires. The GPM and compressor plants, owned by Energía Argentina S.A. (“ ENARSA ”), became fully into operations in October 2024.
We cannot assure you, however, that this new natural gas resource at the Neuquén Basin, or the Plan Gas.Ar, or any other measures taken by the Government to increase natural gas production and supply, will be successful in increasing Argentine natural gas reserves or production and, if unsuccessful, our midstream or Liquids Production and Commercialization businesses could be adversely affected.
Measures taken by the Government may have an adverse effect on the margins we are able to obtain from our Liquids business, which may adversely affect the results in our Liquids Production and Commercialization segment and, as a result, our overall business and results of operations.
Due to regulatory, economic and government policy factors, domestic gasoline, diesel, natural gas, propane and butane, and other fuel prices and related services have differed substantially from prevailing international and regional market prices for such products and services. Our ability to increase prices in connection with international price or domestic cost increases, including those resulting from the peso devaluation, has been limited from time to time. The prices that we are able to obtain for our products and services affect the viability of investments in expansion capacity and processing facilities and, as a result, the timing and amount of our capital expenditures for such purposes. We may face risks and challenges relating to government regulation and control of the energy sector, including laws, regulations and rules enacted by federal, provincial and local governments.
Although our Liquids production and commercialization activities are not subject to regulation by ENARGAS, with the aim to give priority to domestic supply, the Argentine government has made changes in regulations and policies governing the energy sector in recent years to prioritize domestic demand at stable prices in order to sustain economic recovery. For example, in April 2005, the Government enacted Law No. 26,020, which set the framework by which the SHR may establish regulations to cause LPG suppliers to guarantee sufficient supply of LPG in the domestic market at low prices. Law No. 26,020 creates a price regime pursuant to which the SHR periodically publishes reference prices for LPG sold in the local market. It also sets forth LPG volumes to be sold in the local market.
We participate in two programs created by the Government under this framework, which provide for the payment of compensation based on the difference between the price set by the Government and the export parity price. Over recent years, this compensation has been paid to us with significant delays. For further information, see “ Item 4—Our Information—B. Business Overview—Liquids Production and Commercialization. ”
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During 2024, the administration of Javier Milei introduced changes to the propane and butane supply programs with the aim of liberalizing prices and aligning them with international reference prices. Despite these modifications, we cannot assure you that we will be able to maintain or increase the domestic prices of our products, and limitations on our ability to do so would adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations. Similarly, we cannot assure you that LPG prices in Argentina will track increases or decreases in the international or regional markets.
It is uncertain whether in the future measures taken by the Government or other measures that could adversely affect our business, results of operations and ability to meet our financial obligations will be implemented. It is also uncertain the impact of the regulations to be issued or whether our regulatory obligations may be increased, which could result in higher taxes, amendments to the tariff structure, or any other obligations that could increase our costs and adversely affect our financial situation.
Fluctuations in market prices and the enactment of new taxes or regulations limiting the sales price of LPG and natural gasoline may affect our Liquids business.
We extract LPG and natural gasoline from natural gas delivered to the Cerri Complex and sell LPG and natural gasoline. As a result of the deterioration of our Natural Gas Transportation segment, operations relating to our Liquids production and commercialization have represented a material portion of our total revenues.
Over the last few years, the price of Liquids has experienced high levels of volatility. Factors affecting prices include weak demand levels from emerging markets, significant variations in production and storage levels, and climate and geopolitical issues such as the Russia-Ukraine and Middle East conflicts, the ability of the OPEC and other crude oil producing nations to set and maintain crude oil production levels and prices; macroeconomic conditions, including inflation and increase in interest rates. It is expected that volatility and fluctuations maintained in the future.
We cannot predict how these factors will influence LPG and natural gasoline prices and we have no control over them. Price volatility curtails the ability of industry participants to adopt long-term investment decisions given that returns on investments become unpredictable. A substantial or extended downturn in the international prices of Liquids could have a material adverse effect on our business, operating results, and financial condition, as well as the market value of our shares or ADSs.
In the past, the Argentine government has imposed duties on exports, including exports of natural gasoline and LPG products that we export. Currently, in accordance with the Solidarity Law and Decree 488/2020 export duties on the Liquids products that we exported are about 8%. For further information, see “ Item 4. Our Information—B. Business Overview—Liquids Production and Commercialization. ”
In addition, after the issuance of Resolutions Nos. 1,982/11 and 1,991/11 (the “ Gas Charge Resolutions ”), the natural gas processing charge created by Decree No. 2,067/08 (the “ Natural Gas Processing Charge ”) increased from Ps.0.049 to Ps.0.405 per cubic meter of natural gas effective from December 1, 2011, representing a significant increase in our variable costs of natural gas processing.
In order to avoid an adverse effect on our Liquids business, we initiated legal proceedings against Decree No. 2,067/08 and the Gas Charge Resolutions, including the Government, ENARGAS and the former Ministerio de Producción y de Planificación Federal, Inversión Pública y Servicios (the “ MPFIPyS ”) as defendants. For additional information, see “ Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal and Regulatory Proceedings—Tax Claims. ”

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The effect of the continuing decline or volatility in international prices of LPG or natural gasoline could cause our operating margins to drop significantly and materially adversely affect our business, results of operations, financial condition, the value of our securities, and our ability to meet our financial obligations. In addition, the national, provincial and municipal governments could modify the current taxes and export/import regulations in a manner that could adversely affect our financial condition and results of operations.
Our ethane sales depend on the capacity of PBB, as the sole purchaser of our ethane production.
Between 2005 and 2015, we sold all our ethane to PBB under a long-term agreement that expired on December 31, 2015, which was subsequently renewed on an annual basis until May 1, 2018, and then on a monthly basis until September 6, 2018, the date on which we entered into a new agreement with PBB. The agreement is retroactive as of May 1, 2018 and will expire on December 27, 2027.
Pursuant to this agreement, the ethane price is calculated in U.S. dollars and is subject to adjustments, the natural gas price, the quality of the ethane shipped by us and transportation tariffs and charges, among others. This agreement also includes take or pay (“ TOP ”) and deliver or pay (“ DOP ”) commitments for minimum annual quantities. Under these terms, if one party does not comply with the applicable TOP or DOP condition, that party will be required to compensate the other party.
In the past, PBB suffered several adverse operational conditions that affected its capacity to purchase our ethane production. We cannot assure you that these adverse conditions affecting PBB will not recur in the future or that PBB will be able to satisfy its obligations under the new purchase agreement. Likewise, if we are not able to renegotiate such agreement at maturity on terms similar to those in effect, our financial condition and results of operations could be adversely affected.
Measures taken by the Government may have an adverse effect on the flow of natural gas through our midstream (gathering and treatment) facilities, which may adversely affect the results in our midstream business.
To stimulate the natural gas production in Argentina, former Argentina administration implemented the Plan Gas.Ar under which certain market quotas (a portion of total gas needs for power generation and for distribution companies) were assigned to natural gas producers on different tender processes following a price basis criterion. As there is not a full price through of natural gas prices to final consumers, the Plan Gas.Ar provides state funding to close the gap between the prices quoted by the natural gas producers and the prices resulting from the pass through to final consumers. The agreements resulting from the Plan Gas.Ar are valid until year 2028.
Plan Gas.Ar has been successful in providing the natural gas producers with price signals that allow them to invest in their upstream operations and, consequently, increase the local natural gas production.
Any change to this plan unilaterally imposed by the Argentina government to the natural gas producers or default in payments by the Government, may affect negatively in the flow of natural gas through our Midstream infrastructure, impacting adversely in our results of operations and the development of future investment plans that we may have in our Vaca Muerta facilities.
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The affirmative and restrictive covenants in outstanding indebtedness could adversely restrict our financial and operating flexibility and subject us to other risks.
The terms of our outstanding indebtedness provide for numerous affirmative and restrictive covenants that limit our ability to, among other things:

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incur or permit to exist certain liens;

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incur additional indebtedness;

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pay dividends or make other restricted payments;

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make capital investments and other investments;

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enter into sale and lease-back transactions;

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enter into transactions with affiliates;

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sell, transfer or otherwise dispose of assets; and

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consolidate, amalgamate, merge or sell all or substantially all of our assets.
These restrictions may limit our ability to operate our businesses and may prohibit or limit our ability to enhance our operations or take advantage of potential business opportunities as they arise. The breach of any of these covenants by us or the failure by us to meet any of these conditions could result in a default under any or all of such indebtedness. Our ability to comply with these covenants may be affected by events beyond our control, including prevailing economic, financial and industry conditions and the renegotiation of the public works and licenses process. In addition, if we are unable to generate sufficient cash flow from operations, we may be required to refinance outstanding debt or to obtain additional financing. We cannot assure you that a refinancing would be possible or that any additional financing would be available or obtained on acceptable terms.
Our insurance policies may not fully cover damage or we may not be able to obtain insurance against certain risks.
We maintain insurance policies intended to mitigate our losses due to customary risks. These policies cover our assets against loss for physical damage and loss of revenue, and also third-party liability. However, we cannot assure you that the scope of damages suffered in the event of a natural disaster or catastrophic event would not exceed the policy limits of our insurance coverage. We maintain all-risk physical damage coverage for losses resulting from, but not limited to, earthquakes, fire, explosions, floods, windstorms, strikes, riots, mechanical breakdowns and business interruption. Our level of insurance may not be sufficient to fully cover all losses that may arise in the course of our business or insurance covering our various risks may not continue to be available in the future. In addition, we may not be able to obtain insurance on comparable terms in the future. We may be materially and adversely affected if we incur losses that are not fully covered by our insurance policies or if we are required to disburse significant amounts from our own funds to cover such losses.
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Changes in the interpretation by the courts of labor laws that tend to favor employees could adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.

In addition to our employees, we rely on several third-party service providers to outsource certain services. We follow very strict policies to control the compliance by such third-party service providers with their labor and social security obligations. However, due to changes in the interpretation by the courts of labor laws that tend to favor employees in Argentina, companies’ labor and social security obligations toward their own employees and employees of third-party service providers have significantly increased. As a result of the foregoing, potential severance payment liabilities have significantly increased, and in the event any third-party service provider fails to duly comply with its labor and social security obligations towards its employees, we may be faced with litigation by employees of such third-party service provider to hold us liable for the payment of any labor and social security obligations defaulted on by any such third-party service provider. Therefore, our labor costs may increase as our indemnification responsibilities and costs expand, adversely affecting the results of our operations.
We may be exposed to risks related to litigation and administrative proceedings that could materially and adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations in the event of an unfavorable ruling.
We are part of administrative proceedings and judicial claims, some of which have been pending resolution for several years. Our business may expose us to litigation relating to labor, environmental, health and safety matters, regulatory, tax and administrative proceedings, governmental investigations, tort claims and contract disputes and criminal prosecution, among other matters. In the context of these proceedings, we may be required to pay fines or money damages and we also may be subject to complementary sanctions or injunctions affecting our ability to continue our operations. While we may contest these matters vigorously and make insurance claims when appropriate, litigation and other proceedings are inherently costly and unpredictable, making it difficult to estimate accurately the outcome of actual or potential litigation or proceedings. Although we may establish provisions, as we deem necessary, the amounts that we reserve could vary significantly from any amounts we pay due to the inherent uncertainties in the estimation process.
For additional information on the material proceedings in which we are involved, see “ Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal and Regulatory Proceedings. ”
Our operations are subject to environmental, occupational health and safety regulations.
We operate an extensive network of natural gas pipelines, including numerous compressor plants, the Cerri Complex and the logistic and storage facilities of Puerto Galván. All these facilities are located throughout the territory of Argentina and are subject to federal and provincial laws, as well as to the supervision of governmental agencies and regulatory authorities in charge of enforcing environmental laws and policies. We operate in compliance with applicable laws and in accordance with directives issued by ENARGAS. For this reason, it is possible that we could be subject to controls, which could result in penalties imposed on us.
We utilize a certified safety, occupational health, environment and quality management system in accordance with international standards ISO 14001, ISO 9001 and OHSAS 18001. It includes operational controls that are documented and monitored regularly. However, we cannot assure you that these controls will be effective or that our time of response to incidents will be adequate.
In addition, future regulation may require us to comply with additional safety, occupational health, environmental and quality controls or standards. We cannot assure you that, in the future, additional regulation could be issued requiring us to make new investments in order to comply with such safety, health and environmental laws and regulations.
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Our operations could cause environmental risks and any change in environmental laws could increase our operating costs.
Some of our operations are subject to environmental risks that could arise unexpectedly and cause material adverse effects on our operational results and financial condition. In addition, the occurrence of any of these risks could lead to personal injury, loss of life, environmental damage, repair and expenses, equipment damage and liability in civil, criminal and administrative proceedings. We cannot assure you that we will not incur additional costs related to environmental issues in the future, which could adversely affect our operational results and financial condition. In addition, we cannot ensure that our insurance coverage is sufficient to cover the losses that could potentially arise from these environmental risks.
Moreover, we are subject to a broad range of environmental legislation, both in Argentina and in other countries where companies we have interests in are located.
Local, provincial and national authorities in Argentina and other countries where companies we have interests in are located may implement new environmental laws and regulations and may require us to incur higher costs to comply with new standards. The imposition of more stringent regulatory and permit requirements in relation to our operations in Argentina could significantly increase the costs of our activity. We cannot predict the effects of the implementation of any new environmental laws and regulations on our financial condition and operational results.
We may face competition.
Historically, the construction and operation of natural gas processing plants located in the Province of Neuquén has increased competition in our Liquids sector as our customers could satisfy their product demand with alternative suppliers. In the past, we have been able to mitigate this competition by entering into agreements with natural gas producers that limited their ability to make investments in natural gas processing plants.
Although the construction of gas processing plants upstream of the Cerri Complex requires significant investments, additional gas processing facilities may be constructed could result in lower volumes or inferior natural gas quality of the natural gas arriving at the Cerri Complex in the future. Therefore, there is a risk that additional gas processing at the MEGA plant could result in lower volumes or lesser quality gas arriving at the Cerri Complex in the future, or that other projects that may be developed upstream of the Cerri Complex could adversely affect our revenues from Liquids production and commercialization services.
Regarding our Midstream business segment, we operate in a market with strong participants, many of which may have extensive and diversified know-how or operating experience and financial resources like or significantly greater than ours. While it is still unclear the future measures to be taken by the Government regarding its energetic policy, the development of the natural gas industry in Argentina is essential for the country’s economic growth. All future business that our competitors or we can develop will depend on the production of natural gas. The Government (or any other entity on its behalf) might not issue the necessary regulations to encourage natural gas producers to develop new projects involving natural gas output.
Our competitors may be able to invest more for productive natural gas properties than our financial or personnel resources permit. Our competitors may also be able to offer better compensation packages to attract and retain qualified personnel than we are able to offer.
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As a result of the above, an increased number of competitors could reduce the quality of the natural gas available for its processing, our ability to attract and retain quality personnel or raising additional capital. In addition, an increase in competition could affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations. This would adversely affect our business, results of operations and financial condition.
Additionally, our principal competitor in the gas transportation business is Transportadora de Gas del Norte S.A. (“ TGN ”). We compete 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 and, in case that opportunities for new firm natural gas transportation services that arise from the expansion of the system. We compete directly with TGN for the transportation of natural gas from the Neuquén Basin to the greater Buenos Aires area. In addition, in the future other participants may successfully penetrate our market and connect with our main customers which could affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.
Currently the development of Vaca Muerta depends on the availability of transport infrastructure. Most of natural gas production from the Neuquén Basin is transported through Neuba I and Neuba II and Central Oeste pipelines these pipelines are currently working close to full capacity. If Vaca Muerta production grows at a greater pace than its capacity expands, a potential lack of transportation capacity may limit the development of new businesses and increase competition affecting our financial condition and results of operations.
In October 2024, the construction of the GPM was completed by ENARSA allowing an increase in the natural gas transportation capacity.
In addition, on June 19, 2024, we submitted an investment proposal to the Ministry of Economy under a private initiative framework to increase the available volume of natural gas in the northeast area of Argentina by the winter of 2026 (the “Private Initiative” ). The Private Iniative seeks to replace natural gas and liquid imports each winter by using existing infrastructure, complementing the construction of Stage 2 of the GPM. The goal is to achieve the lowest cost for end users and generate savings for the Government. If approved by the Government, a bidding process will be initiated, where we will have the option to match the best offer made by a third party to the Government.
The construction of a new pipeline or to increase the transportation capacity by a third party could affect our results of operations as the interruptible natural gas transport volumes and the availability of natural gas that arrives at the Cerri Complex for processing could be diminished.
Downgrades in our credit ratings could have negative effects on our funding costs and business operations.
Credit ratings are assigned to the Company and its subsidiaries. The credit ratings are based on information furnished by us or obtained by the credit rating agencies from independent sources and are also influenced by the credit ratings of Argentine Government bonds and general views regarding the Argentine financial system as a whole. The credit ratings are subject to revision, suspension or withdrawal by the credit rating agencies at any time. A downgrade, suspension or withdrawal in our credit ratings could result in, among others, the following: (i) increased funding costs and other difficulties in raising funds; (ii) the need to provide additional collateral in connection with financial market transactions; and (iii) the termination or cancellation of existing agreements. As a result, our business, financial condition and operational results could be materially and adversely affected.
19
We rely heavily on digital technologies for our daily operations and we may be subject to cyberattacks or other risks related to new technologies that could materially affect our business.

Our operations are increasingly dependent on digital technologies, including internet-based platforms for data processing, communication, and information exchange. As a result, our information technology systems—and those of our business associates—are vulnerable to cyberattacks and other cybersecurity incidents that could disrupt our business operations. Such incidents could lead to lead to disruptions in critical systems (such as our electronic flow measurement system and distributed control systems), unauthorized access to or disclosure of sensitive or confidential information, corruption or loss of data, safety incidents, significant asset damage, denial of service and interruptions in our overall operations.

The risk of cyber threats has increased significantly in recent years due to the proliferation of new technologies and the growing sophistication of cyberattacks. Our remote work environments are particularly exposed to risks such as hacking, phishing, and social engineering schemes, making them more susceptible to breaches that could result in operational disruptions and other damages.

Our information technology infrastructure is critical to the efficient operation of our business. A breach in our IT systems or physical infrastructure, unauthorized access, or any compromise of data integrity could result in substantial operational interruptions, safety incidents, asset damage, damage to third party property, legal or regulatory liabilities, loss of customer or supplier confidence, reputational harm, and potential loss of contracts. These factors could materially and adversely impact our financial condition, results of operations, and overall business performance. As disclosed in Item 16K, we have implemented measures to address these risks; however, no system can be entirely immune to cyber threats.

In the first quarter of 2022, we experienced a cybersecurity incident that did not materially affect our administrative systems or operations. As a result, we enhanced our security protocols thereafter to mitigate the risk of similar occurrences in the future. However, there can be no assurance that future cyberattacks will not occur or that such incidents would not materially affect our business.

Our natural gas transportation systems and processing facilities are subject to the risk of mechanical or electrical failures and any resulting unavailability may affect our ability to fulfill our contractual and other commitments and thus adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.
Our natural gas transportation systems and processing facilities are at risk of mechanical or electrical failures and may experience periods of unavailability affecting our ability to comply with our contracts with customers. Any unplanned unavailability of our natural gas transportation systems and processing facilities may adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations, as we may be subject to fines or penalties under our contracts with customers.
20
Our business is subject to risks arising from natural disasters, catastrophic accidents and terrorist attacks.

Our facilities or the third-party infrastructure that we rely on may be damaged by flooding, fires and other catastrophic disasters arising from natural or accidental or intentional human causes. We could experience severe business disruptions, significant decreases in revenues based on lower demand as a result of catastrophic events, or significant additional costs to us not otherwise covered by business interruption insurance clauses. There may be a significant time lag between a major accident, catastrophic event or terrorist attack and our definitive recovery from our insurance policies, which typically carry nonrecoverable deductible amounts, and in any event are subject to caps per event. In addition, any of these events could adversely affect the demand of natural gas by some of our customers and of consumers generally in the affected market. Some of these considerations, among others, could materially and adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.
On March 7, 2025, heavy rains fell on the city of Bahía Blanca and adjacent areas, causing floods in all the urban areas and surrounding areas (the “ Event ”). The Event caused the overflowing of the Saladillo García stream, which flooded the Cerri Complex and consequently paralyzed liquids production and partially affected natural gas transportation service.
While we are still analyzing the scope of damages and the downtime of remediation and reparation, we are furnishing the necessary means to mitigate the consequences of the Event, including arrangements for the corresponding insurance policies. As of the date of this Annual Report, the situation is ongoing and we will continue to report as we have further details on the matter.
We are subject to anti-trust, sanctions, anti-bribery and anti-money laundering laws. Failure to comply with these laws could result in penalties, which could harm our reputation and have an adverse effect on our business.
We are subject to anti-trust, sanctions, anti-bribery and anti-money laundering laws. Although we maintain policies and processes intended to comply with these laws, including a review of our internal control over financial reporting, we cannot ensure that these compliance policies and processes will prevent intentional, reckless or negligent acts committed by our officers or employees. If our officers or employees fail to comply with any applicable anti-trust, anti-corruption, anti-bribery or anti-money laundering laws, they may be subject to criminal, administrative or civil penalties and other remedial measures, which could have material adverse effects on our business, financial condition, results of operations and prospects.
On March 1st, 2018, Law No. 27401 entered into force (the “Law 27401”). This Law modifies the Argentine Criminal Code (“ACC”) and imposes criminal liability to private legal persons, whose corporate capital is either national or foreign, with or without state ownership. The Law 27401 imposes criminal liability to legal persons for the following crimes: (i) Local or international bribery and influence peddling (section 258 and 258bis of the ACC); (ii) Negotiations incompatible with public office (section 265 of the ACC); (iii) Extortion by public officers (section 268 of the ACC); (iv) Unjust enrichment by public officers and employees (section 268 (1) and (2) of the ACC); (v) Falsification of balance sheets and reports (section 300 bis of the ACC).
Legal persons are liable for the abovementioned crimes when, either direct or indirectly, the entity intervened in the commission of the crime or when someone acted in his name, interest or benefit for said purpose; even when this individual had no powers to do so, provided that the legal person ratified the act. The legal person will not be criminally liable when the entity reported a crime set forth by the Law 27401 as a consequence of the entity´s internal detection and investigation; the corporate implementation of a proper system of control and supervision in accordance with the Law 27401 and prior to the facts under investigation; and after returning the benefit obtained.
In relation to this, the Law 27401 highlights the importance of “Integrity Programs” or “Internal Rules of Compliance” adopted by the legal person before the commission of the crime, and hence it is important to implement this type of rules into the legal person.
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In the framework of Law 27401 on Criminal Responsibility of Legal Entities, we have implemented an Integrity Program. It should be noted that prior to the enactment of Law 27401, we already had a Code of Conduct and a Whistleblowing Hotline. It is also important to note that, as we are a publicly traded company, we are subject to the provisions issued by the CNV, as well as the provisions of the General Companies Law and other regulations issued by the competent authorities in the matter. (see “Item 16B.Code of Ethics”).
In addition, we are subject to economic sanctions regulations that restrict our dealings with certain sanctioned countries, individuals and entities. In the ordinary course of business, we deal with different suppliers, contractors, vendors and counterparties that may become subject to sanctions. It is possible that existing sanctions regimes may be widened or that new sanctions may be imposed on our counterparties, by the United States, the European Union, the United Kingdom or other jurisdictions. Although we take steps to comply with applicable laws and regulations, should these suppliers, contractors or vendors become sanctioned or the sanctions regime with respect to these entities be widened and we no longer can rely on such suppliers, contractors or vendors, or should we fail to successfully comply with applicable sanctions, we may face negative legal and business consequences.
There can be no assurance that our internal policies and procedures will be sufficient to prevent or detect all inappropriate practices, fraud or violations of law by our affiliates, employees, directors, officers, partners, agents and service providers or that any such persons will not take actions in violation of our policies and procedures. Any violations by us of anti-bribery and anti-corruption laws or sanctions regulations could have a material adverse effect on our reputation, business, financial condition, results of operations and prospects.
Our ability to operate our business may suffer if we are unable to retain our employees or attract other skilled employees or contractors.
Our current and future performance and the operation of our business are dependent upon the contributions of our senior management and our skilled team of engineers and other employees. We depend on our ability to attract, train, motivate and retain key management and specialized personnel with the necessary skills and experience.
There is no guarantee that we will be successful in retaining and attracting key personnel and the replacement of any key personnel could be difficult and time-consuming. The loss of the experience and services of key personnel or the inability to recruit suitable replacements and additional staff could have a material adverse effect on our business, financial condition and results of operations.
Climate change could impact our operating results, access to capital and strategy.
There is an increased attention on greenhouse gas ( “GHG” ) emissions and climate change from different sectors of society. Argentina agreed the consensus reached in 2015 United Nations Climate Change Conference adopted by consensus the Paris Agreement. The Paris agreement sets a goal to GHG emission reduction and defined targets to limit global temperature increases. International treaties together with increased public awareness related to climate change may result in increased regulation to reduce or mitigate GHG emissions. In addition, if we are unable to follow the pace in which society is moving toward energy transition would adversely impact demand for our services, affecting our results of operations and financial condition.
In addition, environmental laws that may be implemented in the future could increase litigation risks and have a material adverse effect on us. For example, in 2019, the Argentine Congress enacted Law No. 27,520 on Minimal Standards on Global Climate Change Adaptation and Mitigation, which focused on implementing policies, strategies, actions, programs and projects that can prevent, mitigate or minimize the damages or impacts associated with climate change.
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Compliance with national and local legal and regulatory changes relating to climate change may in the future increase our costs to operate and maintain our facilities, capital expenditures to install new emission and manage any GHG emissions program may increase our operational expenses. In addition, the effects upon natural gas industry relating to climate change and the resulting regulations and regimes promoting alternative energy resources may also lead to declining demand for natural gas, or Liquids in the long-term.
The physical effects of climate change such as, but not limited to, increases in temperature and sea levels and fluctuations in water levels could also adversely affect our operations and supply chains.
Stakeholder groups are also putting pressure on commercial and investment banks to stop financing fossil fuel companies. According to press reports, some financial institutions have started to limit their exposure to fossil fuel projects. Accordingly, our ability to use financing for these types of future projects may be adversely affected. These factors could have a negative impact on the demand for our products and services and may jeopardize or even impair the implementation and operation of our business, adversely impacting our operating and financial results and limiting our growth opportunities.
Our activities are subject to social and reputational risks, including the potential for protests by members of the local communities.

Although we are committed to maintain good relationships with local communities and to operate our business in a socially responsible manner, we may face opposition from local communities. For example, several of our operations are carried out in the province of Neuquén, Argentina. Local communities, including indigenous communities, often demonstrate in various forms of protest. Such as blocking roads or blocking access, which could indirectly lead to negative impact on commercial activities. Although we consider our relationship with local communities, including indigenous communities to be good, we cannot assure you that any blockade or demands will not impact our operations. These actions could have an adverse effect on our reputation, financial condition and results of operations.  Additionally, if any operational incident occurs that affects those communities we will need to incur in additional costs and expenses in order to restore affected areas and compensate for any damages we may cause. These additional costs may have a negative impact on the profitability of the projects we may decide to undertake.
The failure of any financial institution in which we deposit our funds could have an adverse effect on our financial condition.
We maintain cash deposits in Argentina and other countries, which may face instability that could affect our operations. Particularly, in Argentina, although deposits continue to grow in nominal terms, they are mostly short-term, and medium- and long-term funding sources remain limited.
Financial institutions are highly regulated and subject to frequent regulatory changes, which could create uncertainty and impose significant limitations on their activities. If any of the financial institutions in which we have deposited funds ultimately fails, we may lose our uninsured deposits at such financial institutions, and/or we may be required to move our accounts to another financial institution, which could cause operational difficulties, such as delays in making payments to our partners and employees, which could have an adverse effect on our business, financial condition, results of operations and cash flows.
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Disruptions to the capital markets or the banking system may materially adversely affect the value of investments or bank deposits we currently consider safe, liquid or that provide a reasonable return, and we may be unable to find suitable alternative investments. Additionally, exchange controls and restrictions on international transfers and capital inflows limit access to international credit.
Risks Relating to Argentina
We are a stock corporation with limited liability ( sociedad anónima ) incorporated and organized under the laws of Argentina. Our financial condition and results of operations depend to a significant extent on economic, regulatory and political conditions prevailing in Argentina, the exchange rate between the peso and the U.S. dollar and the reference international prices of Liquids because a significant portion of our revenues (56% of our total consolidated revenues from sales for the year ended December 31, 2024), most of our capital expenditures, all of our debt obligations and the cost of natural gas used in our Liquids business are denominated in U.S. dollars, but substantially all of our assets are located in Argentina, and our functional currency is the peso.
Argentina’s ability to obtain financing from international markets could be limited, which may impair its ability to implement reforms and foster economic growth and, consequently, affect our business, results of our operations and growth prospects.
Argentina’s history of defaults on its external debt and the protracted litigation with holdout creditors may reoccur in the future and prevent Argentine companies such as us from accessing the international capital markets readily or may result in higher costs and more onerous terms for such financing, and may therefore negatively affect our business, operational results, financial condition, the value of our securities, and our ability to meet our financial obligations. In addition, the Government has also carried out a debt restructuring which resulted in an exchange premium of 130% and a loss of international reserves of U.S.$1.3 billion to smooth the depreciation of the official exchange rate. Initially, currency controls were partially relaxed and the market responded positively, the premium of the exchange rate was reduced to 85% and the loss of international reserves was drastically reduced.
Following the default on its external debt in 2001, Argentina sought to restructure its outstanding debt in exchange offers in 2005 and again in 2010. Holders of approximately 93% of Argentina’s defaulted debt participated in the exchanges, but a number of bondholders held out from the exchange offers and pursued legal actions against Argentina. The Argentine Government settled several agreements with the defaulted bondholders, ending more than 15 years of litigation.
On June 20, 2018, the IMF’s Executive Board approved the largest stand-by arrangement in the Fund’s history, in support of Argentina’s 2018-21 economic program. After an augmentation in October 2018, access under the arrangement amounted to U.S.$57 billion (1,227% of Argentina’s IMF quota). The program considered only four of the planned twelve reviews and did not fulfill the objectives of restoring confidence in fiscal and external viability while fostering economic growth. The arrangement has been renegotiated several times.
In March 2022, the IMF’s executive board approved a 30-month extension of the funds service to extend the maturities of approximately U.S.$44.1 billion disbursed in 2018 and 2019. The loan aims to provide Argentina with balance of payments and budget support backed by measures designed to strengthen debt sustainability, tackle inflation, boost reserves, address the country’s social and infrastructure gaps and promote inclusive growth, the fund added. This transaction provides funds that will strengthen reserves and allow Argentina to disburse payments owed from the 2018 IMF program that failed to stabilize the economy. As part of transaction, the Government has committed to reducing its primary fiscal deficit, weaning off money printing from the central bank and rebuilding reserves, among several objectives.
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On January 28, 2022, Argentina signed an agreement with the IMF to refinance more than U.S.$40 billion in debt, contracted in 2018 with this institution. The main measures agreed are related to the reduction of public spending and subsidy rates, focused on the energy sector. The agreement was approved by the Argentinean Congress and by the Board of the IMF. Among other points, an economic and monetary policy was established, where the IMF will be the co-director, carrying out quarterly audits on Argentina’s finances and economic development.
During 2022 and the first months of 2023, the second, third and fourth revisions of the agreement were carried out. Finally, on July 28, 2023, in a difficult macroeconomic context and days before the PASO elections, the parties reached an agreement on the fifth and sixth revisions. On August 23, 2023, the IMF Board of Directors approved the fifth and sixth reviews of the agreement, allowing Argentina access to disbursements of U.S.$7,500 million.
On January 10, 2023, the IMF reached a staff-level agreement with Argentina as part of the seventh review of the country’s $44 billion 30-month extended fund facility. The agreement focuses on improving Argentina’s domestic debt maturity profile and rebuilding relationships with international capital markets. Other key understandings include supporting monetary demand and disinflation, establishing a 2% GDP surplus goal by 2024, strengthening social programs, modifying foreign exchange policy, and supporting policy changes for Argentina’s energy and mining sectors.
On October 31, 2023, the Argentine government paid approximately U.S.$2,600 million to the IMF in terms of the October 2023 maturities, which it agreed to accumulate in a single disbursement. In December 2023, under the administration of Javier Milei, a loan between Argentina and the Development Bank of Latin America and the Caribbean for U.S.$960 million was approved, which aims to provide bridge financing so that Argentina can continue with the implementation of the extended facilities agreement agreed with the IMF.
In February 2024, the IMF’s executive board approved the seventh review under the current agreement. In this way, a divestment of approximately U.S.$4,700 million was approved to restore macroeconomic and program stability. In turn, an economic stabilization plan was established focused on establishing a solid fiscal anchor and a set of economic policies in order to reduce inflation, strengthen reserves, correct distortions and resolve impediments that obstruct Argentina’s sustained growth.
On May 14, 2024, the eighth review of the program took place, which focused on fiscal compliance during the first quarter of 2024. According to the Ministry of Economy’s figures, the primary fiscal surplus was four times higher than the figure required by the current program. Subsequently, on June 13, 2024, the IMF’s executive board approved the eighth revision under the current agreement, which approves a disbursement of about U.S.$800 million to support the disinflation process, rebuild fiscal and external reserves and underpin economic recovery.
On January 10, 2025, the IMF approved the evaluation it conducts for all programs that include financing above the established quota. In the case of Argentina, it has successfully passed this evaluation. Additionally, the IMF highlighted the results achieved in the first year of Javier Milei’s administration and noted that the economic program implemented by the government managed to realign the agreement with the organization. However, it also emphasized the importance of eliminating existing exchange controls, accumulating reserves, ensuring the sustainability of fiscal adjustments, and strengthening public policies.
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On March 10, 2025, the Executive Branch sent to Congress Emergency Decree No. 179/2025 (“DNU 179/2025”), which approves a new extended facilities program with the IMF. This program will have a duration of 10 years, with a grace period of 4 years, and the debt will be used to rescue the Treasury’s debt with the Central Bank and to meet the maturities with the IMF itself over the next 4 years. DNU 179/2025 does not specify the amount of additional debt or the program. On March 19, 2025, the lower house of the Argentine Congress ratified Decree No. 179/2025, thereby giving final approval to the Extended Facilities Program.
On April 11, 2025, the IMF Executive Board approved a 48-month Extended Fund Facility (EFF) arrangement for Argentina totaling US$20 billion, with an immediate disbursement of US$12 billion, and a first review planned for June 2025 with an associated disbursement of about US$2 billion. Additionally, the government agreed on additional disbursements of US$ 6.1 billion with multilateral organizations and US$ 2.0 billion with international banks with the aim to strength the Central Bank reserves.
Argentina’s future fiscal situation may not be sufficient to meet its debt service obligations, and the country may be forced to rely partly on additional financing from local and international capital markets, the IMF, or other credit organizations. Furthermore, the agreement with the IMF could be affected. All of this would lead to a worsening of Argentina’s macroeconomic situation and negatively impact or restrict companies’ access to credit.
After the primary elections results of August 2019, the international markets casted doubt on Argentina’s debt sustainability. In view of this, the country risk indicator raised to 2,200 basis points, topping-off a depreciation of bond prices. Also, on August 29, 2019 by Decree No. 596/2019 the Government announced a debt profiling consisting of (i) an extension on the payment term for short-term local bonds, only for institutional investors that will receive the full payment over terms of three and six months (15% on the original maturity date, 25% and 60% at 3rd and 6th month of the original maturity date, respectively), but not for natural persons who acquired the bonds before July 31, 2019, who will receive full payment on the maturity date; (ii) a proposal to the Argentine Congress of a bill to extend maturity dates of other local bonds, without reduction on the capital or interest; (iii) a proposal to extend the maturity dates of foreign bonds; and (iv) after achieving fiscal goals, the start of talks with IMF in order to reprofile the deadlines to reduce the default risk.
Additionally, Argentina is involved in various legal matters in foreign courts with external funds, including Petersen and Eton Park, among others, who have filed claims against Argentina for the nationalization of YPF. An unfavorable outcome of this and other claims initiated or to be initiated could necessitate an increase in Argentina’s debt, negatively affecting its fiscal situation. Although the Argentine government has been able to restructure its debt in the past, it is not possible to predict that it will be able to do so again in the future. In this regard, it is not possible to predict that Argentina’s fiscal situation will be sufficient to meet its debt service obligations or that the country’s macroeconomic situation will make it viable to access international credit markets.
However, difficulties by Argentina and Argentine issuers in accessing international capital markets continue. Without access to the international financial markets the Government may not have the financial resources to implement reforms and boost growth, which could have a significant adverse effect on the country’s economy and, consequently, on our activities. Failure of Argentina to restructure its debt could cause Argentina to default in the payment of its public debt, which could materially and adversely affect our activities, financial situation and operating results, as well as our ability to meet our financial obligations, it could directly impact our customers’ ability to pay for our products and services, the demand for energy and our ability to access local and international markets to finance our operations and our growth. In addition, we cannot predict the outcome of any future restructuring of Argentine sovereign debt.
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As of the date of this Annual Report, it is not possible to predict the impact that the measures relating to Argentina’s debt restructuring nor any future economic plan that the Government may implement will have on the Argentine economy. Furthermore, the long-term impact of these measures and any measures future of the current administration in the Argentine economy remains uncertain.
Argentina’s fiscal situation could limit the country’s access to the capital market and adversely affect the Argentine economy.
In recent years, the government has substantially increased public spending. In this sense, the Argentine Government adopted several measures to finance this public expenditure and finance the fiscal deficit that they generated, including, among others, the use of the resources of the BCRA and ANSES, and has used the issuance of money as a tool to raise funds. Argentina has a high level of indebtedness, which has been growing in recent years as a result of the increase in the fiscal deficit and the lack of capacity of Argentina to obtain international financing.
In Argentina, total expenditure has exceeded tax revenues in 28 of the last 35 years. In 2022, the primary fiscal deficit amounts to 2.4% of GDP. In 2023, the primary fiscal deficit was be 2.9% of GDP.
A further deterioration in the fiscal accounts could adversely affect the government’s ability to access long-term financial markets. This could be due, for example, to social security payments, economic aid to financially distressed provinces and increased spending on public works and subsidies, including subsidies to the energy and transport sectors.
From the first month of his administration, Javier Milei’s government managed to reverse the fiscal deficit, achieving for the first time in 14 years a primary and financial surplus. In this regard, for the year 2024, the financial surplus amounted to $1.8 trillion, equivalent to 0.3% of GDP. Meanwhile, the primary surplus reached 1.8% of GDP. This was achieved thanks to a 27% reduction in primary spending. Also, Javier Milei has declared as one of the main campaign proposals his intention to reduce public spending and, as mentioned above, achieved a balanced budget for 2024. This, through certain measures, which include the reduction of expenditure on public works (through the proposal of a “private initiative system”), the elimination of discretionary transfers to the provinces (funds transferred by the national government outside the distribution of income), the reduction of economic subsidies (for electricity, gas or transport) and advance in the privatization of public companies. In addition, through Decree No. 8/2023, the reduction of ministries and structures of the Argentine government was established in order to reduce public spending.
The impact of these and other measures on the future economic and political scenario is uncertain. We cannot predict what effect they will have on our business, financial situation or results of operations.
The application of new measures in the future could also have negative effects. In addition, the federal government’s primary fiscal balance could be adversely affected if public spending increases faster than income in the future. On the other hand, weaker fiscal results than expected in Argentina could have a material adverse effect on the economy of this country.
The Government’s ability to access the long-term financial markets to finance such deficit is limited given the high levels of public sector indebtedness. The inability to access the capital markets to fund its deficit or the use of other sources of financing may have a negative impact on the economy and could limit the access to such capital markets for Argentine companies, which could adversely affect our business, financial condition and results of operations.
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Certain risks are inherent in any investment in a company operating in an emerging market such as Argentina.
Argentina is an emerging market economy and investing in emerging markets generally carries risks. According to a statement from MSCI Inc., Argentina was considered an emerging market until June 2021, when it was reclassified as stand-alone market. According to MSCI index countries classified as stand-alone markets are those that are currently partially or fully closed to foreign investors, where stock lending and short selling are activities that are either not developed or completely prohibited, with small capital markets and political tensions.
Risks include political, social and economic instability that may affect Argentina’s economic results, which can stem from many factors. In general, Argentine economic conditions are dependent on a variety of factors, including, but not limited to, the following: (i) domestic production, international demand and prices for Argentina’s principal export commodities, (ii) the competitiveness and efficiency of domestic industries and services, (iii) the stability and competitiveness of the peso against foreign currencies and exchange controls, (iv) high interest and inflation rates, (v) Argentina’s fiscal and trade deficits, (vi) Argentina’s public debt level, (vii) foreign and domestic investment and financing, (viii) governmental policies and the legal and regulatory environment, including import and export contracts and tax provisions, (ix) consumption levels, (x) wage and price controls and (xi) political uncertainty and social unrest.
Government policies and regulation— which at times have been implemented through informal measures and have been subject to radical shifts— that have had a significant impact on the Argentine economy in the past have included, among others: (i) monetary policy, including exchange controls, capital controls, high interest rates and a variety of measures to curb inflation; (ii) restrictions on exports and imports; (iii) price controls; (iv) mandatory wage increases and prohibition of dismissals; (v) taxation; and (vi) government intervention in the private sector.
Any of these factors, as well as volatility in the capital markets, may adversely affect our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.
Economic volatility in Argentina has adversely affected and may continue to adversely affect our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.
Our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations depend to a significant degree on macroeconomic, political, regulatory, and social conditions in Argentina. The Argentine economy has experienced significant volatility in recent decades, characterized by periods of low or negative growth, high and variable levels of inflation and interest rates and currency devaluation. As a consequence, our business and operations have been, and could in the future be, affected from time to time, to varying degrees, by the high volatility in Argentina, which primarily results from economic and political developments and other material events affecting the Argentine economy, such as: inflation, price controls, fluctuations in foreign currency exchange rates and interest rates; currency devaluation; governmental policies regarding tariffs, spending and investment, and other regulatory initiatives increasing government involvement with economic activity; and international conflicts, social unrest and insecurity concerns.
The Peso has experienced significant fluctuations in its value in recent years: based on exchange rate information published by Banco Nación, the Peso lost approximately 22.1% against the Dollar in 2021 and 72.5% in 2022. Although the exchange rate of the Peso against the Dollar lagged for most of 2023, the new National Government administration ordered a strong correction of the exchange rate and implemented a monthly floating parity of 2% after taking office on December 10, 2023. As a result, the variation of the Argentine Peso against the Dollar as of December 31, 2023, was 356.3%, reaching 805.45 Pesos. As of December 31,2024 the peso lost, compared to the dollar, approximately 27.7%.
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Immediately after the peso devaluation, it had a significant impact on the economy, leading to high inflation, reduced real wages, and increased difficulties for companies with domestic market revenues and foreign currency obligations. This situation could deteriorate in the future if the government chooses to devalue the currency abruptly again or implements a system of multiple exchange rates, thereby dividing the exchange market for different types of transactions.
As a result of the peso’s increased volatility, in 2019 the Government announced several measures to control and restrict the ability of companies and individuals to exchange pesos for foreign currencies. Those measures include the requirement to obtain prior approval from the BCRA, which could eventually restrict the ability to exchange pesos for other currencies. Moreover, restrictions also apply to the acquisition of any foreign currency for holding as cash within Argentina and to transfer dividends abroad, among others. Additionally, the Government implemented a new tax at a rate of 30% on certain transactions involving the acquisition of foreign currency. For additional information see “ Item 10. Additional Information—D. Exchange Controls .”
The ability of the Government to stabilize the foreign exchange market and restore economic growth is subject to uncertainty. The continued depreciation of the peso could have a material adverse effect on Argentina’s economy and, consequently, our business, results of operations and financial condition.
In addition, this rapid devaluation has confronted inflationary pressures, evidenced by significantly higher fuel and food prices, among other indicators. Inflation in Argentina has contributed to a material increase in our operating costs, in particular labor costs, and negatively affected our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations. There can be no assurance that inflation rates will not escalate in the future, and the effects of measures adopted or that may be adopted in the future by the Government to control inflation are uncertain. See “ —Government intervention in the Argentine economy could adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations ” and “—Additionally, the value of the peso affects the BCRA’s reserves. During 2024, these reserves remained under pressure despite measures implemented to accelerate the inflow of foreign currency. As of December 31, 2024, net reserves reached US$ 29,612 billion, up from US$ 23,073 billion in December 2023.
High levels of inflation could negatively affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.
The Argentine economy remains vulnerable, as reflected by the following economic conditions:

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high levels of inflation may continue to be high in the future;

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volatility in real GDP, which according to the restated information released by INDEC decreased by 2.5%, 2.2% and 10% in 2018, 2019 and 2020, respectively. In 2021 and 2022 the GDP increase 10.4% and 5.2%, respectively, decreasing 1.6% in 2023. Meanwhile in the fourth quarter 2024 increased by 2.1% with respect to the same period of 2023;
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Argentina’s public debt as a percentage of GDP, which remains high, and as of June 30, 2023 (latest data available), represented approximately 88.4% of the GDP;

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the discretionary increase in public expenditures that has resulted (and continues to result) in a fiscal deficit;

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high unemployment and informal employment rates;

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high exchange rate volatility;

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high fiscal and trade deficits;

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an inability to pay public debt and its maturities extension;

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limited access to funding in the local and international capital markets;

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agricultural exports, which fueled the economic recovery, have been affected by drought and lower prices than in prior years;

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fluctuations in international oil prices;

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unavailability of long-term credit to the private sector;

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the effects of a restrictive U.S. monetary policy, which could generate an increase in financial costs for Argentina;

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reduction in the BCRA’ s foreign currency reserves;

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uncertainty with respect to the imposition of exchange and capital controls;

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the abrupt fall in the value of sovereign bonds and a decline in consumer confidence or foreign direct investment; and

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other political, social and economic events outside of Argentina that adversely affect the current growth of the Argentine economy.
A decline in international demand for Argentine products, a lack of stability and competitiveness of the peso against other currencies, a decline in confidence among consumers and foreign and domestic investors, a high rate of inflation and future political uncertainties, among other factors, may affect the development of the Argentine economy which could lead to reduced aggregate demand and adversely affect our business, financial condition and results of operations.
As of the date of this Annual Report, the impact of the policies and measures adopted by the Government on the Argentine economy as a whole cannot be predicted. Also, we cannot predict the full future impact that changes in the application of the tax indexation procedure and related adjustments will have on our financial statements, or the effects on our effective tax rate or on our business, results of operations and financial condition. The factors described above, among other factors, may materially and adversely affect the development of the Argentine economy, which could adversely affect our business, financial condition and results of operations.
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The ongoing political instability in Argentina may adversely affect the Argentine economy.

Argentina’s political and social environment has historically influenced, and continues to influence, the performance of the country’s economy. Political and social crises have affected and continue to affect the confidence of investors and the public, which has historically resulted in economic deceleration and heightened volatility in securities with underlying Argentine risk. The recent political instability in Argentina has contributed to a decline in market expectations and forecasts for the Argentine economy. The Market Expectations Survey (“ REM ”) issued by the BCRA still shows high levels of inflation and exchange rate evolution and activity indicators that have not yet managed to achieve economic recovery. This suggests that the weak macroeconomic conditions in Argentina may continue in the upcoming years.
The Argentine economy is also particularly sensitive to local political developments. Presidential elections take place in Argentina every four years and legislative elections every two years, resulting in the partial renewal of both chambers of Congress.
The result of presidential, as well as legislative, mid-term and full-term elections may lead to changes in government policies that impact upon the Company. Since taking office, Javier Milei has had a clear objective to introduce changes aimed at altering the economic course of Argentina, particularly concerning the elimination of the fiscal deficit, the devaluation of the exchange rate, and the presentation of laws to Congress with the aim of reforming the public sector and the economy. For additional information see “The impact of the economic measures adopted or to be adopted by the Government may affect the Argentine’s economy” below.
The effect of these measure on the future economic and political scenario is uncertain. We cannot provide any assurance that future economic, social and political developments in Argentina, over which we have no control, will not impair our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.
We cannot guarantee that future economic, social and political developments in Argentina, over which we have no control, will not harm our business, the results of operations and financial situation, the value of our tradable securities and our ability to meet our financial obligations.
The impact of the economic measures adopted or to be adopted by the Government may affect the Argentine’s economy.
On October 22, 2023, general elections were held in Argentina. The result resulted in a new conformation of the Congress as from December 10, 2023 (in minority for the president-elect). On November 19, 2023, a run-off election was held, in which the opposition candidate for La Libertad Avanza, Javier Milei, was elected president. After taking office, the current administration launched a package of emergency measures aimed at relaxing controls and deregulating the economy, with the main objective of reducing the fiscal deficit. The impact of the outcome of such elections on the national government’s economic policies, the foreign exchange market and the national economy is uncertain, and we cannot assure you how the economy, the regulatory framework, the social situation and the political environment will respond and the impact this will have on our financial condition and results of operations.
On December 12, 2023, Luis Caputo, the Minister of Economy, announced a series of economic measures with a focus on the revision of fiscal, exchange and monetary policy in which, among other issues: (i) a strong cut in public spending is shown together with an increase in certain taxes, (ii) the price of the US dollar was raised with respect to the Argentine peso from $/U.S.$350 to $/U.S.$800 and a monthly crawling peg of 2%, (iii) reduction of subsidies to energy and transportation and (iv) limitation of monetary issuance and modification of the Treasury financing program in order to clean up the BCRA’s liabilities.
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Subsequently, on December 21, 2023, Decree of Necessity and Urgency No. 70/2023 Bases for the Reconstruction of the Argentine Economy” ( “Decree 70/2023” ) was published in the Official Gazette. Decree 70/2023 declares a public emergency in economic, financial, fiscal, administrative, social security, tariff, health and social matters until December 31, 2025. This decree promotes economic deregulation and the integration of Argentina into the world trade by adopting international standards for the trade of goods and services. Moreover, it empowers the Ministry of Energy to reassess the existing subsidy structure to ensure that end users have access to basic and essential consumption of electric energy and natural gas. Finally, it repeals Law No. 27,437 on Argentine procurement ( “Compre Argentino” ) and supplier development.
To this effect, Decree 70/23 repeals numerous laws on state intervention in the economy, such as the Food Shelf Law No. 27.545 (as amended and supplemented), the Supply Law No. 20.680 (as amended and supplemented), Law No. 26.992 on the Creation of the Price Observatory (as amended and supplemented), the Rent Law No. 27. 551 (as amended and supplemented), Law No. 27,437 on Buy Argentine (as amended and supplemented), Law No. 18,875 on Buy National and Law No. 20,075 on State-Owned Companies (as amended and supplemented), among others, with the purpose of liberalizing trade, services, and industry, and eliminating restrictions on the supply of goods and services that distort market prices.
Likewise, Decree 70/23 amends several regulatory bodies, including the National Civil and Commercial Code, the Customs Code, liberalizing foreign trade; the Labor Contract Law, making individual and collective labor relations more flexible; the health care system, making social security and prepaid health care contracts more flexible; and the Credit Card system, eliminating commission and interest ceilings. It also modifies special regulations related to multiple industries (such as energy, mining, telecommunications, agribusiness and tourism, among others).
In relation to foreign currency obligations, Articles 765 and 766 of the National Civil and Commercial Code are amended, redefining foreign currency obligations as obligations to give money, allowing the parties to free themselves from their obligations by delivering the agreed currency (including foreign currency).
On December 27, 2023, the National Executive Power submitted for consideration of the Congress of the Nation the Bill of Bases and Starting Points for the Freedom of the Argentineans (the “Ley Bases”). This law proposes a strong deregulation of the economy by proposing amendments and repeals of regulations in the following fields: (i) organization of the public administration; (ii) administrative procedure and regulatory quality; (iii) resolution of disputes with the State; (iv) insurance regime; (v) regime applicable to commercial companies; (vi) regime of financial administration of the State; (vii) comprehensive tax reform and establishment of a regime of exceptional regularization of tax, customs and social security obligations; (viii) agricultural, energy and tourism sectors, among other activities and industries; (ix) regime of obligations and contracts aimed at strengthening the autonomy of the will of the parties; (x) defense of competition; (xi) intellectual property; and (xii) promotion and incentives for large investments.
After six months of debate in the National Congress, on June 28, 2024, the Chamber of Deputies sanctioned the definitive text of the Ley Bases, which had previously obtained half sanction from the Senate. The law must be promulgated by the Executive Power of the Nation, by decree to that effect or through the “promulgation of fact”, since if it is not pronounced after ten business days from the time the rule was communicated to it, it is automatically promulgated. Among other issues, the Omnibus Law includes:

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The declaration of public emergency in administrative, economic, financial and energy matters for a period of one year.

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Changes in the calculation of income tax for individuals, in the monotax regime, personal property and money laundering.

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The total or partial privatization of certain companies and companies wholly or majority owned by the national state is authorized.

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An Incentives for Large Investments (“RIGI”) scheme for projects involving investments equal to or greater than U.S.$200 million.

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The creation of a proportional retirement benefit for those who, reaching retirement age, do not reach the years of necessary pension contributions.

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A labor reform and the retirement regime.

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The amendment to the Natural Gas Act in order to, among other things, allow the extension of the license for an additional period of 20 years (as opposed to the 10 years originally established extension).
In addition, the Ley Bases seeks to grant powers to the current Government, for a period of one year, to adjust the electrical regulatory framework, in order to, among other points: (i) promote the opening of international trade in electricity under conditions of safety and reliability, with the aim of achieving the largest number of participants in the industry, and the State may object on technical or economic grounds on security of supply; (ii) ensure the free marketing and maximum competition of the electric power industry, ensuring the free choice of the electricity supplier for end users; (iii) provide the specification of the different concepts to be paid by the end user, with the explicit obligation of the distributor to act as agents for the collection or retention of the amounts to be received for energy, transport and taxes corresponding to the MEM and the treasury, as appropriate; (iv) ensure the development of electricity transport infrastructure through open, transparent, efficient and competitive mechanisms; and (v) modernize the review of administrative structures, both centralized and decentralized, in the electricity sector, modernizing and professionalizing them for better performance of assigned functions. Likewise, the project seeks to grant the Government, until December 31, 2025 the power to create, modify, transform and / or eliminate trust funds in the energy sector, including those destined for subsidies.
Likewise, modifications are introduced to the Hydrocarbons Law of Argentina and the Tax Oil Fields Law No. 26,741, in order to allow concessionaires, refineries and / or marketers of hydrocarbons to freely export hydrocarbons and / or their derivatives without the need to meet domestic demand. In this sense, it stipulates that the state will not be able to intervene in the establishment of marketing prices in the domestic market at any stage of production.
Additionally, through Decree No. 585/2024, the Ministry of Deregulation and State Transformation was created. Among its functions are, among others, deregulation and state reform, which involve formulating public policies that simplify and reduce the size of the State with the aim of eliminating unnecessary, duplicated, and/or obsolete tasks, promoting the creation of private employment, economic development, and the alignment of tax structures, as well as facilitating market operations and reducing regulations and controls.
In this line, in October 2024, the dissolution of AFIP was announced and it was replaced by the creation of the Revenue and Customs Control Agency (“ARCA”), under the Ministry of Economy. Additionally, starting in September 2024, the PAIS tax was reduced from 17.5% to 7.5%. This measure had a significant impact on the prices of goods and services. Subsequently, starting on December 23, 2024, it was eliminated.
It is noteworthy that during 2024, President Javier Milei issued two presidential vetoes on laws promoted in Congress, such as the modification of pension benefits and university funding. These vetoes were made considering the fiscal balance policy established by the Argentine government and to preserve public accounts.
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On April 11, 2025, the Government announced the launch of the next phase of its macroeconomic plan, which includes, among other measures: (i) allowing the exchange rate of the U.S. dollar in the official foreign exchange market (MULC) to fluctuate within a moving band between ARS 1,000 and ARS 1,400, with the band limits widening at a monthly rate of 1%; (ii) eliminating the “dólar blend” mechanism, lifting foreign exchange restrictions for individuals, allowing profit distributions to foreign shareholders starting from fiscal years beginning in 2025, and relaxing deadlines for foreign trade payments; and (iii) reinforcing the nominal anchor by enhancing the monetary policy framework, under which the Central Bank will not issue pesos to finance the fiscal deficit or to remunerate its monetary liabilities.
As of the date of this annual report, it is not possible to foresee the impact that the measures adopted and those that may be adopted in the future will have on the financial situation and results of the Company’s operations and on the economic situation of Argentina.
In addition, despite signs of improvement, the new administration will still need to face macroeconomic challenges such as reducing inflation, maintaining the fiscal and trade surplus, and increasing the central bank’s reserves, as well as dealing with the evolution of the exchange rate, the payment of public debt, among other issues. It is difficult to predict the impact that the measures adopted or to be adopted in the future may have on the Argentine economy, the political and social situation and their impact on our financial condition and results of operations.
Additionally, the value of the peso affects the BCRA’s reserves. During 2024, these reserves remained under pressure despite measures implemented to accelerate the inflow of foreign currency. As of December 31, 2024, net reserves reached US$ 29,612 billion, up from US$ 23,073 billion in December 2023.
High levels of inflation could negatively affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.
Pursuant to Argentine law, the INDEC is the only institution in Argentina entitled to publish official nationwide statistics. In addition, inflation has undermined the Argentine economy and the Government’s ability to stimulate economic growth. In the past, there have been concerns regarding the accuracy of the INDEC statistics. In 2007, the INDEC changed the way it calculated inflation statistics such as CPI and WPI.
In the past, due to the lack of accuracy of the INDEC statistics, the IMF executive board issued a declaration of censure against Argentina in connection with Argentina’s breach of its obligations to provide information to the IMF under the Articles of Agreement and called on Argentina to adopt remedial measures to address the inaccuracy of inflation and GDP data without further delay. The uncertainty relating to the inaccuracy of the economic indexes and rates may lead to a lack of confidence in the Argentine economy and may, in turn, limit our ability to access credit and capital markets, which could adversely affect our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.
High inflation rates affect Argentina’s foreign competitiveness and social and economic inequality, negatively impact employment, consumption and the level of economic activity, and undermine confidence in Argentina’s banking system, which could further limit the availability of and access by local companies to domestic and international credit. Inflation rates could escalate in the future, and there is uncertainty regarding the effects that the Government’s measures to control inflation may have. Increased inflation could adversely affect the Argentine economy, which in turn may have an adverse effect on our business, financial condition and results of operations.
In the past, inflation has significantly undermined the Argentine economy and the government’s ability to foster conditions for stable growth. Currently, Argentina is facing inflationary pressures, as evidenced by higher fuel, energy, and food prices. There is uncertainty about the potential acceleration of inflation rates in the future and the impact of measures adopted or that may be adopted by Argentina to control inflation.
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In the past years, the Government has taken certain measures to curb inflation, such as implementing price controls and limiting wage increases. Nevertheless, the government of Javier Milei adopted a new economic plan that allowed for the reduction of inflation since he took office in December 2023. The CPI variation for the year ended on December 31, 2023, was 211.4%. Between December 2023 and January 2025, a consistent decrease in the CPI was observed, with rates of 25.5%, 20.6%, 13.2%, 11%, 8.8%, 4.2%, 4.6%, 4%, 4.2%, 3.5%, 2.7%, 2.4%, 2.7%, and 2.2%, respectively. This reduction in inflation was a result of the policies adopted by the government, which led to an adjustment in relative prices. If the government continues with measures aimed at organizing macroeconomic variables and stabilizing expectations, it can be expected that inflation will continue to decline.
We cannot assure you that inflation rates will not continue to increase in the future or that any measures taken or that may be taken by the Milei administration to control inflation will be effective or successful. High inflation rates continue to be a challenge for Argentina. Significant increases in inflation rates could have a material adverse effect on Argentina’s economy and, in turn, could increase our operating costs, in particular labor costs, and could adversely affect our business, financial condition and results of operations.
As discussed elsewhere in this Annual Report, given that the Argentine economy has been considered as hyperinflationary, since July 1, 2018, we have applied IAS 29 in our Financial Statements, which requires that the financial statements of an entity whose functional currency is that of a hyperinflationary economy, regardless of whether they are based on the historical cost method or the current cost method, be expressed in terms of the current unit of measurement at the reporting date of the reporting period. See “ —Presentation of Financial and Other Information—Financial Statements and Basis of Preparation .”
Because Natural Gas Transportation business segment sales represented 36% of our total revenues during the year ended December 31, 2024, and are denominated in pesos, any further increase in the rate of inflation not accompanied by a parallel increase in our tariffs would decrease our revenues in real terms and adversely affect our results of operations. Further, as a consequence of the application of IAS 29, maintaining monetary assets generates loss of purchasing power; provided that such items are not subject to an adjustment mechanism that compensates to some extent such loss. This loss is booked in the statement of comprehensive income.
Restrictions on transfers of foreign currency and the repatriation of capital from Argentina may impair our ability to pay dividends or imports and investors may face restrictions on their ability collect capital and interest payments in connection with corporate bonds issued by Argentine companies.
Without prejudice to the statements of the current president of Argentina, Javier Milei, regarding the elimination of restrictions on access to the exchange market, considering the current context of destabilization affecting Argentina, greater restrictions on access to the exchange market could be imposed in response to an outflow of capital or a significant devaluation of the peso.
The Argentine government and the BCRA have implemented certain measures that control and restrict the ability of companies and individuals to access to the foreign exchange market.  Those measures include certain restrictions, such as: (i) the payment of imports and other purchases of goods abroad, (ii) the purchase of foreign currency by residents with specific application, (iii) the payment of profits and dividends, (iv) the payment of capital and interest on financial indebtedness, among others.
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In this context, Argentine companies cannot save in dollars, and although it is possible to access the foreign exchange market for the payment of financial debt, such access is granted very close to the due date, and advance payments are not possible. Furthermore, access to the foreign exchange market for the payment of dividends is also restricted.
In the past, as a result of exchange controls, the difference between the official exchange rate, which is currently used for commercial and financial transactions, and other secondary exchange rates that implicitly arose as a result of certain transactions commonly carried out in the capital market (“MEP” or “contado con liquidación” dollar) widened considerably, creating a gap above 100% during 2023, reducing after the increase of the exchange rate after December 13, 2023 to around 10% at the end of 2024. The Government could maintain a single official exchange rate or create multiple exchange rates for different types of transactions, substantially changing the exchange rate at which we purchase foreign currency to repay its foreign currency denominated indebtedness. In addition, the imposition by the government of additional exchange controls and restrictions and/or other measures in response to capital outflows or devaluation of the Peso could weaken public finances. Such a weakening of public finances could have an adverse effect on our results of operations and financial condition.
For additional information see “Item 10. A. Exchange Controls.”
As of the date of this Annual Report, the restrictions outlined above remain in place, although they have been significantly reduced during 2024 and the first months of 2025. Such measures may negatively affect Argentina’s international competitiveness, discouraging foreign investments and lending by foreign investors or increasing foreign capital outflow which could have an adverse effect on economic activity in Argentina, and which in turn could adversely affect our business and results of operations. Any restrictions on transferring funds abroad imposed by the government could undermine our ability to pay dividends on our ADSs in U.S. dollars. Furthermore, these measures may cause delays or impose restrictions on the ability to collect payments of capital and interest on bonds issued by us. The challenge will be to achieve acceptance by creditors, in accordance with the BCRA regulations mentioned above, especially when it has highly diversified and retail creditors.
Fluctuations in the value of the peso may also adversely affect the Argentine economy, our financial condition and results of operations.
Since January 2002, the peso has fluctuated significantly in value and generally depreciated against the U.S. dollar, with adverse consequences to our business. A substantial increase in the value of the peso against the U.S. dollar could also present risks for the Argentine economy, since it may lead to a deterioration of the country’s current account balance and the balance of payments. The devaluation has also had a negative impact on companies and affected the government’s ability to meet its financial obligations. It has also led to an increase in prices and a decline in real wages. The devaluation of the Argentine peso also has negative consequences for the Argentine economy, reducing economic activity, employment, and public sector revenues.
Additionally, the value of the peso affects the BCRA’s reserves. During 2024, these reserves remained under pressure despite measures implemented to accelerate the inflow of foreign currency. As of December 31, 2024, net reserves reached US$ 29,612 billion, up from US$ 23,073 billion in December 2023.
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Over several years, the value of the Argentine peso has experienced significant fluctuations against the US dollar, depreciating by more than 100% in 2018. In 2021, 2022, and 2023, the Argentine peso depreciated by 22.1%, 72.5%, and 356.3%, respectively.
In 2024, the Argentine peso continued to depreciate against the U.S. dollar and other major foreign currencies. According to the Banco Nacion’s selling exchange rate, the Argentine peso reached Ps. 1,032 to December 31, 2024, presenting a variation of 27.6% with respect to 2023. This is a consequence of the exchange rate policy where the Argentine government defined a stable devaluation path of 2% per month against the US dollar. Starting in February 2025, and in line with the reduction in inflation, this path was adjusted to 1%.
On April 11 the Government announce the creation of a moving band for the US dollar starting between ARS 1,000 and ARS 1,400 with the band limits widening at a monthly rate of 1%.
The Milei administration implemented policies aimed at modifying Argentina’s macroeconomic conditions, such as reducing the fiscal deficit the current spending of the national administration and reforming the State. To address the issue of increasing commercial debts, under the Milei administration, the BCRA has been offering U.S. dollar-denominated securities (BOPREAL). Pursuant to current BCRA rules, importers will not be entitled to access the MULC for 90 days if they have conducted exchange transactions involving the sale/purchase of securities (other than BOPREALs) settled in dollars abroad. In this regard, between January and May 2024, the BCRA completed the Series 1, 2 and 3 BOPREAL auctions issuing their maximum amounts of US$5,000 million, US$2,000 million and US$3,000 million, respectively. Series 3 of BOPREAL was also qualified for subscription by those who have debt related to payment of dividends (BCRA Communication “A” 7999) and comply with certain conditions.
As of December 31, 2024, the total amount of principal and accrued but unpaid interest under our consolidated U.S. dollar-denominated indebtedness was U.S.$562 million.
We cannot predict the future exchange rate between peso and the U.S. dollar, or how any fluctuation may affect our operational costs denominated in U.S. dollars. Also, we cannot predict success of future Government measures and the impact of them in the exchange rate or the BCRA reserves.
Further depreciation of the peso against the U.S. dollar would likely result in a material adverse effect on our business because of our exposure to financial debt in U.S. dollars. In addition, future devaluations could result in higher inflation, reduce real wages and adversely affect the Government’s ability to honor its foreign debt obligations. The depreciation of the Peso can also negatively impact businesses whose success is dependent on domestic market demand, and adversely affect the Government’s ability to honor its foreign debt obligations.
A substantial increase in the exchange rate of the Peso against foreign currencies of the Peso against the U.S. dollar also represents risks for the Argentine economy since it may lead to a deterioration of the country’s current account balance and the balance of payments which may have a negative effect on GDP growth and employment, and reduce the revenue of the Argentine public sector by reducing tax revenue in real terms, due to its current heavy dependence on export taxes.
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The impossibility of addressing the actual and potential risks of institutional deterioration and corruption, the economy and the financial situation of Argentina has been affected negatively and could continue to be.
Argentina is ranked 99 out of 180 in Transparency International’s 2024 Corruption Perceptions Index. The lack of a solid and transparent institutional framework for contracts with the Argentine government and its agencies and accusations of corruption have affected and could affect negatively to Argentina.
Likewise, at the date hereof, other ongoing investigations into complaints of money laundering and corruption are underway.
Recognizing that the failure to address these issues could increase the risk of political instability, distort decision making processes and adversely affect Argentina’s international reputation and ability to attract foreign investment, on November 8, 2017, Congress passed Law 27,401 which establishes the criminal liability of legal persons and regulates integrity programs for a precise number of cases of corruption. The law holds legal persons responsible for the crimes of bribery and influence peddling, national and transnational, negotiations incompatible with the exercise of public functions, concussion, illicit enrichment of officials and employees and aggravated false reports and balances, in order to hide bribery and influence peddling, national and transnational.
Law 27,401 assigns a decisive importance to integrity programs as an element of weighting the liability of legal persons in acts of corruption. Thus, an appropriate Integrity Program can: i) exempt from criminal liability, if a spontaneous self-complaint is made jointly and the benefit obtained is returned, ii) mitigate the eventual sanction, iii) be a condition for an effective collaboration agreement, and iv) be an enabling requirement for the offeror in certain contracts with the Government.
In this context, the Anti-Corruption Office, through Resolution No. 27/2018, established the integrity guidelines for the best compliance with the Integrity Program established in Law 27,401.
We have an Integrity Program that has not been questioned by the implementing authorities and that follows the guidelines described in Resolution No. 27/2018; as well as the provisions of Law 27,401.
There can be no assurance that the implementation of these measures by Argentina will be successful or even sufficient in strengthening Argentina’s institutions, enhancing the integrity of public officials, stopping institutional deterioration and preventing corruption. We cannot control or predict whether such investigations or allegations will lead to further political or economic instability or whether new allegations against government officials, members of the Argentine Congress, judges or owners or officers of other companies will arise, nor can we predict the outcome of any such allegations and their effect on the Argentine economy, which may be adverse.
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Government intervention in the Argentine economy could adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.

Although Javier Milei’s government has taken a series of measures aimed at economic deregulation and trade liberalization in Argentina, (for additional information see “The impact of the economic measures adopted or to be adopted by the Government may affect the Argentine’s economy” above ), the Argentine government has historically exercised significant influence over the economy, and public services companies in particular have operated in a highly regulated environment. Our business and operations have been, are and could in the future be affected by actions taken by the Government through the implementation of new or amended laws and regulations, such as nationalizations, expropriations, forced divestiture of assets, amendments to or renegotiation or revocation of a license, restrictions on production, imports and exports, exchange and/or transfer restrictions, including those relating to dividend payments, direct and indirect price controls, tax increases, changes in the interpretation or application of tax laws and other retroactive tax claims or challenges, cancellation of contractual rights and delays or denials of governmental approvals.
In the past, the Argentine government has intervened directly in the economy, through the implementation of expropriation and nationalization measures, price controls and exchange controls.
Among other examples, in 2008, the Government absorbed and replaced the former private pension system with a public “pay as you go” pension system. As a result, all resources administered by the private pension funds, including significant equity interests in a wide range of listed companies, were transferred to a separate fund ( Fondo de Garantía de Sustentabilidad or “ FGS ”) to be managed by the Administración Nacional de la Seguridad Social (“ ANSES ”). ANSES is entitled to designate government representatives to the boards of directors of these companies. The nationalization of Argentina’s pension and retirement system was a change significant in the Argentine government’s approach to the main public companies. FGS currently holds 24.0% of our outstanding capital stock and has two representatives on our Board of Directors. On November 19, 2020, Law 27,574 regulates the role of the representatives of the FGS in those companies in which it has a stake, providing that the FGS will dictate the rules that are necessary in order to regulate their appointment, function, responsibility, performance and remuneration, which has been regulated by Decree No. 1041/2020 and ANSES Resolution No. 57/2021.
For additional information regarding rules and regulations that govern our relationship with FGS, see “ Item 7. Major Shareholders and Related Party Transactions. ”
In 2012 and again in 2013, the Argentine Congress established new regulations providing for increased intervention in the capital markets by the Government. On May 9, 2018, the Macri administration approved an amendment to the Law of Productive Financing, including amendments to the Capital Markets Law of Argentina No. 26,831 (the “Capital Markets Law” ), which, among other things, limited the scope of intervention by the CNV in public companies.
The Government has also adopted numerous measures to directly or indirectly control the access by private companies and individuals to foreign trade and foreign exchange markets, such as restricting free access to these markets and imposing the obligation to repatriate and sell within the local foreign exchange market all foreign currency revenues obtained from exports. These regulations have been recently reinstated, preventing or limiting us from offsetting the risk derived from our exposure to the U.S. dollar and the access to foreign exchange market.
Historically, actions of the Government concerning the economy, including decisions regarding interest rates, taxes, price controls, wage increases, increased benefits for workers, exchange controls and potential changes in the market of foreign currency, have had a substantial adverse effect on Argentina’s economic growth. A low-growth and high-inflation rates scenario continues and is likely going forward, as a result of the accumulation of macroeconomic imbalances over recent years, the actions of the Government in regulatory matters and challenging conditions in the international economy. We can offer no assurance that policies implemented by the Government will not adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.
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As of the date of this Annual Report, we cannot predict the results or impact of measures on the hydrocarbons development in Argentina. We are also unable to predict whether the Government will take any additional measures that may negatively affect Argentina’s hydrocarbons market.
Argentina is an emerging market economy that is highly sensitive to local political developments that have had an adverse impact on the level of investment in Argentina and the access of Argentine companies to the international capital markets. Future developments may adversely affect Argentina’s economy and, in turn, our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.
The current administration also adopted other measures to reduce the impact of utility tariffs on the economy. These measures included the freezing of tariffs, the pesification of electricity generation tariffs, and the deferral of the payment of natural gas electricity generation tariffs, and the deferral of natural gas bill payments for certain consumers, among others. In addition, the Executive Branch declared the intervention of ENARGAS.
We cannot provide any assurance that we will be able to access foreign exchange markets or that these measures will not cause fluctuations in the value of the peso. The setting of certain exchange controls and other future economic, social and political developments in Argentina, over which we have no control, may adversely affect our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations. For additional information on developments relating to exchange controls, see “ Item 10. Additional Information—D. Exchange Controls. ”
The Argentine economy may be adversely affected by economic developments in other markets and by more general effects, which could have a material adverse effect on Argentina’s economic growth.
Argentina’s economy is vulnerable to external shocks that could be caused by adverse developments affecting its principal trading partners and emerging markets. A significant decline in the economic growth of any of Argentina’s major trading partners (including Brazil, the European Union, China and the United States) could have a material adverse impact on Argentina’s trade balance and, therefore, adversely affect Argentina’s economic growth. Economic slowdowns have led to declines in Argentine exports in the last few years. Specifically, fluctuations in the price of the commodities sold by Argentina and a significant revaluation of the peso against the U.S. dollar could harm Argentina’s competitiveness and affect its exports.
The economy in Brazil, one of the main import and export markets for Argentina, has experienced rising negative pressure because of political uncertainty, putting pressure on the products that Argentina exports to that country and its competitiveness. Argentine foreign trade is highly dependent on the Brazilian economy; thus, a poor performance of Brazil’s economy could lead to the deterioration of Argentina’s trade balance. Additional Brazilian political and economic crises could negatively affect the Argentine economy.
Financial and securities markets in Argentina are also influenced by economic and market conditions in other markets worldwide. U.S. monetary policy has significant effects on capital inflows and asset price movements in emerging market economies. Increases in U.S. interest rates result in the appreciation of the U.S. dollar and decreases in prices for raw materials, which can adversely affect commodity-dependent emerging economies.
Additionally, a slowing of China’s GDP growth has led to a reduction in exports to this Asian country, which in turn has caused oversupply and price declines in certain commodities. Decreases in exports have a material adverse effect on Argentina’s public finances due to the loss of taxes on exports, causing an imbalance in the country’s exchange market.
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Since 2023 the world has faced a range of macro challenges including the war in Ukraine, military conflicts in the middle east, inflationary pressures and risk of global recession. During the year, U.S. Federal Reserve increased its target reference rate to relieve inflationary pressure which had a negative impact in the cost of credit for emerging markets.
Also, important banking entities suffered liquidity problems, giving rise to uncertainty in the global economy. This initially materialized in the United States with the collapse of Silicon Valley Bank, which the US government decided not to rescue. This instability had its contagion in Europe when the shares of Credit Suisse plummeted by up to 30% and the Swiss National Bank was affected. Deutsche Bank then suffered a massive sell-off of its shares, which led to further concern at the European Central Bank.
On January 2025, Donald Trump took office as President of the United States. The actions taken by the new administration in its first few months, have raised certain doubts regarding international trade, including the possibility of renegotiation of trade agreements, implementing a stricter tariff policy and the escalation of protectionist trade policies. Furthermore, on April 2, 2025, President Trump announced that the United States would impose a 10% tariff on all countries, effective on April 5, 2025, and an individualized reciprocal higher tariff on countries with which the United States has the largest trade deficits. While certain energy products have been exempted, the effect on global economic growth and trade of these measures remains uncertain, and could disrupt global trade flows, and increase operational costs for companies reliant on international supply chains.
We are subject to import regulations, supply chain dependencies, and cross-border energy trade policies that could be affected by U.S. government actions. Any tariff increases, trade restrictions, or enforcement measures targeting the energy sector could increase costs, limit access to critical infrastructure and materials, and disrupt operational continuity.
Also, in his inaugural speech, President Trump announced measures related to defense and energy emergency, particularly the increase in oil production, which could have an impact on the price.
Likewise, Argentina’s expectations are focused on the agreement with the IMF.
Although economic conditions vary from country to country, investors’ perceptions of events occurring in other countries have in the past substantially affected, and may continue to substantially affect, capital flows into and investments in securities from issuers in other countries, including Argentina. International investors’ reactions to events occurring in one market sometimes demonstrate a “contagion” effect, in which an entire region or class of investment is disfavored by international investors. Argentina could be adversely affected by negative economic or financial developments in other countries, which in turn may have an adverse effect on our financial condition and results of operations.
Certain economic policies of the former government administration in Argentina, including foreign exchange restrictions, led in the past to a reduction in exports and foreign direct investments, to a decline in national tax revenues and to an inability to access international capital markets. There can be no assurance that the Argentine financial system and securities markets will not be adversely affected by policies that may be adopted by the government in the future or by events in the economies of developed countries or in other emerging markets. A slowdown in economic activity in Argentina would adversely affect our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.
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Argentina’s past default and litigation with holdout bondholders may limit our ability to access international markets.
Argentina’s history of defaults on its external debt and the protracted litigation with holdout creditors, summarized below, may reoccur in the future and prevent Argentine companies such as us from accessing the international capital markets readily or may result in higher costs and more onerous terms for such financing, and may therefore negatively affect our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.
Following the default on its external debt in 2001, Argentina sought to restructure its outstanding debt by offering holders of the defaulted bonds two opportunities to exchange them for newly issued debt securities, in 2005 and again in 2010. Holders of approximately 93% of Argentina’s defaulted debt participated in the exchanges. Nonetheless, a number of bondholders held out from the exchange offers and pursued legal actions against Argentina in the courts of the United States and several other countries.
However, even though Argentina has successfully accessed the international capital markets since the settlement, there continues to be a risk that the country will not attract the foreign direct investment and financing needed to restart the investment cycle and achieve sustainable rates of economic growth. If that occurs, Argentina’s fiscal condition could be adversely affected, which could lead to more inflation and undermine the government’s ability to implement economic policies designed to promote growth. The difficulty of sustaining economic growth over time with reasonable price stability could result in a renewed episode of economic instability.
In addition, the foreign shareholders of several Argentine companies (including us), together with public utilities and certain bondholders that did not participate in the exchange offers described above, filed claims with the International Center for Settlement of Investment Disputes (“ ICSID ”), alleging that the emergency measures adopted by the Government in 2002 did not meet the just and equal treatment requirements of several bilateral investment treaties to which Argentina is a party. Several of these claims have been resolved against Argentina. Claimants have also filed claims before arbitral tribunals under the rules of the United Nations Commission on International Trade Law (UNCITRAL) and under the rules of the International Chamber of Commerce. Several awards have been issued against Argentina and several cases are still ongoing.
Moreover, difficulties in accessing Argentina’s international credit may have an impact on our company as the Argentine government postponed the maturity dates of its bonds and cut interest rates.
Also, ongoing situations, such as the claims before the ICSID, and the economic policy measures adopted by the Government, or any future default of Argentina regarding its financial obligations may harm Argentine companies’ ability to obtain financing. Financial conditions of such access could be disadvantageous to Argentine companies and, therefore, may adversely affect our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.
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A sustained deterioration in the terms of trade given a decline in the global prices for Argentina’s main commodity exports or an increase in the global prices for Argentina’s main commodity imports, as well as adverse weather conditions affecting the production of Argentina’s main commodity exports, could have an adverse effect on Argentina’s economic growth.
High commodity prices have contributed significantly to an increase in Argentine exports, which has in turn led to an increase in government revenues received from export taxes. However, the reliance on the export of certain commodities, such as soybeans, has made the Argentine economy vulnerable to fluctuations in commodity prices, and, consequently, the Argentine economy could be adversely affected if trading conditions decline.
In addition, adverse weather conditions, such as floods or droughts, could affect the production of the main agricultural commodities produced by Argentina, which account for a significant portion of its export revenues. Moreover, higher oil prices could lead to an increase in government expenditures. The drought experienced during the summer months of 2018 dramatically reduced the yield from Argentina’s soybean crop. Also, during 2023 the country experienced another severe drought, which is estimated to have resulted in losses in the net income of the producer sector totaling U.S.$10,425 million, the equivalent of 2.2% of the GDP that the IMF estimates for Argentina in 2023. If agricultural commodity prices decline or their production is affected by weather or other variables, the Argentine economy could be adversely affected. These circumstances could also have a negative impact on tax revenues, the BCRA’s reserves, the availability of foreign currency and ultimately negatively affect our economic and financial performance.
Besides, in March 2020, after a failure to reach an agreement between the members of the Organization of the Petroleum Exporting Countries (“ OPEC ”) and Russia to stabilize the oil market, Saudi Arabia decided to increase its oil production. This decision has triggered the most important decline in the oil price since 1991, of around 30%, which added to the fragile macroeconomic situation in Argentina, generating uncertainty regarding the production and development of natural gas in the country, especially in the Vaca Muerta area. In December 2020, OPEC and its oil-producing allies agreed to increase production by 500,000 barrels per day beginning in January. The group exerts considerable influence over world energy markets.  Uncertainty about oil prices and other commodities remain and there can be no assurances about any measures that the Government may take in response to key macroeconomic variables, particularly on the energy sector.
Decisions relating to international oil prices could have a negative impact on Argentina’s economy as, to achieve a fiscal surplus, the country should develop new production projects, such as Vaca Muerta formation, increase its revenues and maintain its ability to service its sovereign debt. Either of these results would adversely impact Argentina’s economic growth and, therefore, our financial condition and results of operations.
Further downgrades in the credit rating or rating outlook of Argentina could impact the rating of our securities or adversely affect the market price of our securities.
In August 2018, Moody’s revised its outlook of Argentina’s long-term and short-term sovereign credit rating to Caa2, primarily as a result of the sharply weaker economic activity and uncertain prospects for multiyear fiscal consolidation and market financing availability as IMF funds are used up, posing risks to sovereign debt sustainability. In addition, on August 29, 2019, S&P downgraded Argentina’s long-term and short-term sovereign credit ratings from “B” to “SD,” primarily as a result of an erosion of the Argentine debt profile, the economic growth trajectory and the dynamics of inflation, against the backdrop of the implementation of a challenging economic adjustment program. Fitch, Moody’s and S&P increased Argentina’s credit rating in September 2020 following the successful refinancing of Argentina’s external bonds. While the debt restructuring in 2020 improved Argentina’s credit rating, there are still concerns about debt sustainability and the country’s ability to meet its payment obligations in the future. In September 2021, Argentina’s credit rating according to Fitch Ratings was “RD” (restricted default) for foreign currency debt and “CC” for local currency debt. In March 2023, Fitch downgraded the credit rating to C, the lowest level above default.
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Argentina’s long-term debt denominated in foreign currency, as of the date of this Annual Report, is rated “CA (stable)” by Moody’s, “ B-” by S&P, and “CCC-” by Fitch.
However, there can be no assurance that Argentina’s credit rating or rating outlook will not be downgraded in the future, which could have an adverse effect on the rating of our securities or adversely affect the market price of our securities.
The Argentine government may mandate salary increases for private sector employees, which would increase our operating costs.
In the past, the Government has passed laws, regulations and decrees requiring companies in the private sector to maintain minimum wage levels and provide specified benefits to employees. Argentine employers, both in the public and private sectors, have experienced significant pressure from their employees and labor organizations to increase wages and to provide additional employee benefits. Due to high levels of inflation, employees and labor organizations regularly demand significant wage increases.
It is possible that the Argentine government could adopt measures mandating further salary increases or the provision of additional employee benefits in the future. Any such measures could have a material and adverse effect on our business, results of operations and financial condition.
Argentine corporations may be restricted from making payments in foreign currencies or from importing certain products
There are certain restrictions in Argentina that affect corporations ‘ability to access the MLC to acquire foreign currency to transfer funds to other countries, service debt, make payments outside Argentina and other operations, requiring, in some cases, prior approval by the Central Bank. These restrictions may affect our operations and our expansions projects, as they require the import of services and goods for which payment may be restricted. The Argentine Government may impose or create further restrictions on the access to the MLC. In such case, the ability of Argentine corporations to make payments outside Argentina and to comply with their obligations and duties may be affected.
In addition, as a result of the deepening of exchange controls, the difference between the official exchange rate, which is currently utilized for both commercial and financial operations, and other informal exchange rates that arose implicitly as a result of certain operations commonly carried out in the capital market. The Argentine Government could maintain a single official exchange rate or create multiple exchange rates for different types of transactions, substantially modifying the applicable exchange rate at which we acquire currency to service our outstanding foreign currency denominated liabilities. We cannot predict how such current restrictions may evolve after this annual report, mainly regarding limitations to transfer funds outside the country.
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The Argentine Government may impose further exchange controls or restrictions to capital transfers and modify and adopt other policies that may limit or restrict our ability to access international capital markets, to make payments of principal and interest and other additional amounts outside the country (including payments relating to our notes), to import certain products or goods that we use as inputs, or affect in other ways our business and our operational results, or cause the market value of our ADSs and our common shares to decline. Exchange controls in an economic environment in which the access to local capital markets is restricted may cause an adverse effect in our activities, mainly in our ability to make payments of principal and/or interest of our notes in foreign currency.
The conflict between Russia and Ukraine and between Israel and Iran could adversely affect the global economy, the Argentine economy and our operational results and financial condition.
On February 24, 2022, the President of Russia, Vladimir Putin, announced a military operation in the eastern Donbas region of Ukraine and began a full-scale invasion of the country.
The invasion received widespread international condemnation, with worldwide protests against the Russian invasion of Ukraine. The United States, the United Kingdom and other countries of the European Union imposed economic sanctions on Russia-such as the exclusion of certain Russian banks from the SWIFT financial system, airspace restrictions, export restrictions of Russian oil and gas, among others-which could eventually affect the supply of oil and gas from this country and trigger higher inflation and market shocks.
Actual and threatened responses to Russia’s invasion, as well as a rapid peaceful resolution to the conflict, may also impact the markets for certain commodities, such as electricity, oil and natural gas, and may have collateral impacts, including increased volatility, and cause disruptions to the availability of certain commodities, commodity and futures prices and the supply chain globally. Rising wheat prices raised tensions in countries like Egypt, which rely heavily on wheat exports from Russia and Ukraine, and sparked fears of social unrest. On the other hand, Russia is the second largest oil exporter in the world and the largest producer of natural gas, causing the world oil prices jumped over U.S.$110 per barrel in 2022, and the cost of natural gas reached a new record high in Europe. In this sense, in Argentina, the natural gas supply for this next winter may be affected, with negative effects on the energy generation, especially for industries. The shortage on natural gas may adversely affect our pipeline system and operations.
On April 13, 2024, Iran launched a large-scale attack with drones and missiles against Israel in retaliation for an alleged Israeli attack on an Iranian diplomatic complex in Syria on April 1, 2024. The Argentinean Government condemned the attack of Iran against the State of Israel and reaffirmed its support for Israel’s legitimate right to defend its sovereignty. As of the date of this Annual Report we cannot predict the final outcome or consequences that may arise from this conflict, and the direct or indirect effects that this conflict may have on Argentina and particularly on our business.
We continue operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability since the ongoing military conflict between Russia and Ukraine, escalation of conflict between Israel and Iran, poor global economic performance, a potential recession looming in the U.S. and Europe and China showing weak growth.
The open conflict in Europe is a trigger for many the geopolitical risks over the short- and medium-term. As Western sanctions on Russia bite and Russia weaponizes energy, the siege-like standoff between the West and Russia may escalate, and ripple effects from Ukraine war or the unknown effects of the arising conflict between Israel and Iran will continue to amplify challenges, as emerging markets face a slow rebound after the economic crisis, including high food and energy costs, higher U.S. interest rates, a strong U.S. dollar and slow Chinese growth.
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Any of the above-mentioned factors could affect our business, prospects, financial condition, and operating results. The extent and duration of the military action, sanctions, and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described in this Annual Report.
Risks Relating to Our Shares and ADSs
Shareholders outside Argentina may face additional investment risk from currency exchange rate fluctuations in connection with their holding of our shares or ADSs represented by ADRs. Exchange controls imposed by the Government may limit our ability to make payments to the Depositary in U.S. dollars, and thereby limit ADR holders’ ability to receive cash dividends in U.S. dollars.
We are an Argentine company and any future payments of dividends on our shares will be denominated in pesos. The peso has historically fluctuated significantly against many major world currencies, including the U.S. dollar. A depreciation of the peso would likely adversely affect the U.S. dollar or other currency equivalent amount of any dividends paid on our shares and could result in a decline in the value of our shares and ADRs as measured in U.S. dollars.
From 2011 to December 2015, Argentine companies were required to obtain prior approval from BCRA and Argentine tax authorities in order to engage in certain foreign exchange transactions. In September 2019 the Government reinstalled the above previous measures and since then has implemented additional exchange control restrictions. Thus, our shareholders’ ability to receive cash dividends in U.S. dollars was limited by the ability of the Depositary for our ADR program to convert cash dividends paid in pesos into U.S. dollars. Under the terms of our Deposit Agreement for the ADRs, to the extent that the Depositary can in its judgment, and in accordance with local exchange regulations, convert pesos (or any other foreign currency) into U.S. dollars on a reasonable basis and transfer the resulting U.S. dollars outside of Argentina, the Depositary will as promptly as practicable convert or cause to be converted all cash dividends received by it in pesos on the deposited securities into U.S. dollars. If in the judgment of the Depositary this conversion is not possible on a reasonable basis (or is not permitted by applicable Argentine laws, regulations and approval requirements), the Depositary may distribute the pesos received or in its discretion hold such currency uninvested without liability for interest thereon for the respective accounts of the owners entitled to receive the same. As a result, if the exchange rate fluctuates significantly during a time when the depositary cannot convert the foreign currency, you may lose some of the value of the dividend distribution.
In the event that the BCRA does not grant the applicable authorization, we reserve the right to agree with the Depositary the reasonable legal measures for the effective payment of dividends to ADR holders who reside outside of Argentina. As a result, such ADR holder may not timely receive the full dividend distribution or receive at all any such distribution.
Our principal shareholders exercise significant control over matters affecting us, and may have interests that differ from those of our other shareholders.
As of the date of this Annual Report, our controlling shareholder is CIESA , which holds 51% of our common stock. FGS holds 24.0% of our common stock. Local and foreign investors hold the remaining ownership of our common stock. CIESA is under co-control of Pampa Energía S.A. (“ Pampa Energía ”), which holds 50% of CIESA’s common stock, and Grupo Inversor Petroquímica S.L. (member of GIP Group, controlled by the Sielecki family; “ GIP ”), and PCT L.L.C. (“ PCT ”), which directly and indirectly through PEPCA S.A. (“ PEPCA ”) holds a 50% of the common stock of CIESA.
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We cannot assure you that the interests of our principal shareholders will not diverge from the interests of our other investors. See ” Item 7. Major Shareholders and Related Party Transactions. ”
Sales of a substantial number of shares could decrease the market prices of our shares and the ADRs.
CIESA holds 51% of our Class “A” shares. Pursuant to the Pliego de Bases y Condiciones para la Privatización de Gas del Estado S.E . (the “ Pliego ”), CIESA may not reduce its shareholding below 51% of our share capital without the competent authorities’ approval. The market prices of our common shares and ADRs could decline as a result of sales by our existing shareholders, such as the ANSES, or of any other significant shareholder of common shares or ADRs in the market, or the perception that these sales could occur.
Under Argentine law, shareholder rights may be fewer or less well defined than in other jurisdictions.
Our corporate affairs are governed by our Bylaws, the General Companies Act and Law No. 26,831, which differ from the legal principles that would apply if we were incorporated in a jurisdiction in the United States or in other jurisdictions outside Argentina. In addition, rules governing the Argentine securities markets are different and may be subject to different enforcement in Argentina than in other jurisdictions.
As a foreign private issuer we are exempt from certain rules that apply to domestic U.S. issuers.
We are subject to the informational requirements of the Exchange Act applicable to foreign private issuers. Under U.S. securities laws, as a foreign private issuer we are exempt from certain rules that apply to domestic U.S. issuers with equity securities registered under the Exchange Act.
For example, as a foreign private issuer, in the United States, we are not subject to the same disclosure requirements as a domestic U.S. registrant under the Exchange Act, including the requirements to prepare and issue quarterly reports on Form 10-Q or to file current reports on Form 8-K upon the occurrence of specified significant events, the proxy rules applicable to domestic U.S. registrants under Section 14 of the Exchange Act or the insider reporting and short-swing profit rules applicable to domestic U.S. registrants under Section 16 of the Exchange Act. In addition, we have relied, and intend to keep relying, on exemptions from certain U.S. rules which permit us to follow Argentinian legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants. As a result of the above, even though we are required to file reports on Form 6-K disclosing the information which we have made or are required to make public pursuant to Argentinian law, or are required to distribute to shareholders generally, and that is material to us, you may not receive information of the same type or amount that is required to be disclosed to shareholders of a U.S. company
We are also exempt from many of the corporate governance requirements of the New York Stock Exchange.
Changes in Argentine tax laws may adversely affect the tax treatment of our Class B Shares or ADSs.
Pursuant to Law No. 26,893, the sale, exchange or other transfer of shares and other securities is subject to capital gains tax at a rate of 15% when the purchaser and the seller are not Argentine residents. When both the purchaser and the seller of our Class B Shares or ADRs are non-residents, the purchaser is required to pay the capital gains tax in addition to the purchase price of the Class B Shares or ADSs. In addition, if the purchaser is legally liable for capital gains taxes in Argentina, then the purchaser will likely not be entitled to receive any tax credit in the United States in respect of the payment of any such taxes.
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On December 29, 2017, the Macri Administration enacted, through Decree No. 1112/2017, a tax reform (the “Tax Reform” ). The Tax Reform provides that only the results from sales, transfers or dispositions of shares, securities representing shares and certificates of deposit of shares that are carried out through stock exchanges or stock markets authorized by the CNV under conditions that guarantee the principle of price/time priority of the offers obtained by individuals and undivided estates resident in Argentina shall be exempted.
The foregoing exemption shall also be applicable to foreign beneficiaries to the extent that said beneficiaries do not reside in and the funds do not come from non-cooperative jurisdictions. Decree No. 279/2018 provides that until the decree of the Income Tax Law of Argentina regulates the definition of non-cooperative jurisdiction, the white-list established in Decree No. 589/2013 (dated 05/27/2013) will be applicable to determine if a jurisdiction is non-cooperative jurisdiction.
The Tax Reform also establishes an exemption for such foreign beneficiaries on the sale of share certificates issued outside of Argentina that represent shares issued by Argentine companies which have been granted with a public offering authorization by the CNV (i.e., ADRs). The exemptions will only apply if the foreign beneficiaries do not reside in and the funds do not arise from “non-cooperating” jurisdictions.
Pursuant to Decree No. 279/2018, if the foreign beneficiary resides in a non-cooperative jurisdiction or the funds come from a non-cooperative jurisdiction, the capital gains tax rate is 35%.
Whereas, previously, if the sale was carried out between non-Argentine residents the non-Argentine resident purchaser was responsible for paying the tax when the seller was a non-resident, currently it is the seller, through their legal representative domiciled in Argentina, who is responsible for paying the tax, except when the purchaser is a resident individual or legal entity. If the seller does not have a legal representative, the tax should be paid by the seller according to Decree No. 279/2018.
Further rulemaking or interpretation of the amended income tax law by the Argentine tax authority may adversely affect the tax treatment of our Class B Shares or ADSs.
Holders of ADRs may be unable to exercise voting rights with respect to our Class B Shares underlying the ADRs at our shareholders’ meetings.
We will treat the Depositary for all purposes as the shareholder with respect to the shares underlying the ADRs. As a holder of ADRs representing the ADRs being held by the Depositary in your name, you will not have direct shareholder rights and may exercise voting rights with respect to our Class B Shares represented by the ADRs only in accordance with the Deposit Agreement. There are no provisions under Argentine law or under our Bylaws that limit the exercise by ADR holders of their voting rights through the Depositary with respect to the underlying Class B Shares. However, there are practical limitations on the ability of ADR holders to exercise their voting rights due to the additional procedural steps involved in communicating with these holders. ADR holders may be unable to exercise voting rights with respect to our Class B Shares underlying the ADRs as a result of these practical limitations.
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Holders of ADRs may be unable to exercise preemptive, accretion or other rights with respect to the Class B shares underlying the ADSs.
Holders of ADSs may not be able to exercise the preemptive or accretion rights relating to the shares underlying the ADSs unless a registration statement under the Securities Act is effective with respect to those rights or an exemption from the registration requirements of the Securities Act is available. We are not obligated to file a registration statement with respect to the shares relating to these preemptive rights, and we cannot assure you that we will file any such registration statement. Unless we file a registration statement or an exemption from registration is available, holders may receive only the net proceeds from the sale of their preemptive rights by the depositary or, if the preemptive rights cannot be sold, they will be allowed to lapse. As a result, U.S. holders of Class B Shares or ADSs may suffer dilution of their interest in our company upon future capital increases.
In addition, under the General Companies Act, foreign companies that own shares in an Argentine corporation are required to register with the Superintendency of Corporations ( Inspección General de Justicia or the “ IGJ ”) in order to exercise certain shareholder rights. Voting rights in a Shareholder meeting can be exercised through duly instituted agents, as is regulated by Law No. 26,831. If you own our Class B Shares directly (rather than in the form of ADSs) and you are a non-Argentine company and you fail to register with the IGJ, your ability to exercise your rights as a holder of our Class B Shares may be limited.
The NYSE and/or BYMA may suspend trading and/or delist our ADSs and common shares, respectively, upon occurrence of certain events relating to our financial situation.
The NYSE and/or the BYMA may suspend and/or cancel the listing of our ADSs and common shares, respectively, in certain circumstances, including upon the occurrence of certain events relating to our financial situation.
The NYSE may in its sole discretion determine on an individual basis the suitability for continued listing of an issue in the light of all pertinent facts. Some of the factors mentioned in the NYSE Listed Company Manual, which may subject a company to suspension and delisting procedures, include: “unsatisfactory financial conditions and/or operating results,” “inability to meet current debt obligations or to adequately finance operations,” and “any other event or condition which may exist or occur that makes further dealings or listing of the securities on the NYSE inadvisable or unwarranted in the opinion of NYSE.”
We cannot assure you that the NYSE and/or BYMA will not commence any suspension or delisting procedures. A delisting or suspension of trading of our ADSs or common shares by the NYSE and/or BYMA, respectively, could adversely affect our results of operations and financial conditions and cause the market value of our ADSs and common shares to decline.
The price of our Class B Shares and the ADSs may fluctuate substantially, and your investment may decline in value.
The trading price of our Class B Shares is likely to be highly volatile and may be subject to wide fluctuations in response to factors, many of which are beyond our control. Such factors include:

•
fluctuations in our periodic operating results;

•
changes in financial estimates, recommendations or projections by securities analysts;
49

•
changes in conditions or trends in our industry;

•
events affecting equities markets in Argentina;

•
legal or regulatory measures affecting our financial conditions;

•
departures of management and key personnel; or

•
potential litigation or the adverse resolution of pending litigation against us or our subsidiaries.
The stock markets in general have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the companies involved. We cannot assure you that trading prices and valuations will be sustained. These broad market and industry factors may materially adversely affect the market price of our Class B Shares and the ADSs, regardless of our operating performance. Market fluctuations, as well as general political and economic conditions in Argentina, such as recession or currency exchange rate fluctuations, may also adversely affect the market price of our Class B Shares and the ADSs. In particular, currency fluctuations could impact the value of an investment in Argentina. Although our ADSs listed on the NYSE are U.S. dollar-denominated securities, they do not eliminate the currency risk associated with an investment in an Argentine company.
For example, due to various factors (including, but not limited to, the abrupt variation in the exchange rate in Argentina) prices of equity securities in Argentina have decreased substantially since 2018, which prompted investors to dispose of their investments in Argentina resulting in further downward pressure on the price of equity securities. Future sales of substantial amounts of our Class B Shares and ADSs, or the perception that such future sales may occur, may result in additional pressure on the price of our Class B Shares and ADSs. Also, future sales of treasury shares, may also have a negative impact on the price of our Class B Shares and ADSs.
Following periods of volatility in the market price of a company’s securities, that company may often be subject to securities class-action litigation. This kind of litigation may result in substantial costs and a diversion of management’s attention and resources, which would have a material adverse effect on our business, results of operations and financial condition.
The relative volatility and illiquidity of the Argentine securities markets may substantially limit the ability to sell the Class B Shares underlying the ADSs on the BYMA at the price and time desired by the shareholder.
Investing in securities that trade in emerging markets, such as Argentina, often involves greater risk than investing in securities of issuers in the United States, and such investments are generally considered to be more speculative in nature. The Argentine securities market is substantially smaller, less liquid and more concentrated and can be more volatile than major securities markets in the United States and is not as highly regulated or supervised as some of these other markets. There is also significantly greater concentration in the Argentine securities market than in major securities markets in the United States Accordingly, although shareholders are entitled to withdraw the Class B Shares underlying the ADSs from the depositary at any time, the ability to sell such shares on the BYMA at a price and time shareholders might want may be substantially limited.
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Item 4.
Our Information
A.
Our History and Development
General
Operations
We commenced commercial operations on December 28, 1992, as the largest company created in connection with the privatization of Gas del Estado S.E. (“ GdE ”), the Argentine state-owned natural gas company, the integrated operations of which included natural gas transportation and distribution. GdE was divided into ten companies: two transportation companies and eight distribution companies.
Our legal name is Transportadora de Gas del Sur S.A. We are a limited liability company ( sociedad anónima) , incorporated under the laws of Argentina on December 1, 1992. Our registered offices are located at Cecilia Grierson 355, 26th Floor, Buenos Aires (C1107CPG), Argentina, our telephone number is (54 11) 4371-5100 and our web address is www.tgs.com.ar . According with our public records, our length of life is set to expire on November 30, 2091 (which could be renewed, in accordance with the applicable law).
We are currently the largest transporter of natural gas in Argentina and operate the most extensive pipeline system in Latin America in terms of length, delivering approximately, as of December 31, 2024, more than 60% of the total natural gas transported in Argentina, through 5,746 miles of pipeline, of which we operate 4,768 miles on an exclusive basis pursuant to the License (the “ Natural Gas Transportation ”). Our 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 Fiscal Year 2024, approximately 84% of our 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. Our Natural Gas Transportation business is regulated by ENARGAS, and revenues from this business represented 36%, 22% and 25% of our total revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
We conduct our Natural Gas Transportation business pursuant to the License, which is scheduled to expire in December 2027, although it may be extended by the Executive Branch for an additional 10-year period; provided that certain technical conditions set forth in the License are met. Likewise, according to the Ley de Bases the aforementioned 10-year period was extended to 20 years. If ENARGAS determines that we are in substantial compliance with all our obligations arising under the Natural Gas Law No. 24,076 (the “ Natural Gas Law ”), related regulations and our License, the extension should be granted by the Executive Branch. ENARGAS would bear the burden of proving that we had not met the technical conditions referred to above and, therefore, that the extension of the License should not be granted. To the extent that we were found not to have satisfied the conditions described above or chose not to seek the extension of our License, we would be entitled to certain specified compensation.
On September 8, 2023, we submitted a request to ENARGAS to initiate the procedure detailed in Section 6 of the Natural Gas Law for the License extension. On June 13, 2024, ENARGAS issued the License Report indicating that we have broadly fulfilled our obligations regarding the License. The License Report allows the ENARGAS controller, after the non-binding public hearing, held on October 21, 2024, to issue its recommendation report to be submitted to the Executive Branch, which may finally issue the decree granting the required extension of the License. Following this submission of the ENARGAS recommendation, the Executive Branch may issue the decree granting the License extension within 120 days. This request will need to be reviewed and addressed by the governmental authorities. See “ —B. Business Overview—Natural Gas Transportation—Regulatory Framework— Certain Restrictions with Respect to Essential Assets” below.
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The License gives us the exclusive right to operate the existing southern Argentine natural gas transportation pipeline system. Our 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 map below illustrates the natural gas pipeline system in Argentina as of December 31, 2024:
graphic
For additional information regarding our property, plant and equipment, see “ D. Property, Plant and Equipment ” below.
We are also one of the largest processors of natural gas and one of the largest marketers of Liquids in Argentina. We operate 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 our pipeline system and stored for delivery. Due to its strategic location within the Argentine natural gas transportation system, our 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). Revenues from our Liquids Production and Commercialization business represented 46%, 59% and 63% of our total revenues during the years ended December 31, 2024, 2023 and 2022, respectively.
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We also provide midstream integral solutions related to natural gas production, from the wellhead up to the transportation systems. In addition, through our subsidiary Telcosur, we provide telecommunications services. Aggregate net revenues from our midstream and telecommunications business segment represented 18%, 20% and 12% of our total revenues during the years ended December 31, 2024, 2023 and 2022, respectively.
Within the framework of the agreements signed with the former Ministry of Energy, Mining and Hydrocarbons of the Province of Neuquén and Gas y Petróleo de Neuquén S.A. in April and November 2018, we timely completed the construction of a catchment and gathering pipeline and a natural gas conditioning plant in the Vaca Muerta field that will allow the gathering of non-conventional gas from the Neuquén Basin and its subsequent injection into the main gas pipeline systems, ensuring its supply to all of Argentina’s regions.
The Vaca Muerta system has two gathering pipes: the first has a length of 71 miles, a 36” diameter and a 35 MMm 3 /d transportation capacity (the “ Northern Section ”) and the second has a 22 miles extension, a 30” diameter and 25 MMm 3 /d transportation capacity (the “ Southern Section ”). The natural gas transported through this pipeline system is treated at a new conditioning plant that we built at Tratayén, Province of Neuquén with an initial capacity of 7.8 MMm 3 /d. This project consolidates our position as the first midstream services provider in the Vaca Muerta field and required an investment of approximately U.S.$260 million in the aggregate. On April 29, 2019, the assembly and pressurization work on the connection of the Vaca Muerta pipeline to Neuba II Gas Pipeline were completed, which led to revenues from the month of May 2019. On August 22, 2019, the SHR issued Resolution No. 491/2019, which declared this project as “critical” pursuant to Law No. 26,360. This allows us to obtain certain tax benefits from the investments in this project.
In March 2022, we executed an agreed minute with the Undersecretary of Energy, Mining and Hydrocarbons of the Province of Neuquén (Subsecretaría de Energía, Minería e Hidrocarburos de la Provincia del Neuquén) (the “Complementary Agreed Minute”) whereby the parties commit to granting us an extension of the transportation concession to build and operate the pipeline expanded North Tranche II, which will gather the off-spec natural gas production from several hydrocarbons fields located mainly in the Vaca Muerta formation (the “ Expanded North Tranche II ”). In August 2022, we began this work with an investment of approximately U.S.$ 48 million, this 20 miles long work will extend from the Los Toldos I Sur area to El Trapial (Vaca Muerta Norte). The pipeline has been operational since the end of July 2023.
In November 2024 and February 2025, we commissioned additional investments that allow us to expand our natural gas conditioning capacity and increase our role in the Vaca Muerta development, including the installation of two conditioning turbine expanders provided by Propak Systems Ltd (each a “Propak Plant”) to be operated in gas conditioning mode until we are able to develop a natural gas processing project in the Tratayén Plant. The Propak Plants may be converted to allow processing of natural gas in the future, and they increased our conditioning capacity by 6.6 MMm 3 /day for each Propak Plant. With the addition of the Propak Plants, our total gas conditioning capacity increased up to 28MMm 3 /d since February 2025. The total estimated investment for this expansion was U.S.$360 million.
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graphic
For more information regarding our investments in Vaca Muerta area s ee “Item 4. Our Information—B. Business Overview—Midstream—Midstream Services.”
Controlling shareholders
As of the date of this Annual Report, our controlling shareholder is CIESA, which holds 51% of our common stock. Other local and foreign investors hold the remaining shares of our common stock, including FGS, which holds 24% of our common stock. CIESA is under co-control of Pampa Energía which holds 50% of the common stock of CIESA, and GIP and PCT, which directly and indirectly through PEPCA hold 50% of the common stock of CIESA.
For additional information regarding CIESA’s current organizational structure, see “ Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders. ”
Capital expenditures
From January 1, 2022, through December 31, 2024, our aggregate capital expenditures, in Current Currency, amounted to Ps. 761,783 million. Such capital expenditures include Ps. 204,953 million related to natural gas transportation system, Ps. 41,078 million related to liquids production and commercialization activities and Ps. 515,752 million related to Midstream segment.
For the years 2024, 2023 and 2022, capital expenditures mostly include improvement to our gas transportation system and works performed for the construction and ramping-up of the Northern Section and Southern Section of the Vaca Muerta pipeline and the enhancement of Tratayén Plant and maintenance works of our natural gas pipeline system. Information relating to the size and financing of future investments is included in “ Item 5. Operating and Financial Review and Prospects.” “.
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Available documentation
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC and state the address of that site (http:// www.sec.gov). Our internet address is www.tgs.com.ar. This URL is intended to be an inactive textual reference only. It is not intended to be an active hyperlink to our website. The information included in our website or which may be accessed through our website is not part of this Annual Report, is not incorporated by reference herein or otherwise and should not be relied upon in determining whether to make an investment in any securities issued by us.
B.
Business Overview
NATURAL GAS TRANSPORTATION
As a transporter of natural gas, we receive natural gas owned by a shipper, usually a natural gas distributor, at one or more intake points on our pipeline system for transportation and delivery to the shipper at specified delivery points along the pipeline system. Under applicable law and our License, we are not permitted to buy or sell natural gas except for our own consumption and to operate the pipeline system. See “ —Regulatory Framework ” below for more information.
Our 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.
Natural gas transportation services accounted for 36%, 22% and 25% of our total revenues in the years ended December 31, 2024, 2023 and 2022, respectively. In 2024, 72.9% of our average daily natural gas deliveries were made under long-term firm transportation contracts. See “ —Customers and Marketing ” below. Natural gas firm transportation contracts are those under which capacity is reserved and paid for regardless of actual usage by the customer. Almost all of our natural gas firm contracted capacity is currently subscribed for at the maximum tariffs allowed by ENARGAS. During 2024, the amount of net revenues derived from natural gas firm transportation contracts was Ps. 369,712 million, representing 84% of the total revenues for the Natural Gas Transportation segment for such year. Substantially all of our 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. The Government has at times directed us to interrupt supply to certain customers and make deliveries to others without regard as to whether they have natural gas firm or interruptible contracts. See “ Regulatory Framework— Industry Structure” below for more information.
Expansions of the system . Since 2002, as a result of the pesification and freezing of natural gas public services tariffs, we lost the ability to invest in the expansion of our transportation system. This responsibility was transferred to fiduciary structures organized by the Argentine government and financed through tariff charges set at values higher than our frozen tariffs.
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, we 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.
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On July 9, 2021, the UT and ENARSA signed a restarting order and a restarting act of the works related to the Sunchales pipeline (the “ Sunchales Work ”), by means of which the work schedule was readjusted and ENARSA also assumed the commitment to manage and join efforts to guarantee the cash flow in order to avoid new impacts to the economic-financial structure of the contract of the Work, which would give rise to new requests - on the part of the UT - for the recomposition of the economic-financial equation of the contract and of the execution schedule of the Sunchales Work.
On February 7, 2022, the Secretary of Energy issued Resolution No. 67/2022 creating the “Transport.Ar Producción Nacional” Gas Pipeline System Program (the “ Transport.Ar Program ”) and declaring the construction of the GPM and complementary works as of public interest. The total investment would be roughly U.S.$3.4 billion, of which 75% were expected to be allocated to the construction of the pipeline.
Also, by means of Decree No. 76/2022 dated February 11, 2022, the concession of this gas pipeline was granted to ENARSA for a term of 35 years and the trust FONDESGAS (Fondo de Desarrollo Gasífero Argentino) was created, with Integración Energética Argentina S.A.(“IEASA”) as trustee and beneficiary, and BICE (Banco de Inversión y Comercio Exterior, a public bank) as trustee. ENARSA can designate a third-party to build, operate and maintain the facility.
The Transport.Ar program also included the construction of a gas pipeline between the towns of Mercedes and Cardales, the expansion of the final sections of the gas pipeline in the metropolitan area of Buenos Aires, the reversal of the northern gas pipeline, and the expansion of various sections of the Centro-Oeste gas pipeline, both operated by TGN.
On July 24, 2023, ENARSA completed the expansion works of the NEUBA II Gas Pipeline included in the Transport.ar plan, thus generating an additional transportation capacity of 7 MMm3/d to the Buenos Aires Metropolitan Area (AMBA).
By the end of August 2023, the first stage of the GPM, specifically the Tratayén-Salliqueló section, was authorized for operation. The complementary works, namely the Gasoducto Mercedes-Cardales, were authorized in the last week of November 2023, and the 29 km expansion on the final sections in our system was already enabled by late August 2023.
In October 2024, the installation of compressor plants was commissioned allowing the increase of the transportation capacity from its initial capacity of 11 MMm3/d to 21 MMm 3 /d,.
We are the technical operator of the GPM, including its two compressor plants, after ENARSA awarded us the operation and maintenance through a private tender on June 5, 2023, for a period of 5 years, extendable for up to an additional 12 months. We also serve as the technical operator of the Gasoducto Mercedes Cardales tranche, based on an agreement with a term of 5 years.
In June 2024, we submitted to the national government the Private Initiative on the GPM, along with a commitment to invest in the regulated system, totaling approximately US$ 700 million. This proposal was declared of public interest in December 2024 by Decree No. 1060/2024. As of the date of issuance of this Annual Report, the tender motivated by the Private Initiative for the award of the new transportation capacity resulting from the expansion work has not been launched, where we will have the option to match the best offer made by a third party to the Government.
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In the Private Initiative, we propose:
•  The expansion of the GPM transportation capacity by 14 MMm³/d, with an estimated investment of US$ 500 million, for which Dedicated Branch I was created in December 2024 to frame this project within the RIGI. The resulting transportation capacity expansion, as specified by Decree No. 54/2025, will be included within the framework of the GPM Transportation Concession granted to ENARSA, which, according to Decree PEN No. 76/2022, was made as provided in the Hydrocarbons Law No. 17.319.
To carry out this project, on November 4, 2024, our Board of Directors decided to establish the Dedicated Branch Transportadora de Gas del Sur S.A. – Dedicated Branch 1 (hereinafter “Dedicated Branch”), to apply for adherence to the RIGI.
•   Regardless of the outcome of the tender derived from the Private Initiative, we commit to making an investment in the regulated system that we currently operate in the Natural Gas Transportation segment to complement this initiative, through the construction of 20 km of pipeline loops and the installation of 15,000 HP of compression in the Neuba II pipeline, along with other works and tests to raise the maximum operating pressure with an additional estimated investment of around US$ 200 million, which will allow for an increase in transportation capacity in final sections by 12 MMm³/d.
The main objective of this work is to generate significant foreign exchange savings for Argentina by replacing diesel and LNG imports with Vaca Muerta gas during the winter period, ensuring domestic supply during the winter.
On March 31,2025 the Secretary of Energy issued Resolution No. 136/2025 which approves the GPM expansion guidelines tender proposed by us. ENARSA will oversee the upcoming bidding process.
Customers and Marketing
Our principal service area is the greater Buenos Aires region in central-eastern Argentina. We also serve the more rural provinces of western and southern Argentina. As of December 31, 2024, our service area contains 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 our 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, 66% 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 our pipeline system.
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The table below contains certain information for the year ended December 31, 2024, as it relates to the distribution companies that are connected to our pipeline system:
Company
Annual
deliveries (MMm3)
Volume of market
served (in %)
No. of end users
(in millions)
Deliveries received from us (in %)
Metrogas (1)
6.0
20
2.4
79
Camuzzi Pampeana (1)
5.5
19
1.4
98
Camuzzi Sur
4.7
16
0.8
100
Naturgy Argentina (1)
3.3
11
1.7
69
66
6.3

(1)
Also connected to the TGN system.
Source : ENARGAS
The firm average contracted capacity for our four largest distribution customers, Pampa Energía and for all other customers, as a group, as of December 31, 2024, 2023 and 2022, together with the corresponding net revenues derived from natural gas firm transportation services during such years and the net revenues derived from interruptible services during such years are set forth below:
For the years ended December 31,
2024
2023
2022
Average
firm contracted capacity (MM3/d)
Net
revenues (millions of pesos)
Average firm contracted capacity (MM3/d)
Net
revenues (millions of pesos)
Average firm contracted capacity (MM3/d)
Net revenues (millions of pesos)
Metrogas
16.7
113,619
16.7
52,956
16.7
70,226
Camuzzi Pampeana
15.6
84,338
15.5
39,351
15.8
52,003
Naturgy Argentina
11.8
68,778
11.8
32,039
11.8
42,628
Camuzzi Sur
10.8
20,457
10.8
9,772
11.0
12,320
Pampa Energía
3.7
17,087
3.2
7,536
3.2
9,978
Others
24.9
136,847
25.1
74,046
24.5
88,462
Total
83.5
441,126
83.1
215,700
83.0
275,617
We play a leading role in the natural gas industry in Argentina and satisfy 76 direct customers and 6.3 million indirect customers for the year ended December 31, 2024.
As of December 31, 2024, the total contracted firm or “take or pay” capacity by costumers was 89.4 MMm3/d with a weighted average life of approximately 10 years. The increase of 7MMm3/d of the contracted capacity corresponds to the recent authorization of the extension of the final sections contracted by ENARSA.
The total injection of natural gas in August 2024, the highest level of the year, was 143 MMm3/d, 10 MMm3/d higher than the record of August 2023 (the highest level of that year).
The average daily injection of natural gas into the pipeline system we operated amounted to 83.4 MMm3/d in 2024, 10.1% more than in 2023. The indicated injection is composed of contributions from the Austral Basin, the San Jorge Gulf Basin, the Neuquén Basin, and the contributions from the GPM upon its entry into the regulated transportation system in Salliqueló, averaging 11.7 MMm³/d. In 2024, the contribution from the Neuquén Basin was 17.5% higher compared to the previous year, mainly due to the increased gas evacuation capacity from the Vaca Muerta formation enabled by the GPM.
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graphic
Pipeline Operations
Pipeline Deliveries . The following table sets forth our average daily natural gas firm and interruptible transportation deliveries for 2024, 2023 and 2022:
For the year ended December 31,
2024
2023
2022
Firm:
Average daily
deliveries (MMm3/d)
Average daily
deliveries (MMm3/d)
Average daily
deliveries (MMm3/d)
Metrogas
11.4
10.9
12.9
Camuzzi Pampeana
9.6
10.5
10.8
Camuzzi Sur
7.3
7.4
7.1
Naturgy Argentina
7.1
6.5
6.7
Others
15.6
14.5
15.6
Subtotal firm
50.9
49.8
53.1
Subtotal interruptible
18.8
17.0
15.5
Total
69.7
66.8
68.6
Average annual load factor (1)
83
%
80
%
83
%
Average winter heating season load factor (1)
84
%
90
%
85
%

(1)
Average daily deliveries for the period divided by average daily firm contracted capacity for the period, expressed as a percentage.
Natural gas daily average injection to the pipeline system operated by us amounted to 83.4 MMm3/d in 2024, 10.1% higher than 2023.
The injection consists of contributions from the Austral Basin, the San Jorge Gulf Basin, the Neuquén Basin, and the GPM as it enters the regulated transportation system in Salliqueló, with the latter averaging 11.7 MMm³/d. In 2024, the contribution from the Neuquén Basin increased by 17.5% compared to the previous year, primarily due to the enhanced gas evacuation capacity from the Vaca Muerta formation, made possible by the GPM. Conversely, the country’s southern basins reduced their injection levels due to the natural decline of their fields and the increased availability of gas and transportation capacity from the Neuquén Basin, which provided alternative supply options for the system’s shippers. Regarding the Austral Basin, its injection potential increased by approximately 2.5 MMm³/d following the commissioning of the Fénix Project.
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The chart below shows the main operating data for the natural gas transportation segment.
graphic
Natural Gas Transportation System Improvements . In 2024, 2023 and 2022, we made capital expenditures aimed at the enhancement of our natural gas transportation system’s safety and reliability in the aggregate amount of Ps. 204,952 million. We operate our 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 U.S. federal regulations. Based on the pipeline inspection reports we have received to date and the current operation of the pipeline system, we do not foresee any significant safety risks. In order to identify changes in the safety regulations that our pipeline system has to comply with, we conduct inspections for the purpose of detecting increases in the population density in the areas through which our pipeline system extends. Changes in population densities may require us to increase safety measures in certain sections of the system.
The “greater” Buenos Aires area comprises the City of Buenos Aires and its surrounding area. One end of our natural gas transportation system (the “ Buenos Aires Ring ”) is located in the greater Buenos Aires area, where we transfer natural gas for further delivery to major natural gas distribution companies.
System Improvements. In 2024, 2023 and 2022, our pipeline system satisfactorily met the demands generated by the winter season and the requirements of ENARGAS. To that effect, we carried out several maintenances, prevention and inspection works.
Integrity assessment tasks have been carried out, including internal inspections along 907 km and direct assessments using CIS and DCVG techniques (for sections without Scraper Traps) over 192 km of gas pipelines. These efforts were undertaken to identify, assess, and manage integrity threats such as external corrosion, geometric defects, manufacturing and/or construction anomalies, coating failures, among others.
Regarding the recoating program, in 2024, the replacement of pipeline coating was executed over 6 km. Additionally, recoating works are being carried out at three valve station facilities along the San Martín gas pipeline in the province of Buenos Aires.
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Furthermore, these works have incorporated non-destructive testing techniques such as magnetic particle inspection, ultrasound, and hardness measurement to detect anomalies in longitudinal seams and corrosion (SCC). This approach has enabled the identification of anomalies that were mitigated through pipe replacements. These recoating works aim to reduce the risk of damage mechanisms caused by external corrosion and/or SCC, as well as to detect and mitigate any anomalies in the pipeline that could grow over time and disrupt service. This, in turn, extends the operational lifespan of the facilities.
In line with these efforts and to mitigate corrosive activity, a casing pipe filling project was carried out to ensure pipeline integrity in densely populated areas.
As part of the SCC assessment and mitigation plan, an internal inspection program using EMAT technology was conducted to detect cracks, covering 155 km of gas pipeline in 2024.
Based on the analysis and planning carried out by the asset integrity team, an evaluation campaign was conducted on 186 defects, including external corrosion, geometric defects, and anomalies in longitudinal and circumferential seams. Immediate repairs were required, resulting in three pipeline replacements and five welding reinforcements.
Additionally, the integrity of 20 pipeline branches located within the Buenos Aires province gas pipeline network was assessed.
Regarding the cathodic protection system, to mitigate corrosion progression and enhance system reliability, efforts continued to strengthen the system through the installation of five new units, 16 current disperser reinforcements, and the renewal of 12 obsolete installations. Anode batteries were also installed at two high-voltage power line crossings.
Moreover, in 2024, adjustments to the cathodic protection system were made at compressor plants, including the installation of two disperser reinforcements and special protection level studies at four compressor plants.
Additionally, a survey of potential levels and bathymetry was conducted on the two submarine gas pipeline sections operated by TGS. This survey, performed every three years, is crucial for assessing cathodic protection levels and determining whether the pipelines’ positioning has been affected by marine currents. The study was also extended to four pipeline segments crossing various rivers.
All the aforementioned projects, which enable the comprehensive assessment of facility conditions and the necessary adjustments to maintain service continuity, reaffirm our commitment to safety and the protection of people and the environment—key aspects of our dedication to providing a reliable public natural gas transportation service.
Regarding the Buenos Aires Ring gas pipeline, located in a densely populated area, efforts to mitigate third-party damage risks continued. This includes expanding the fiber optic-based intrusion detection system along an additional 24.5 km of pipeline in the Las Heras - Cañuelas area.
Additionally, to reinforce public awareness, we enhanced signage at facilities and carried out virtual and remote damage prevention initiatives in sensitive areas of the system. These initiatives included radio broadcasts, media and social media campaigns for the general public, as well as meetings with municipalities and companies involved in earthmoving and utility services in Buenos Aires, Neuquén, and Río Negro.
One of the key highlights in the operation of the transportation system was the commissioning of the Tratayén and Salliqueló Compressor Plants, which are part of the GPM. This led to a reconfiguration of operational planning due to the possibility of injecting up to 21 MMm³/d in the final sections of the TGS transportation system. Additionally, the Mercedes Compressor Plant, the head station of the Mercedes–Cardales Gas Pipeline, was commissioned, enabling increased gas delivery volumes to TGN.
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Regarding system technological upgrades, the Saturno and Olavarría Compressor Plants were integrated into the CABA Operations Center, marking the initial steps in the development of the new remote operation philosophy for the transportation system.
At the Belisle Compressor Plant, the Detailed Engineering and Factory Acceptance Test (FAT) for the Plant Control System panel were completed, with installation scheduled for 2025. This development will enable the integration of the plant into the CABA Operations Center.
At the Gaviotas Compressor Plant, Extended Basic Engineering was developed for the modernization of the plant control system and power generation system, with implementation planned for 2025 and 2026.
Regarding turbo compressor control systems, the upgrade of Turbo Compressor Unit No. 2 (Solar Mars) at the Cervantes Compressor Plant was completed, and progress was made on the upgrade of Turbo Compressor Unit No. 2 (Hispano Suiza 1203) at the Bosque Petrificado Compressor Plant, which is expected to be completed in the first quarter of 2025.
Furthermore, the procurement and supply of control panels for the three turbo compressor units at the Gaviotas Compressor Plant were completed. These panels will be installed between 2025 and 2026 as part of the broader modernization efforts for the plant control system and power generation system mentioned earlier.
Regarding the upgrade of turbo compressor vibration monitoring systems, the equipment at the Belisle, Indio Rico, Saturno, Manantiales Behr, and Ordoqui Compressor Plants was updated and integrated into the centralized Bently Nevada monitoring system.
In terms of operational safety at compressor facilities, all necessary materials were acquired, and progress was made on upgrading the Fire & Gas detection and alarm systems at the Belisle, Bajo del Gualicho, and Dolavon Compressor Plants, with commissioning scheduled for the first quarter of 2025. Similarly, Extended Basic Engineering is being developed for the modernization of the systems at the Saturno, Chelforó, and La Adela Compressor Plants, due to the obsolescence of existing systems and the need to ensure their reliability under the remote operation philosophy of the transportation system.
From an environmental standpoint, the installation of biodigester systems at the Belisle, Cervantes, and Fortín Uno Compressor Plants was completed to enhance the existing wastewater treatment systems. Similarly, materials were procured for the execution of similar projects at the remaining compressor plants in 2025 and 2026.
Additionally, under the TGS Emissions Reduction Plan, a campaign was conducted in 2024 to detect and quantify fugitive natural gas emissions at 20 compressor plants. The objective was to prioritize needs and develop an appropriate plan for repairing and eliminating these leaks.
Works at Liquids Facilities
During 2024, we conducted the tasks associated with the major maintenance and life extension plan for pressure vessels and pipelines at the Cerri Complex were carried out, enhancing reliability, reducing operational risks, and ensuring compliance with government requirements. These tasks included various equipment inspections, the execution of corrective and preventive maintenance at our facilities, modifications to the control room of the Cryogenic Plant, and other necessary adjustments to eliminate bottlenecks in the fractionation trains. Additionally, the inspection and maintenance of the venting system and associated equipment were performed.
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Furthermore, maintenance activities were conducted at the refrigeration plant in Puerto Galván, including both preventive and corrective maintenance on equipment and pipelines.
Focusing on continuous and safe facility management, Spheres 8 and 10 at the Galván Plant were certified, along with the separators of the vapor compression system and the decantation tanks. The V1 tank was upgraded, and new pumps for compressor oil cooling were installed, increasing the reliability of the refrigeration system at the Cryogenic Plant.
Investments were made to mitigate the risk of technological obsolescence and enhance the operational safety of our processes. The following developments stand out: installation of a new electrical distribution transformer at the Galván Plant, a new Safety Instrumented System for boilers and cryogenic operations, new medium-voltage switchgear at the Cryogenic Plant, and the upgrade of the excitation control system for the generators.
Works at Vaca Muerta facilities
Making headway with the expansion of the Tratayén plant —process developed through projects required to increase our Midstream services offer. The expansion process of the Tratayén Plant is being developed through projects aimed at increasing Midstream service capacity. In 2024, a major milestone was achieved in the expansion of the Tratayén Conditioning Plant, with the commissioning of the first “Propak” gas conditioning module in October 2024. This module, which can be converted in the future for processing the captured natural gas, allows for an increase of 6.6 MMm³/d in capacity. The second Propak module was commissioned in the February of 2025, which increase the plant’s total capacity to 28 MMm³/d.
Focusing on the growth of the Vaca Muerta system, in 2024, work continued on the necessary infrastructure to incorporate additional auxiliary services, such as a new gasoline stabilization plant (the third at this facility), the expansion of natural gas intake and output facilities, new offices and dormitories, and the construction of a gasoline pipeline. This pipeline will enable the dispatch of the gasoline produced, in response to the increased daily production, while minimizing truck traffic.
Regarding the Vaca Muerta pipeline, progress was made on works to mitigate hydrological risks. These efforts were carried out from PK 0, located at the Tratayén Conditioning Plant, to PK 115, in the Los Toldos I Sur area. Additionally, in VMS, work was executed from PK 0, in the Aguada Pichana Este area, to PK 32, in Bandurria Sur.
Throughout 2024, efforts were focused on developing applications for the Vaca Muerta System – Tratayén Dispatch software. The development of maintenance and scheduling modules was completed, with user testing conducted and functionalities deployed into production mode. Work will continue on the allocation, billing, reporting manager, and auditor mode modules, with the goal of integrating all processes into this platform. Additionally, due to the growth in operations, investments were made to address emergency response needs.
Furthermore, tgs participated in several projects for third parties, enabling various installations such as the connections of Pampa Energía, Pluspetrol, and Vista to the Vaca Muerta System.
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Technical Assistance Services Agreement . As part of its bid to purchase a 70% interest in us from the Government, CIESA was required to have an investor-company with experience in natural gas transmission that would serve as our technical operator. In late 1992, we entered into a Technical Assistance Agreement with PEPCA (the “ Technical Assistance Agreement ”), an indirect, majority-owned subsidiary of Enron Corp. (“ Enron ”). The term of the Technical Assistance Agreement was for eight years from December 28, 1992, renewable automatically upon expiration for an additional eight-year term and was assigned to Petrobras Argentina S.A. (“ Petrobras Argentina ”) as part of a master settlement agreement. Since July 2004, Petrobras Argentina was our technical operator and was in charge of providing assistance related to, among others, the operation and maintenance of the natural gas transportation system and related facilities and equipment in order to ensure that the performance of the system is in conformity with international natural gas transportation industry standards and in compliance with certain Argentine environmental standards.
On July 27, 2016, Petrobras Argentina was acquired by Pampa Energía. For further information, see “ Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders. ”
With the prior approval of ENARGAS and our Board of Directors, in December 2017, we and Pampa Energía agreed to a technical, financial and operational assistance service agreement (the “SATFO” ) for a three-year term. The SATFO substantially contains the same terms as the Technical Assistance Agreement, as amended. However, the scope of the contract was extended to include a greater number of services that Pampa Energía must render us. Any amendment, assignment or even termination of the SATFO has to be authorized by ENARGAS. Pursuant to the SATFO, the currency for the technical assistance fee paid to Pampa Energía is U.S. dollars. Our Audit Committee analyzed the SATFO and concluded that its price is on market terms.
The SATFO sets out the services to be provided by Pampa Energía to us, at the request of our Chief Executive Officer. Between December 2017 and October 2019, we received from Pampa Energía technical, financial and operational assistance and we paid a monthly fee for such services in amounts equal to the greater of (i) U.S.$3 million and (ii) an amount equal to 7% of the difference between our net income before interests and income taxes of the most recently ended twelve-month period and U.S.$3 million.
The services provided by Pampa Energía to us under the SATFO include assisting us in the following matters to the extent that they arise in the ordinary course of business: (i) replacement, repair and renovation of facilities and equipment to ensure that the performance of the system is in accordance with international gas transportation industry standards; (ii) preparation of performance evaluations, operating cost analysis, construction assessments and advice related to budget control; (iii) advice regarding safety, reliability and efficiency of system operation and gas industry services; (iv) advice regarding compliance with applicable laws and regulations relating to safety and industrial hygiene, pollution and environmental protection of the system; (v) routine and preventive maintenance of the system; (vi) staff training; (vii) design and implementation of the necessary procedures to provide with the aforementioned services; (viii) financial and insurance advice; (ix) advice on operational improvements such as risk analysis, generation and commercialization of electric energy, operative management of the “midstream,” human resources management, and legal and supply management; (x) advice on non-regulated businesses such as midstream, electric, petrochemical, processing, and construction, among others; and (xi) design and implementation of all major aspects of natural gas transportation and liquids production, as well as administrative information and control system to adequately inform our management group.
Our Board of Directors, at its meeting held on September 17, 2019, approved a proposal for Pampa Energía, as technical operator of the SATFO, for a significant reduction in the compensation it receives under the SATFO. The general and special shareholders meeting held on October 17, 2019, ratified such proposal. The Audit Committee also expressed its favorable opinion to such proposal, as required by the Capital Markets Law, because Pampa Energía is our related party.
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According to such amendment, we extended the term of the SATFO until December 27, 2024 (automatically renewable for three more years) and replaced the provisions relating to the calculation of the fee payable to Pampa Energía. Pursuant to the amended SATFO, the monthly fee payable to Pampa Energía shall be equal to the greater of: (i) U.S.$0.5 million or (ii) the variable compensation that arises from applying to comprehensive income before results and income taxes for the year but after deducting also the above fixed amount) the following scheme:
From 12/28/2019 to 12/27/2020: 6.5%
From 12/28/2020 to 12/27/2021: 6%
From 12/28/2021 to 12/27/2022: 5.5%
From 12/28/2022 to 12/27/2023: 5%
From 12/28/2023 to 12/27/2024 and onwards: 4.5%.
For the year ended December 31, 2024, we recorded a charge of Ps. 26,406 million for services rendered by Pampa Energía pursuant to the amended SATFO.
The Argentine Natural Gas Industry
Historical Background . Prior to the privatization of GdE, the Argentine natural gas industry was effectively controlled by the Government.
In 1992, the Natural Gas Law was passed providing for the privatization of GdE. The Natural Gas Law and the related decrees provided for, among other things, the transfer of substantially all of the assets of GdE to two natural gas transportation companies and eight distribution companies. Currently there are nine authorized companies to distribute natural gas in Argentina. The ninth concession was added in 1998 and covers the Mesopotamian provinces, Formosa, Chaco, Entre Rios and Misiones which previously had no network for natural gas service. The license for the Mesopotamian region was awarded to GasNea S.A. The transportation assets were divided into two systems on a broadly geographical basis, the northern and southern trunk pipeline systems, designed to give both systems access to natural gas sources and to main centers of demand, including the greater Buenos Aires area. As a result of the division, our natural gas transportation system is connected to the two natural gas distribution systems serving the greater Buenos Aires area, one serving Buenos Aires Province (excluding the greater Buenos Aires area and the northeast of this province) and one serving southern Argentina. TGN is connected to five distribution systems serving northern Argentina. TGN is also connected to the natural gas distribution systems serving the greater Buenos Aires area and, to a limited extent, the natural gas distribution system serving Buenos Aires Province (excluding the greater Buenos Aires area). In the two instances where we are directly connected to a natural gas distribution system with TGN, we are the principal supplier of natural gas transportation services.
The Natural Gas Law and the related decrees granted each privatized natural gas transportation company a license to operate the transferred assets, established a regulatory framework for the privatized industry based on open, non-discriminatory access, and created ENARGAS to regulate the transportation, distribution, marketing and storage of natural gas. The Natural Gas Law also provided for the regulation of wellhead gas prices in Argentina for an interim period. Prior to deregulation, the regulated price was set at U.S.$0.97 per million British thermal units (“ MMBtu ”) at the wellhead, which had been the regulated price since 1991. Pursuant to Presidential Decree No. 2,731/93, gas prices at the wellhead were deregulated as of January 1, 1994 and, from that date until the year 2002, the average price of gas increased.
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In spite of the devaluation of the peso in 2002, increases in wellhead natural gas prices were limited until 2004. From May 2004 until August 2005, wellhead gas prices increased in a range from 105% to 180% (depending on the gas basins) for power plants, industries and large businesses. These adjustments were complemented by lower increases in the price of natural gas for CNG vehicles.
By means of Decree No. 892/2020, dated November 13, 2020, the Government implemented the Plan Gas.Ar and extended it through Decree No. 730/2022 until 2028. The purpose of such plan is to encourage investments in natural gas exploration and production through the implementation of prices and incentives. The plan also implements a direct contracting mechanism between (i) natural gas producers and distributors and sub-distributors (to satisfy priority demand) and (ii) Compañía Administradora del Mercado Mayorista Eléctrico S.A. (“CAMMESA”). Such contracting will be made taking the Point of Entry to the transportation system (“PIST” after its acronym in Spanish) as a reference, a tender procedure carried out by the SE.
According to the Plan Gas.Ar, the Argentine government may assume on a monthly basis payment of a portion of the price of natural gas in the PIST, in order to mitigate the impact of the cost of natural gas to be transferred to end users.
The Secretary of Energy is tasked with implementing the plan. The Secretary is assigned the power to implement a plan with maximum volume, terms and price references for natural gas, applicable to supply agreements between suppliers and demanding agents to be executed within the framework of the plan, and that ensure the free formation and transparency of prices in accordance with Law No. 24.076.
On December 3, 2020 the first auction was held within the framework of the Plan Gas.Ar by means of which the government promoted to have a base of 70 MMm3/d, corresponding to the Neuquén Basin 47.2 MMm3/d, to the Austral Basin 20 MMm3/d and to the Northeast Basin 2.8 MMm3/d, plus additional volumes in winter. Producers in the Neuquén Basin offered 49.35 MMm3/d. From the Austral Basin, bids totaled 18.5 MMm3/d. In other words, in total, the initiative achieved a commitment of 67.8 MMm3/d, just below the target.
On February 22, 2021, pursuant to Resolution No. 129/2021, the Secretary of Energy called for a new bidding within the framework of the Plan Gas.Ar to supply with domestic natural gas production the highest demands of the winter period. Companies submitted their bids for a volume of up to 4.5 MMm3. The weighted price of round two for the winter of 2021 was 4.731 U.S.$/MMbtu. For the winters of 2022, 2023 and 2024 the volume bid was 3.36 MMm3/day at a weighted average price of 4.73 U.S.$/MMbtu.
In mid-October 2021 the third round of the Plan Gas.Ar was called through Res. 984/21. In it, the purchase of 3 million m3/day of gas from the Neuquén Basin, 1.5 million m3/day from the South of the country and 1 million m3/day from the Northwest was tendered for the years 2022 to 2024 inclusive, with injection starting next winter 2022.
There were only offers from the Neuquén Basin. The natural gas production of the Neuquén Basin represented approximately 60% of the total production of natural gas in Argentina during 2021.
Through Res. No. 770/2022, on November 11, 2022, the Secretary of Energy called for an auction for the extension of the commitments assumed by the awardees in the Neuquén Basin in Rounds 1 and 3, as well as the award of the following incremental volumes in the Neuquén Basin. At the same time, through the above mentioned resolution the Secretary of Energy also called for an auction for:
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1) The extension of the commitments assumed by those awarded in the provinces of Chubut and Santa Cruz within the framework of the procedures carried out in Round I (Round 5.1).
2) The presentation of Incremental Gas projects in the Austral and Northwest basins, under the figure of Incremental Activity Plan according to the definition of Decree No. 892/2020, replaced by Decree No. 730/2022, with the purpose of obtaining additional volumes of natural gas to reinforce the injections of the transportation system in those points where there is available capacity (Round 5.2).
Under this round, an incremental gas project was received from CGC to increase production in the Austral basin, in its Santa Cruz and Santa Cruz Norte areas (San Jorge Gulf) with a net contribution to the system of more than 2 MMm3/d for next winter and of approximately 2.60 MMm3/d for 2024 at an average price of U.S.$ 7.40 per MMBTU.
The companies that were awarded in Rounds 4 and 5 of the Plan Gas Ar were: YPF, Shell, Pampa Energía, PAE, CGC, Pluspetrol, Tecpetrol, Total, Exxon Mobil, Petrobras, Vista and Wintershall Dea. It is important to highlight that bid were received for more than 45 MMm3/d for the filling of the President Néstor Kirchner Gas Pipeline, more than double the capacity expected to be available in early 2024. In addition, offers were obtained to cover the winter peak at a price close to U.S.$ 5/MMBTU.
As the economic activity recovered in 2021, the oil and NGL prices have also started to increase. In addition, the invasion of Ukraine by Russia significantly increased oil prices which continue to be very volatile.
On October 29, 2021, the Secretary of Energy issued Resolution No. 1,036/2021 establishing the guidelines for an energy transition plan 2030. This plan contemplates a series of measures aimed at reducing CO2 emissions, efficient energy consumption and a plan for the promotion of gasification actions in the country, which contemplates making the necessary investments to bring gas to the points of consumption.
On February 9, 2022, through Resolution 67 the Government created the Transport.Ar Program which intends to solve the infrastructure deficit. Resolution 67:

•
Declares the construction of the GPM to be of National Public Interest as a strategic project for the development of natural gas in the Argentine Republic (which will transport natural gas starting from the Province of Neuquén, crossing the Provinces of Río Negro, La Pampa, Buenos Aires, up to the Province of Santa Fe), as well as its complementary works, and the construction of the works for the expansion and strengthening of the National Natural Gas Transportation System.

•
Creates the Transport.Ar Producción Nacional with the purpose of promote de development and growth of natural gas production and supply, optimizing the transportation system, increasing natural gas exports, promoting regional integration, among others.

•
The Secretary of Energy shall conduct this program, in order to guarantee the development of natural gas in the market, in accordance with the objectives set forth in Resolution 67/2022 and with the provisions of Decree No. 892/2020 (Plan Gas.Ar) and Resolution No. 1. 036/2021 of the Secretary of Energy.
Also, through Decree No. 76/2022 of February 11, 2022, the concession of this gas pipeline was granted to IEASA for a term of 35 years and the trust FONDESGAS (Fondo de Desarrollo Gasífero Argentino) was created, with IEASA as trustee and beneficiary, and Banco de Inversión y Comercio Exterior (“BICE”) as trustee.
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Initially, the project, executed by ENARSA, consisted in two stages: the first stage connects the town of Tratayén, Province of Neuquén, with the city of Salliqueló, Province of Buenos Aires, and the second stage would connect the city of Salliqueló with the city of San Jerónimo, Province of Santa Fe.
By the end of August 2023, the Stage I of the GPM, specifically the Tratayén-Salliqueló section, was authorized for operation, executed by ENARSA. The complementary works, namely the Gasoducto Mercedes-Cardales, were authorized in the last week of November 2023, and the 29 km expansion on the final sections of tgs was already enabled by late August 2023.

In addition, in October 2024, the installation of compressor plants to increase the transport capacity of the initial section of the GPM from 11 MMm3/d to 21 MMm3/d, was completed.
We are the technical operator of the GPM, including its two compressor plants, after ENARSA awarded it the operation and maintenance through a private tender on June 5, 2023, for a period of 5 years, extendable for up to an additional 12 months. we also serve as the technical operator of the Mercedes Cardales pipeline, based on an agreement with a term of 5 years.
The construction of the GPM and its complementary works is of vital importance for the Argentine energy development and will imply both fiscal benefits and foreign currency savings for Argentina.
The rapid decline of the Bolivian gas fields required a quick response from Argentina to move forward with the reversion of the northern gas pipeline. This work of vital importance for the energy development of Argentina and Vaca Muerta consists of the reversion of the natural gas flow which will take gas from Vaca Muerta to the industries of Córdoba, Tucumán, La Rioja, Catamarca, Santiago del Estero, Salta and Jujuy. It also allows the connection of homes to natural gas networks and the development at scale of new industrial activities, especially lithium mining. In addition, the reversion will have a complementary impact on the cost of electricity generation and natural gas for the region’s industries. It will also make exports to northern Chile, central Brazil and Bolivia viable and will result in an increase in the supply of natural gas in Argentina.
In November 2024, the Argentine government inaugurated the works of the Tío Pujio-La Carlota Federal Integration Pipeline, which connects the Central Pipeline with the Northern Pipeline, forming part of the Northern Reversal. The reversal works will be completed with the automation of four existing compressor plants, which will be carried out in the first half of 2025. Additionally, the 22-kilometer pipeline, which is one of the sections of the new La Carlota – Tío Pujio pipeline, will be complemented by the laying of two parallel loops to the Northern Pipeline, extending 62 kilometers.
On December 16, 2023, Decree No. 55/2023 was issued, declaring a state of emergency in the national energy sector until December 31, 2024. Among other provisions, this decree intervenes in ENARGAS from January 1, 2024, and instructs the Ministry of Energy to issue the necessary rules and procedures for the establishment of market prices for the public service of natural gas transportation. Decree No. 1023/2024 stipulates that the implementation of the tariff schedules resulting from the tariff review initiated pursuant to Decree No. 55/23 shall not exceed July 9, 2025.
As it has been explained before, on June 19, 2024, we submitted an investment proposal to the Ministry of Economy under a private initiative framework to increase the available volume of natural gas in the northeast area of Argentina by the winter of 2026 (the “Private Initiative” ). It seeks to replace natural gas and liquid imports each winter by using existing infrastructure. The goal is to achieve the lowest cost for end users and generate savings for the Government. If approved by the Government, a bidding process will be initiated, where we will have the option to match the best offer made by a third party to the Government.
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Natural Gas Demand . Natural gas consumption in Argentina has played a significant role in the energy industry in recent years, reaching more than 52% of total national energy consumption, which is greater than the comparable percentage for worldwide energy consumption.
Natural gas consumption during 2024 was 137 MMm3/d, registering a 1.9% increase in natural gas consumption compared to the previous year (2.5 MMm3/d), primarily explained by an increase in the consumption of thermal power plants due to greater availability of natural gas for power plants and, to a lesser extent, by a slight increase in priority demand due to lower temperatures recorded during the winter months (May, July, and August) and higher export volumes.
The graphic below illustrates the breakdown of natural gas consumption in Argentina in 2024 and 2023 by type of consumer:

graphic
Source: ENARGAS
Beginning in 2003, a sharp increase in natural gas demand occurred as a consequence of: (i) the recovery of certain industries in the Argentine economy in 2003, (ii) the 2002 devaluation of the peso as well as the transportation and distribution tariffs and the elimination of both tariff and wellhead gas price adjustments, making this fuel relatively inexpensive for consumers as compared to other types of fuel, the prices of which are affected by inflation, (iii) the growth of GDP between 2003 and 2013 and (iv) the energy policy that seeks to be one of the main producers of natural gas that allows not only to replace the import of natural gas but also to generate the necessary resources for its export. As a result, natural gas became, by far, the cheapest fuel in Argentina and high rates of substitution of natural gas for other fuels in industry, power plants and vehicles have been observed. Likewise, the rising demand for gas has also been based on the recovery of many industrial segments of the Argentine economy, and the lack of availability of natural gas to meet current demand represents a challenge for continued industrial growth at the rates achieved in recent years.
The demand for natural gas in Argentina is highly seasonal, with natural gas consumption peaks in winter. The source of seasonal changes in demand is primarily residential consumers. In order to bridge the gap between supply and demand, especially with respect to peak-day winter demand, the Government has entered into several natural gas import agreements.
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The most important agreement was signed with the Bolivian government in June 2006 and amended in May 2010 and July 2012. The agreement provides for the import of natural gas from Bolivia to Argentina to be managed by IEASA to deal with the decrease in domestic natural gas production and in an effort to maintain supplies at similar levels to the previous years. During 2022, the sixth addendum to the Bolivian import contract came into force, which modifies the price formula and, due to the decline in Bolivian fields, reduces supply volumes. The seventh addendum to the gas import contract between ENARSA and YPFB (Yacimientos Petrolíferos Fiscales Bolivianos) was signed on December 30, 2022, and includes a reduction in the volume of natural gas that will be received. In October 2023, this contract was modified and as of July 31, 2024, Bolivia will no longer supply Argentina with firm natural gas.
During the winter of 2024, average temperatures were colder (13.3°C) compared to the same period in 2023 (14.2°C), which explains a slight increase in priority demand (residential + SMEs) compared to the previous year, with a total increase of 0.7 MMm³/d throughout the year, accompanied by an annual growth in the number of residential users of 0.6% (November 2024 vs. November 2023), totaling 8.9 million users.
Thanks to the incentive scheme proposed by the Plan Gas.Ar and the increase in transportation capacity with the commissioning of the Tratayén – Salliqueló pipeline in 2023, production levels have increased, continuing this trend throughout 2024. This greater availability of local natural gas allows for sustained exports, mainly to Chile through the Gas Andes pipeline, even during the winter months, taking advantage of the fact that the shipment of these volumes would not restrict supply in the domestic market given the current design of the transportation infrastructure.
In 2024, electricity demand fell by 0.5% compared to the previous year, while total electricity generation increased by the same percentage (+0.7 TWh). The increase in local generation is mainly explained by an increase in renewable energies (+2.8 TWh), contributing 16.1% of the total generation (142.1 TWh) to the system. Additionally, there was higher nuclear generation (+1.5 TWh) mainly due to the greater contribution of the Atucha II nuclear power plant and higher thermal generation (+2.4 TWh). The increase in generation from these technologies was offset by a lower hydroelectric contribution (-5.9 TWh).
The following graph shows the monthly consumption in 2024 in MMm 3 /d for each of the demand sectors, compared to the total demand in 2023 (in red line).
graphic
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Natural gas demand during 2024 remained above the levels recorded in the previous year. The differences in the composition of this consumption are mainly due to lower temperatures recorded in the winter months, primarily in May, and to a lesser extent in July and August. Additionally, the greater availability of natural gas and more moderate temperatures allowed for higher consumption by power plants in September, October, and November. The months with lower consumption compared to the previous year were January and June. The sectors with lower consumption during 2024, linked to the decline in economic activity, were industry and CNG. In the case of industry, from September onwards, it was able to recover and increase the consumption levels of 2023. In the case of CNG, the values remained on average 0.4 MMm³/d below the previous period throughout the year.
Gas Supply . There are 24 known sedimentary basins in the country, 12 of which are located entirely onshore, six of which are combined onshore/offshore and eight of which are entirely offshore. Production is concentrated in five basins: Norwest in northern Argentina, Neuquén and Cuyo in central Argentina, and San Jorge Gulf and Austral in southern Argentina. In 2024, 70% of the natural gas transported by our system originated in the Neuquén Basin with the remainder coming primarily from the Austral basin and the re-gasifying LGN tanker located in Bahía Blanca. Our pipeline system is connected to the Neuquina, Austral and San Jorge Gulf basin. We are not connected to the Cuyo or Northwest basin.
The graph below shows the evolution of gross natural gas production by basin from 2014 to 2024 in MMm 3 /d:
graphic
Source: Secretary of Energy
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Set forth in the table below is the location of the principal natural gas producing basins by province, their proved natural gas reserves, reserve life and production as of the most recent years for which information is available:
Basin
Location by
province
Proved Gas
Reserves (MMm3) (1)(2)
Production (MMm3)
Reserve Life (years) (3)
2023
2022
2024
2023
2023
Neuquina
Neuquén, Río Negro, La Pampa, Mendoza (South)
367,867
317,748
36,694
33,344
11.0
Austral
Tierra del Fuego, Santa Cruz (South), and offshore
77,513
78,877
8,851
9,293
8.3
San Jorge Gulf
Chubut, Santa Cruz (North)
32,527
33,401
3,900
4,116
7.9
Cuyo
Mendoza (North)
146
75
47
52
2.8
Northwest
Salta, Jujuy, Formosa
9,598
7,267
1,237
1,304
7.4
Total
487,651
437,368
50,729
48,109
7.5


(1)
Estimated as of December 31, 2023 and 2022, respectively. There are numerous uncertainties inherent in estimating quantities of proved natural gas reserves. The accuracy of any reserve estimate is a function of the quality of available data, and engineering and geological interpretation and judgment. Results of drilling, testing and production after the date of the estimate may require substantial upward or downward revisions. Accordingly, the reserve estimates could be materially different from the quantity of natural gas that ultimately will be recovered.

(2)
Reserve figures do not include significant reserves located in certain Bolivian basins to which TGN is connected.

(3)
Weighted average reserve life for all basins, at the 2023 production levels, respectively.

Source : Secretary of Energy.
Given the marked seasonality of natural gas demand in Argentina, with consumption peaks in the winter months, where the residential sector is mainly the source of such fluctuations in demand, Argentina’s domestic natural gas production together with the natural gas import contract from Bolivia satisfies consumption during the warmer months (October through April), but production is insufficient to meet demand needs during the colder months (May to September), requiring Argentina to import additional volumes of natural gas from pipelines interconnecting it with neighboring countries (mainly Bolivia and occasionally Chile) and imports through LGN regasification vessels.
In 2024, total natural gas production increased 5.1% over the previous year, from 131.9 MMm3/d to 138.6 MMm3/d.
In 2024, YPF continued to be the main producer in Argentina with a 24% market share (2% lower than 2023), followed by Total Austral S.A. with a 22% market share. The graph below shows the market share of the main natural gas operators in Argentina in terms of production for 2024.
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graphic
Source: Secretary of Energy
The ninth addendum to the gas import contract (initiated in 2006) between Energía Argentina (ENARSA) and YPFB (Yacimientos Petrolíferos Fiscales Bolivianos) was signed on June 16, 2024, and extends the delivery of natural gas volumes for the months of August and September. It was agreed, along with the completion of shipments, to import 4 MMm³/d given the importance for Argentina to supply the Northwestern provinces until the Northern Pipeline Reversal project is completed. In November, small volumes of gas were again imported from Bolivia on an interruptible basis.
The supply from Bolivia averaged 3.2 MMm³/d, 3.0 MMm³/d less than the volume recorded in 2023. On the other hand, the import of LNG by sea, regasified and injected into the national natural gas transportation system at the Escobar port located in the Province of Buenos Aires, averaged 4.3 MMm³/d in 2024, 2.5 MMm³/d below the LNG contribution recorded in 2023 at both terminals (Escobar and Bahía Blanca). Additionally, ENARSA agreed with the Chilean state company Enap to import volumes of natural gas from the LNG regasification terminal in Mejillones, Chile, which is brought into Argentina through the NorAndino pipeline, with the aim of supplying the northern region of the country.
The Neuquén Basin has the largest total natural gas injection, while the remaining basins continue with their natural decline (including Bolivia), which made the construction of a third trunk pipeline imperative to evacuate the incremental gas associated with the development of reserves in the Neuquén Basin.
In recent years, there have been no requests from potential parties interested in contracting additional capacity, mainly due to the lack of gas and the gradual declines of conventional fields, especially from the reception areas of Tierra del Fuego, Santa Cruz and Chubut. This situation was not the same with respect to the Neuquén Basin where the natural gas from the unconventional fields of Vaca Muerta, as from the Plan Gas.Ar, has boosted production in that region, completing the transportation capacity from that basin, making necessary and essential the expansion of the gas pipeline system that allows exploiting the energy potential available in Vaca Muerta.
Thus, by the end of August 2023 the first stage of the GPM (Tratayén- Salliqueló section), which was executed by ENARSA, was enabled. Its complementary works, namely, the Mercedes - Cardales gas pipeline was enabled in the last week of November 2023 and the extension of 29 km over the final sections of our pipeline was already enabled by the end of August 2023. In October 2024, the installation of the compressor plants that raise the transport capacity of this first section to 21MMm3/d was concluded.
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graphic
The Vaca Muerta formation, located in the Neuquén Basin, is considered one of the most prominent shale plays globally, and has already become the largest commercial shale development outside of North America. The development of the Vaca Muerta formation plays an important role in the Argentine economy, and therefore the national and provincial governments have introduced changes to the regulatory framework for exploration and production of unconventional hydrocarbons, in order to attract investments.
Since 2018, when we first set foot in Vaca Muerta, tgs’s strategy has focused on being a leading company in the provision of integrated services and a key player in the energy development of Argentina and the region. Our conditioning plant in Tratayén is a groundbreaking project that contributes to this energy growth.
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Distribution of the Vaca Muerta Formation in the Basin and our infrastructure
graphic
Source: Internal information
Vaca Muerta is in a relatively early stage of its development compared to shale plays in the United States and Canada. The Permian Basin is a good analogue for Vaca Muerta, with similar geological characteristics and a long history of unconventional hydrocarbon development.
According to the Argentina gas and power market outlook of June 2022, prepared by the consulting firm Wood Mackenzie, the Neuquén Basin, hand in hand with Vaca Muerta, has a really significant development potential. The development scenarios depend on the assumptions considered in relation to the production stimulus programs such as the Plan Gas.Ar, as well as the existence of demand and projected transportation infrastructure. Based on these scenarios, the natural gas production projection for the Neuquén Basin by 2040 could reach levels in the order of 150 million cubic meters per day for the base case or in the order of 200 million cubic meters per day for the higher development case, which assumes a faster development of transportation infrastructure (pipelines) and access to export markets.
Neuquén Basin . The largest natural gas basin and the major source of natural gas supply for our system is the Neuquén Basin, located in west central Argentina. Since the discovery of Vaca Muerta formation, this basin is the most prolific basins of the country accounting approximately 72% of natural gas production in the country.
Since then, the development of non-conventional gas in the Province of Neuquén has played a leading role in the increase in production of natural gas.
During 2024, natural gas production in the Neuquén Basin increased by 10% with respect to 2023, while natural gas production in the remaining Basins declined.
During 2024, natural gas production in Vaca Muerta contributed 50% of the natural gas production in Argentina with an average of 70 MMm³/d and a year-on-year increase of 20%. In this case, the four most important operators are YPF, Tecpetrol S.A. (“Tecpetrol”), Total Energies (as defined below), and Pan American Energy S.L. Fortín de Piedra, operated by Tecpetrol, was consolidated as the largest unconventional gas field in Argentina.
The TGN system also accesses the Neuquén Basin. Of the transported natural gas coming from the Neuquén Basin, approximately 65% was transported by us and approximately 35% by TGN for the year ended December 31, 2024.
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Undoubtedly, the biggest challenge in this Basin, given the potential of Vaca Muerta, is to develop the appropriate infrastructure for the transportation of natural gas. In this sense, in 2018 we have carried forward the construction of the Vaca Muerta Norte and Sur gas pipeline and the Tratayén conditioning plant with its subsequent expansions. In this sense, the beginning of the GPM works is particularly important. For additional information see, “The Argentine Natural Gas Industry” above.
Austral and San Jorge Basins . Natural gas provided by these basins, located in the southern region of Argentina, was transported mainly by us (Camuzzi Gas del Sur S.A. also transports natural gas through regional pipelines). In the Austral basin, exploration has centered in and around the basin’s existing natural gas fields and on other fields located offshore. The San Jorge basin is primarily an oil-producing basin.
Under the framework enacted by the Government to promote investments after the issuance of Decree No. 929/2013, in 2014, a joint operation was formed by Wintershall Energía S.A., Total Austral S.A. and Pan American Energy LLC Sucursal Argentina for the investment of U.S.$1,000 million in off-shore gas fields (Vega Pleyade) located in the Tierra del Fuego region.
The governments of the provinces on which these basins are located, together with the Government, have taken several measures to develop nonconventional gas and off-shore sites. During May 2019, the Government granted exploration rights to 13 companies over three off-shore basins.
In addition, ENAP Sipetrol Argentina S.A., YPF and IEASA signed an agreement to explore and develop offshore fields in the continental shelf of Argentina, and on September 5, 2019, SHR issued Resolutions No. 524 and 525, which granted an eight-year exploration permit on off-shore areas to Shell Argentina S.A. and QP Oil and Gas S.A.U.
In 2022, Total Austral announced the investment of U.S.$ 700 million in Tierra del Fuego for offshore development (Fenix Project). The project involves the installation of an offshore platform and the construction of 22 miles of subsea pipelines to connect to Vega Pléyade, whose production is in decline. Expected production from the field is approximately 10 MMm3/d. This volume would represent about 8% of the country’s production. The project began to be operational in September 2024.
The map below illustrates the distribution of the gas basins in Argentina:

graphic

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Regulatory Framework
Industry Structure . The legal framework for the transportation and distribution of natural gas in Argentina is comprised by the Natural Gas Law, Decree No. 1,738/92, other regulatory decrees (primarily Decree No. 2255/92, which includes the Basic Rules for Transportation Licenses and Regulations of the Transportation Services), the Pliego, the transfer agreements and the licenses of the newly privatized companies. The Hydrocarbons Law of Argentina regulates the midstream natural gas industry, under a competitive and partially deregulated system. The Public Emergency Law and related laws and regulations, which are no longer in effect, significantly altered the regulatory regime under which we operated since 2002. Notwithstanding this, in December 2019 the national congress passed the Solidarity Law that introduced certain modifications to the RTI concluded in March 2018 with the issuance of Decree No. 250/2018 by the Executive Branch. See “ Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business. ”
Natural gas transportation and distribution companies operate in an “open access,” non-discriminatory environment under which producers and certain third parties, including distributors, are entitled to equal and open access to the transportation pipelines and distribution system in accordance with the Natural Gas Law, applicable regulations and the licenses of the privatized companies. In addition, a regime of concessions under the Hydrocarbons Law of Argentina is available to holders of exploitation concessions to transport their own natural gas production.
The Natural Gas Law prohibits natural gas transportation companies (TGN and us) from also being merchants in natural gas. In addition, (i) natural gas producers, storage companies, distributors, and consumers who contract directly with producers may not own a controlling interest (as defined in the Natural Gas Law) in a transportation company; (ii) natural gas producers, storage companies and transporters may not own a controlling interest in a distribution company; and (iii) merchants in natural gas may not own a controlling interest in a transportation or distribution company.
Contracts between affiliated companies engaged in different stages in the natural gas industry must be approved by ENARGAS, which may reject these contracts if it determines that they were not entered into on an arm’s-length basis.
ENARGAS, which was established by the Natural Gas Law, is an autonomous entity responsible for enforcing the provisions of the Natural Gas Law, the applicable regulations and the licenses of the privatized companies. Under the provisions of the Natural Gas Law, ENARGAS is required to be governed by a board of directors composed of five full-time directors appointed by the Executive Branch subject to confirmation by the Argentine Congress. However, from 2004 to 2007, ENARGAS was governed by three directors who were not confirmed by the Argentine Congress, and, since 2007 until January 2018, ENARGAS has been administered by an intervention inspector appointed by the Executive Branch. On January 31, 2018, the Executive Branch appointed a President for ENARGAS for a five-year term, thereby concluding the intervention period.  However, the Solidarity Law established a new intervention of ENARGAS. Thus, from March 17, 2020, to December 31, 2023, ENARGAS underwent intervention. On December 16, 2023, Decree No. 55/2023 was issued, declaring a state of emergency in the national energy sector until December 31, 2024. Among other provisions, this decree intervenes in ENARGAS from January 1, 2024, and instructs the Ministry of Energy to issue the necessary rules and procedures for the establishment of market prices for the public service of natural gas transportation. Decree No. 1023/2024 extends the state of emergency until July 9, 2025.
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ENARGAS has broad authority to regulate the operations of the transportation and distribution companies and has its own budget, which must be included in the Argentine national budget and submitted to the Argentine Congress for approval. ENARGAS is funded primarily by annual control and inspection fees that are levied on regulated entities in an amount equal to the approved budget allocated proportionately to each regulated entity based on its respective gross regulated revenues, excluding natural gas purchase and transportation costs in the case of distribution companies.
Since 2004, the Government adopted a series of measures to redistribute the effects of the crisis in the energy sector caused by the natural gas shortage. Most of the electrical power stations do not have firm gas supply agreements and have increasingly used imported natural gas or alternative fuels that are more expensive than natural gas produced in Argentina. For this reason, ENARGAS and the Federal Energy Bureau (currently, the SHR) have issued a series of regulations aimed at averting a crisis in the internal system of natural gas supply.
The Executive Branch issued Decree No. 181/04, directing the Federal Energy Bureau to establish a system of priority pursuant to which power stations and natural gas distribution companies (for their residential clients) could receive natural gas in priority to other users, even those with firm transportation and firm gas supply contracts. On April 21, 2004, MPFIPyS issued Resolution No. 208/04 that ratified an agreement between the Federal Energy Bureau and natural gas producers to give effect to this new system.
Under certain circumstances and pursuant to the terms of our License, when ENARGAS asks us to restrict the provision of natural gas to clients who hold firm transportation contracts, we are exposed to potential claims from, among others, our customers. Therefore, we have requested that in connection with these new procedures, ENARGAS submit to us written instructions for any such natural gas firm transportation service interruption request. However, in case ENARGAS does not submit such instruction in the way required by our petition and we do not comply with ENARGAS’s instructions, if any, in order to avoid future claims from our customers, Resolution No. 208/04 will require us to pay the price difference between natural gas and the alternative fuel used by power stations in order to offset the loss resulting from our failure to comply with the instructions.
On June 26, 2018, ENARGAS issued Resolution No. 124/2018 which sets modifications to the Dispatch Centers Internal Regulations that establishes the procedures for natural gas dispatch management, modifying the guidelines for the Dispatch Administration attached to the Transport and Distribution Service Regulations and allow full operability of free access with no discrimination and competitive environment, and alternatives which guarantee the quality and continuity of gas transport and distribution public service,  avoiding the cyclical crisis which may affect the transport and distribution systems, seeking to maintain clients supply, by preventing service interruptions with an efficient management methodology.
Although the natural gas supply shortage did not create a bottleneck in the transportation capacity that prevented the system from meeting increasing demand since 2008, the Government continues to impose restrictions from time to time on the consumption of natural gas by certain customers that hold firm transportation contracts with us, in an effort to redirect and target the supply to the demand regarded as top priority, mainly residential users, CNG stations and industries connected to the distribution network.  Such restrictions have affected direct shippers who have firm transportation contracts with us, as well as industries in different distribution areas of the country.
As of the date of this Annual Report, our compliance has not resulted in legal action initiated by any of our firm transportation clients which could have a significant adverse economic and financial effect on us. However, any legal action, if brought, could have a significant adverse economic and financial effect on us.  See “ Item 3. Key Information—D. Risk Factors. ”
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Our License . Our License authorizes us to provide the public service of natural gas transportation through the exclusive utilization of the southern natural gas transportation system. Our License does not grant us an exclusive right to transport natural gas in a specified geographical area, and licenses may be granted to others for the provision of gas transportation services in the same geographical area. TGN’s natural gas transportation system is operated under a license containing substantially similar terms to those described below and elsewhere herein.
Our License has been granted by the Executive Branch by Decree No. 2451/92 for an original period of 35 years, beginning on December 28, 1992. However, the Natural Gas Law provides that we may request ENARGAS to renew its License for an additional period of ten years. ENARGAS must then evaluate the performance of tgs and raise a recommendation to the Executive Branch. At the end of the period of validity of the License, 35 or 45 years, as the case may be, the Natural Gas Law requires that a new tender be called for the granting of the license. As long as we have substantially complied with our obligations under the License, we have the option to match any offer made by a third party to the Executive Branch.
In September 2023, we submitted a request to ENARGAS for a 10-year extension of the natural gas transportation License, which is set to expire in December 2027. On June 13, 2024, ENARGAS issued a technical and legal report indicating that we have broadly fulfilled our obligations regarding the License (the “License Report”). Based on the License Report and after a non-binding public hearing as required by Section 6 of the Natural Gas Law, the ENARGAS controller may submit a recommendation to the Executive Branch, which, in turn, may issue a decree granting the 10-year extension of the License within 120 days from the date of the recommendation. This report allows the ENARGAS intervener, after the non-binding public hearing held on October 21, 2024, to issue their recommendation report to be presented to the National Executive Power, which could ultimately issue the decree granting the requested License extension. Following the presentation of ENARGAS’s recommendation, the Executive Power may issue the decree granting the License extension within 120 business days.
Our License also places certain other rights and obligations on us relating to the services we provide, including:

•
operating and safety standards;

•
terms of service, including general service conditions, such as specifications regarding the quality of gas transported, major equipment requirements, invoicing and payment procedures, imbalances and penalties, and guidelines for dispatch management;

•
contract requirements, including the basis for the provision of service, e.g., “firm” or “interruptible”;

•
certain mandatory capital investments that must have been made within the first five years of the license term; and

•
applicable rates based on the type of transportation service and the area serviced.
Our License establishes a system of penalties in the event of a breach of our obligations thereunder, including warnings, fines and revocation of our License. These penalties may be assessed by ENARGAS based, among other considerations, upon the severity of the breach or its effect on the public interest. Through Resolution No. 22/2018, ENARGAS adjusted the amounts of fines applicable in the event of a breach of obligations, which amount shall be updated on April of every year. On May 7, 2019, through Resolution No. 251/2019, ENARGAS updated the amounts of the fines up to Ps.21.1 million.
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Revocation of our License may only be declared by the Executive Branch upon the recommendation of ENARGAS. Our License specifies several grounds for revocation, including the following:

•
repeated failure to comply with the obligations of our License and failure to remedy a significant breach of an obligation in accordance with specified procedures;

•
total or partial interruption of the service for reasons attributable to us, affecting completely or partially transportation capacity during the periods stipulated in our License;

•
sale, assignment or transfer of our essential assets or otherwise encumbering such assets without ENARGAS’s prior authorization, unless such encumbrances serve to finance expansions and improvements to the gas pipeline system;

•
bankruptcy, dissolution or liquidation; and

•
ceasing and abandoning the provision of the licensed service, attempting to assign or unilaterally transfer our License in full or in part without the prior authorization of ENARGAS, or giving up our License, other than in the cases permitted therein.
Our License also prohibits us from assuming debt of, or granting credit to, CIESA, and creating security interests in favor of, or granting any other benefit to, creditors of CIESA.
Generally, our License may not be amended without our consent. As part of the renegotiation of our License under the Public Emergency Law, however, the terms of our License may be changed or our License may be revoked. In addition, ENARGAS may alter the terms of service annexed to our License. If any such alteration were to have an economic effect on us, ENARGAS should modify our rates to compensate for such effect or we could request a change in the applicable rates.
Regulation of Transportation Rates—Actual Rates . The natural gas transportation rates established for each transportation company must be calculated in U.S. dollars and converted into pesos at the time of billing. However, the Public Emergency Law eliminated tariff indexing covenants based on U.S. dollar exchange rate fluctuations and established a conversion rate of one peso equal to one U.S. dollar for tariffs.
The rate for natural gas firm transportation services consists of a capacity reservation charge and is expressed as a maximum monthly charge based on the cubic meters per day of reserved transportation capacity. The rate for natural gas interruptible transportation service, which is expressed as a minimum (from which no discounts are permitted) and a maximum rate per cubic meter of natural gas transported, is equivalent to the unit rate of the reservation charge for the firm service based on a load factor of 100%. For both firm and interruptible transportation services, customers are obligated to provide a natural gas in-kind allowance, expressed as a maximum percentage of gas received, equivalent to the natural gas consumed or lost in rendering the transportation service. The rates for all services reflect the rate zone(s) traversed from the point of receipt to the point of delivery.
No tariff increases have been received between May 1, 2019 and February 28, 2022. On February 1, 2022, ENARGAS provided us with a proposal for a Transitional Renegotiation Agreement (the “2022 Transition Agreement”), which was approved by our Board of Directors on February 2, 2022 and by the different governmental agencies on February 18, 2022. Such agreement was ratified by the PEN through Decree No. 91/2022, effective as of February 23, 2022, which provides a transitional tariff increase of 60% as of March 1, 2022 (the “RTT 2022”).
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On February 25, 2022, Resolution No. 60/2022 of ENARGAS put into effect as from March 1, 2022 the new tariff charts that contemplate the RTT 2022.
On March 16, 2023, our Board of Directors approved the proposed addendum to the renegotiation transitory agreement (the “2023 Transition Agreement” ) sent by ENARGAS. The 2023 Transition Agreement was ratified by the Executive Branch through Decree No. 250/2023 on April 29, 2023. Previously, on April 27, 2023, ENARGAS issued Resolution No. 186/2023, through which the new applicable tariff schedules were published.
In addition to the tariffs above, we are entitled to a CAU (Access and Use Charge). Since its inception in 2005, the CAU was increased, by 73.2% on May 1, 2015, and by 200.1% on April 1, 2016, by ENARGAS. We received an additional 50% and 19.7% increase in the CAU on April 1, 2018, and October 1, 2018, respectively. In 2024, we recognized revenues of Ps. 15,569 million as a result of the CAU. The first installment of the tariff increase granted by Resolution 4362 did not include any adjustment of the CAU. The 2024 Transition Agreement increase 95% on the Access and Use Charge. Given the permanent increase of operational and maintenance costs throughout the years, which might exceed the amount of the CAU, we filed a claim against the Government to obtain the adjustment of the values and ensure a fair compensation for the service it renders. Resolution 112 increased the CAU by 675% as of April 3, 2024. See “ Item 4. Our Information—B. Business Overview—Natural Gas Transportation—Pipeline Operations—Pipeline Expansions .”
Tariff situation.
Background and Renegotiation Process
On January 6, 2002, the Argentine Congress enacted the Public Emergency Law, which introduced dramatic changes to Argentina’s economic model, empowering the Government to implement, among other things, additional monetary, financial and foreign exchange measures to overcome the economic crisis in the short-term and bringing to an end the regime established pursuant to the Argentine Convertibility Act, including the fixed parity of the U.S. dollar and the peso. Among others, the Public Emergency Law granted the Executive Branch the power to conduct a renegotiation of public utility contracts and the tariffs set therein. The Public Emergency Law expired on December 31, 2017.
Between July 2003 and March 2018, the Company received a series of temporary tariff increases, all within the framework of the Comprehensive Tariff Review (“RTI”) process initiated after the enactment of the Public Emergency Law.
On February 16, 2016, the Executive Branch issued Decree No. 367/2016 which repealed the previous regulations governing the renegotiation process of contracts and licenses for public works and services and transferring to each ministry the responsibility to renegotiate public service contracts. Decree No. 367/2016 also conditioned the finalization of the new tariff scheme provided in the respective integral renegotiation agreement approved by the Executive Branch to completion of the RTI and provided that transitional adjustment of prices and tariffs are necessary to ensure the continuity of the normal provision of services.
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Under the framework of the agreement signed in February 2016 (the “2016 Transitional Agreement” ), on March 31, 2016, ENARGAS issued Resolution 3724, which approved revised tariffs as of April 1, 2016, including the CAU, for the Natural Gas Transportation business segment, providing for a 200.1% increase. Additionally, among other things, Resolution 3724 required us to not distribute dividends without the prior authorization of ENARGAS after reviewing our compliance with the transitional mandatory investment plan included in the 2016 Transitional Agreement (the “2016 Investment Plan” ). As of the date of this Annual Report, the 2016 Investment Plan is fully executed and has been approved by ENARGAS.
As several legal proceedings were initiated against Resolution 3724 in order to obtain the annulment of the increase of the PIST and the tariff increases for the natural gas transportation and distribution licensees approved by ENARGAS, we were not able to bill the 200.1% increase in full. On August 18, 2016, the Supreme Court order issued its final decision mandating the Government to (i) implement mandatory public hearings prior to the establishment of natural gas transportation and distribution tariffs, (ii) implement mandatory public hearings prior to the establishment of the point-of-injection gas price and (iii) declare the invalidity of Resolutions 28 and 31 with respect to residential users, for whom tariffs had to be returned to tariff rates effective as of March 31, 2016.
On August 19, 2016, ENARGAS issued Resolution No. 3953/2016, which implemented the decisions arising out of a public hearing before the Supreme Court. For additional information regarding the public hearing’s agenda, see “—Natural Gas Transportation—The Argentine Natural Gas Industry.”
As a result of this public hearing, since October 7, 2016, we were able to collect the revised tariffs at the levels provided for in Resolution 3724, allowing us to complete in full our 2016 Investment Plan.
Resolution 74 Tariff Increases
On March 30, 2017, we entered into the Integral Renegotiation Agreement (the “ 2017 Integral Agreement ”) and the related agreement signed on March 30, 2017 between tgs and the Government (the “2017 Transitional Agreement”). On the same day and consistent with the 2017 Transitional Agreement, the Ministry of Energy enacted Resolution 74, which increased the price of the natural gas consumed by power plants starting on April 1, 2017 and ENARGAS issued Resolution 4362 by which a new transitional tariff schedule applicable to us determined a total tariff increase of 214.2% and 37%, on the tariff of the natural gas transportation service and the CAU, respectively. Pursuant to Resolution 4362, we were required to execute the Five-Year Plan . In addition, Resolution 4362 contemplates a non-automatic semiannual adjustment mechanism for the natural gas transportation tariff and the CAU to reflect changes in WPI, which must be approved by ENARGAS evaluating the evolution of the economic circumstances.
However, Resolution 74 provided for a limitation on the full effectiveness of the tariff increase arising from the RTI process until the approvals of the 2017 Integral Agreement were completed. This meant that the tariff increase was granted in three stages on April 1, 2017 (granted 64.2% increase in natural gas transportation and no increase in CAU), December 1, 2017  (granted 80.8% increase on natural gas transportation and 29,7% increase in CAU) and April 1, 2018 (granted 50% increase in natural gas transportation and CAU). This staged increase is structured to provide the same economic benefits to us as if the increases had been fully effective since April 1, 2018.
On March 27, 2018, through Decree 250, the Executive Branch ratified the 2017 Integral Agreement, following the approval of several governmental authorities, including the Argentine Congress. Decree 250 concluded the RTI process and terminated the 2017 Transitional Agreement, representing the final renegotiation of our License with the Government after 17 years of negotiations. As a result of the foregoing, (i) we were entitled to the final tariff increase contemplated in Resolution 4362, and (ii) we and our current and former shareholders withdrew any claim against the Government related to our business resulting from the Public Emergency Law on June 26, 2018.
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On June 21, 2019, SHR issued Resolution 336, through which the payment of 22% of the bills issued from July 1, 2019, to October 31, 2019, to residential customers of natural gas was deferred. Such deferral will be recovered through the bills issued from December 1, 2019, in five consecutive monthly installments. It is expected that the Government will compensate licensors for such deferral. On August 22, 2019, SHR issued Resolution No. 488/2019 ( “Resolution 488” ), which established the procedure to calculate the deferral provided by Resolution 336. Furthermore, Resolution 488 instructs the implementation of a procedure to calculate and pay the compensation for licensors.
Semiannual Adjustment of Tariffs . Under our License, we may be permitted to adjust tariffs semiannually to reflect changes in PPI and every five years in accordance with efficiency and investment factors to be determined by ENARGAS and, subject to ENARGAS’s approval, from time to time to reflect cost variations resulting from changes in the tax regulations (other than income tax) applicable to us, and for objective, justifiable and non-recurring circumstances.
The Natural Gas Law requires that in formulating the rules that apply to the setting of future tariffs, ENARGAS must provide the transportation companies with (i) an opportunity to collect revenues sufficient to recover all future proper operating costs reasonably applicable to service, as well as future taxes and depreciation, and (ii) a reasonable rate of return, determined in relation to the rate of return of businesses having comparable risk and taking into account the degree of efficiency achieved and the performance of the company in providing the service. No assurances can be given that the rules to be promulgated by ENARGAS will result in rates that will enable us to achieve specific levels of earnings in the future.
However, since January 1, 2000, adjustments to tariffs to reflect PPI variations were suspended, first through an agreement with the Executive Branch and later by a court decision arising from a lawsuit to determine the legality of tariff adjustments through indexes.
Resolution 4362 provided for a semiannual adjustment mechanism based on changes in the WPI. The increase is not automatic, however, as it requires the prior approval of ENARGAS.
Within the renegotiation process, transitory adjustments of tariffs and/or their segmentation may be foreseen, as the case may be. Likewise, it must carry out the relevant and appropriate public hearing, public consultation and citizen participation regimes, as well as give intervention to the Procuración del Tesoro de la Nación and to the Sindicatura General de la Nación. Finally, the resulting agreement must have the corresponding governmental approvals. The renegotiation process culminates with the subscription of a final agreement on the RTI. In this sense, from this resolution, successive increases were approved under various agreements between the Company and ENERGAS, which, in certain cases, resulted in the initiation of legal actions by tgs.
On December 6, 2022, by means of Decree No. 815/2022, the term for the completion of the RTI established in Decree 1020 was extended for a period of 1 year as from its expiration, i.e. until December 18, 2023. It also extends, as from January 1, 2023, the intervention of ENARGAS, which is instructed, while the renegotiation continues, to carry out the necessary measures to achieve a transitional tariff adjustment in accordance with Decree 1020.
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Within this framework, on December 7, 2022, ENARGAS issued Resolution 523 by which it called for a public hearing held on January 4, 2023, in order to consider a transitional tariff adjustment of the public natural gas transportation service. In said hearing, in which it was informed that the increase pending application, considering the lack of semiannual adjustments by WPI since April 2019 and the transitory increase granted of 60% as from March 2022, amounted to an estimated 270% as of December 2022, we requested a transitory tariff increase for the year 2023 of 135%, taking into account the current context the country is going through, aiming at the continuity, accessibility and normal provision of the public service of natural gas transportation, in safe conditions, trying to mitigate the economic and financial effects of the higher costs and current expenses associated to the service.
On March 15, 2023, ENARGAS submitted a proposal to us for an addendum to the RTI.
On March 16, 2023, our Board of Directors approved the 2023 Transition Agreement sent by ENARGAS. This addendum was subsequently ratified by PEN through Decree No. 250/2023 of April 29, 2023. Previously, on April 27, 2023, ENARGAS issued Resolution No. 186/2023 which published the new tariff tables in force.
The 2023 Transition Agreement has conditions similar to the 2022 Transition Agreement. The 2023 Transition Agreement includes:
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As of April 29, 2023 a transitional tariff increase of 95% on the natural gas transportation tariff and the Access and Use Charge.

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During its term, we may in no case distribute dividends or cancel in advance directly or indirectly financial and commercial debts contracted with shareholders, acquire other companies or grant credits (unless the credits benefit users or are granted to contractors who do not qualify as users). If we understand it is appropriate to distribute dividends, it must require authorization from the Ministry of Economy. For its part, in the event that we understand it is appropriate to cancel in advance directly or indirectly financial and commercial debts contracted with shareholders, acquire other companies or grant credits, it shall require authorization from ENARGAS.
On December 14, 2023, through Resolution No. 704/2023, ENARGAS convened a public hearing scheduled for January 8, 2024. On February 9, 2024, ENARGAS issued Resolution No. 52/2024 which declared that the public hearing was declared valid.
As a result of this hearing, on March 26, 2024, we entered the 2024’s Transitional Agreement with the ENARGAS, which provides for a transitional adjustment of 675% in natural gas transportation tariffs. This tariff increase came into effect on April 3, 2024, after Resolution No. 112/2024 (the “Resolution 112” ) issued by the ENARGAS was published in the Official Gazette. According to Resolution 112, as from May 2024 and until the RTI process is completed, tariffs are adjusted monthly by a composite index (the “Transitional Adjustment Index”) as follows:

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47% by the Wage Index - Registered Private Sector published by INDEC,

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27.2% WPI, and

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25.8% Construction Cost Index in Greater Buenos Aires - Materials chapter published by INDEC.
To this end, ENARGAS will issue the corresponding monthly resolution adjusting the tariff charts to be applied.
In addition, Resolution 112 provides that during 2024 we must execute an investment plan in the amount of Ps. 27,690 million (adjustable by the Transitional Adjustment Index). As of the date of this Annual Report, we have submitted such investment plan, which was fully executed.
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On December 16, 2023, Decree No. 55/2023 was issued, declaring a state of emergency in the national energy sector until December 31, 2024, which was extended until July 9, 2025, by Decree No. 1023 on November 19, 2024. Among other provisions, this decree: (i) establishes the initiation of the RQT process, (ii) orders the intervention of ENARGAS starting January 1, 2024, and (iii) instructs the Secretariat of Energy to issue the necessary regulations and procedures for the establishment of market prices for the public natural gas transportation service. Decree No. 1023 stipulates that the implementation of the tariff schedules resulting from the tariff review initiated pursuant to Decree No. 55/2023 must not exceed July 9, 2025.
On May 9, 2024, ENARGAS informed the licensing companies of the public transport and distribution service of natural gas of the postponement of the monthly tariff adjustment corresponding to the month of May.
On June 5, 2024, ENARGAS informed us that the implementation of the tariff adjustment for June 2024 would be postponed and that the monthly adjustment methodology for the period from July to December 2024 would be replaced. According to ENARGAS, the newly increased monthly rate will be based on the expected inflation rate estimated by the Ministry of Economy for such period. Any difference between the actual inflation and the estimated inflation will be factored into the RTI calculation. If the actual inflation is higher or lower than the estimate, this difference will be reflected in the rate determined by the RTI process.
On July 1, 2024, ENARGAS notified us that, acting on the express instructions of the Argentine Ministry of Economy and the Argentine Energy Bureau, the tariff adjustment stipulated for the month of July 2024 will not be implemented and that tariff charts published in the Argentine Official Gazette on April 3, 2024, will remain in force and unchanged.
During 2024 and the period elapsed in 2025, the Company received tariff increases of 675%, 4%, 1%, 2.7%, 3.5%, 3%, 2.5%, 1.5%, and 1.7%, effective from April 3, August 1, September 2, October 1, November 4, December 4, January 1, 2025, February 1, 2025, and March 6, 2025, respectively.
Within the framework of the RQT process, on January 14, 2025, ENARGAS, through Resolution No. 16/2025, published the call for a public hearing held on February 6, 2025, with the aim of considering, among other issues, the RQT for natural gas transportation and distribution, and the methodology for periodic adjustment of natural gas transportation and distribution tariffs.
At this hearing, we presented, among other aspects, our expenditure and investment plan for the five-year period 2025-2029, the capital base, and the proposed WACC (9.98% real after taxes). Considering the tariff calculation methodology and the mentioned parameters, a tariff increases of 22.7% was requested compared to the tariffs in force as of January 2025. Additionally, alternatives for the periodic tariff adjustment methodology were presented:
•
WPI, or
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A polynomial formula composed of information published by INDEC:

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30% WPI,

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40% total registered wage index, and

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30% construction cost index for materials.
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As of the date of issuance of this Annual Report, ENARGAS has not issued the corresponding resolution concluding the RQT, granting the tariff increase, and providing the framework within which the natural gas transportation activity will be developed during the five-year period 2025-2029. However, at the public hearing, ENARGAS proposed the application of a WACC rate of 7.18% real, after taxes, and a periodic tariff adjustment proposal composed of 50% CPI and  50% WPI.
Certain Restrictions with Respect to Essential Assets . A substantial portion of the assets transferred by GdE were defined in our License as essential to the performance of the licensed natural gas transportation service. Pursuant to our License, we are required to segregate and maintain the essential assets, together with any future improvements thereon, in accordance with certain standards defined in our License.
We may not for any reason dispose of, encumber, lease, sublease or lend essential assets for purposes other than the provision of the licensed service without ENARGAS’s prior authorization. Any extensions or improvements that we make to the natural gas pipeline system may only be encumbered to secure loans that have a term of more than one year to finance such extensions or improvements.
Upon expiration of our License, we will be required to transfer to the Government or its designee the essential assets specified in our License as of the expiration date, free of any debt, encumbrance or attachment. If we decide not to participate in a new bidding for a new License term, we will receive compensation equal to the lower of the following two amounts:

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the net book value of the essential assets determined on the basis of the price paid by CIESA for shares of our common stock plus the original cost of subsequent investments carried in U.S. dollars in each case adjusted by the PPI, net of accumulated depreciation in accordance with the calculation rules to be determined by ENARGAS (since the enactment of the Public Emergency Law, this provision may no longer be valid); or

•
the net proceeds of a new competitive bidding (the “ New Bidding ”).
Once the period of the extension of the License expires, we will be entitled to participate in the New Bidding, and, thus, we shall be entitled to:

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submit a bid computed at an equal and not lower price than the appraisal value determined by an investment bank selected by ENARGAS, which represents the value of the business providing the licensed service at the valuation date, as a going concern and without regard to the debts;

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match the best bid submitted by third parties in the New Bidding, if it would be higher than our bid mentioned above, paying the difference between both values to obtain a new license; and

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if we have participated in the New Bidding but are unwilling to match the best bid made by a third party, receive the appraisal value as compensation for the transfer of the essential assets to the new licensee, with any excess paid by the third-party remaining for the grantor.
Under Argentine law, an Argentine court will not permit the enforcement of a judgment on any of our property located in Argentina which is determined by the courts to provide essential public services. This may adversely affect the ability of a creditor to realize a judgment against our assets.
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Under a transfer agreement we entered into in connection with the privatization of GdE in the 1990s (the “ Transfer Agreement ”), liabilities for damages caused by or arising from the GdE assets are allocated to either GdE or us depending on whether any such damage arose or arises from the operation of the assets prior to or following the commencement of our operations. Also, pursuant to the Transfer Agreement, we are responsible for any defects in title to such assets, although any such defects are not expected to be material. The Transfer Agreement further provided that GdE was responsible for five years until December 1997 for the registration of easements related to the system, which were not properly recorded, and for the payment to property owners of any royalties or fees in respect thereof. Since 1998, we have been responsible for properly recording any remaining easement agreements and for making payments of royalties or fees related to such easements.
Environment
Environmental matters of the natural gas transportation business are governed by Argentine natural gas rule 153 issued by ENARGAS, which sets the guidelines for the implementation of an environmental management system and for the obligation to evaluate the environmental impact of projects.
Our business activities primarily have an impact on the atmosphere (as a result of methane release and combustion gases), the soil and watercourses due to the pipelines (including maintenance, third parties’ actions or failures). Our activities also generate hazardous waste and environmental noise. Further, we may be required to handle universal archeological or paleontological findings during works. All these aspects are monitored and measured under our comprehensive environmental program. We also conduct an annual emergency drill program to test our response capacity under safety and environmental emergencies, the 2021 drill was completed with satisfactory results. Our policy also extends to our contractors, who are required to comply with the same standards and implement environmental protection measures for the execution of each work.
See “ Item 4. Our Information—D. Property, Plant and Equipment—Environmental, Social and Governance .”
Competition
Our Natural Gas Transportation business provides an essential public service in Argentina in accordance with Article No. 1 of the Natural Gas Law. Although there are no regulatory limitations on entry into the business of providing natural gas transportation services in Argentina, the construction of a competing pipeline system would require substantial capital investment and the approval of ENARGAS. Moreover, as a practical matter, a direct competitor would have to enter into agreements with natural gas distribution companies or end-users to transport a sufficient quantity of natural gas to justify the capital investment. The building and operation of a natural gas pipeline requires important technical know-how and high investment levels.
Currently, the demand for natural gas exceeds the available transportation capacity, but as both balance out, we could face competitive scenarios with TGN based on tariff differentials.
Also, the ability of new entrants to successfully penetrate our market would depend on a favorable regulatory environment, an increasing and unsatisfied demand for natural gas by end-users, sufficient investment in downstream facilities to accommodate increased delivery capacity from the natural gas transportation systems and the finding of significant natural gas reserves. Given the potential of Vaca Muerta’s non-conventional gas formation, other competitors, new market participants or even us in association with third parties may become interested in participating in the construction of new similar projects that could have an impact on our competitive position and on our financial situation and future results.
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To a limited extent, we compete 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 we and TGN are either directly or indirectly connected (Camuzzi Gas Pampeana S.A., Metrogas S.A. and Naturgy Argentina S.A.). We compete directly with TGN for the transportation of natural gas from the Neuquén Basin to the greater Buenos Aires area.
Additionally, we face indirect competition from gas marketers, who purchase remaining gas transportation capacity to resell it. As gas marketers resell the remaining capacity to third parties at a lower price, greater efficiency in system utilization and a higher load factor could be achieved. We could have idle transportation capacity that industrial customers do not need to contract on a firm basis because they can purchase this capacity at the lower interruptible transportation tariff.
The cost of natural gas relative to competing fuels may also affect the demand for transportation services in the long-term. The delivered cost of gas to end-users in Argentina, based on energy content, is currently significantly lower than other alternative fuels, except for hydroelectric power.
The Argentine Government has launched a series of projects to promote the exploration and development of new natural gas reserves.
Through Resolution No. 1036/2021, published in the Official Gazette on November 1, 2021, the Secretary of Energy approved the “Guidelines for an Energy Transition Plan to 2030” where the objectives and characteristics of the Argentine energy matrix and the main action guidelines to comply with them are formulated.
The abovementioned Resolution incorporates the Energy Transition Program, which establishes a series of general objectives and strategic guidelines for 2030 in energy matters. Regarding the guidelines, the program includes energy efficiency; clean energy in greenhouse gas (GHG) emissions; gasification; development of national technological capacities; resilience of the energy system; federalization of energy development; national strategy for the development of hydrogen.
Within this framework, on February 11, 2022, Resolution 67 was published, which created the Transport.Ar Program whose main purpose is to promote the development and growth of natural gas production and supply.
The program is aimed at the development of different economic and industrial aspects. In particular, within the framework of such development, it aims at: (i) the growth of natural gas production and supply; (ii) the substitution of LNG and Gas Oil - Fuel Oil imports; (iii) ensuring energy supply and guaranteeing domestic supply; (iv) increasing the reliability of the energy system; (v) optimizing the national transportation system; (vi) increasing natural gas exports from neighboring countries; and (vii) tending to regional gas integration.
Among the works included in the program are:

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GPM.


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Construction of the gas pipeline between the cities of Mercedes and Cardales in the Province of Buenos Aires.


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Expansion of NEUBA II Gas Pipeline: loops and compressor plants.


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Reversion of the North Gas Pipeline Stages I and II.

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Expansion of the Central West Gas Pipeline: different sections between the Neuquén and Litoral areas in the Province of Santa Fé.


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Expansion of the final sections of gas pipelines in AMBA.

Also, the following additional works to be executed in subsequent stages are included:

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Expansion of the transportation capacity of the Gasoducto del Noreste Argentino (GNEA) by compression increase.

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GNEA - San Jerónimo connection from the cities of Barrancas to Desvío Arijón in the Province of Santa Fé.

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Construction of loops and compression in Aldea Brasilera (Entrerriano Gas Pipeline).

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Expansion of the transportation capacity of the General San Martín Gas Pipeline.

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Execution of Stage III “Mesopotamia” of the Gas Pipeline of Northeastern Argentina (GNEA) in the Provinces of Corrientes and Misiones.
Also, by means of Decree No. 76/2022 of February 11, 2022, the concession of the GPM was granted to IEASA for a term of 35 years and the trust FONDESGAS (Fondo de Desarrollo Gasífero Argentino) was created, with IEASA as trustee and beneficiary, and BICE as trustee.
The construction of the GPM, and its complementary works, is of vital importance for the Argentine energy development and in a first stage it will connect the town of Tratayén in the Province of Neuquén with the town of Salliqueló in the Province of Buenos Aires, where it will be connected to the gas pipeline system operated by us. The second stage will consist of the construction of the gas pipeline section to San Jerónimo in the south of the Province of Santa Fé.
Notwithstanding, on June 19, 2024, we submitted the Private Initiative which seeks to replace natural gas and liquid imports each winter by using existing infrastructure, complementing the construction of Stage 2 of the GPM. The goal is to achieve the lowest cost for end users and generate savings for the Government. If approved by the Government, a bidding process will be initiated, where we will have the option to match the best offer made by a third party to the Government.
If this or an alternative project continues and is awarded to another company, then we will compete 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 future expansion projects to transport nonconventional natural gas from the Vaca Muerta area.
In addition, the Government has implemented a number of projects to encourage the exploration and development of new natural gas reserves, or secure alternative supplies of natural gas, in recent years.  See “ Item 4. Our Information—B. Business Overview—Natural Gas Transportation—The Argentine Natural Gas Industry. ” For example, the Northeast pipeline is a project, led by the Government, which will connect the Bolivian natural gas basins with the northeastern region of Argentina and the greater Buenos Aires region. In recent years, the Government has carried out, albeit with some delays, the development of the expansion works.
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LIQUIDS PRODUCTION AND COMMERCIALIZATION
Our Liquids production and commercialization activities are conducted at our 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 our three main pipelines from the Neuquina, San Jorge Gulf and Austral natural gas basins.
We own the Liquids obtained at our Cerri Complex. We purchase 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. The results of our Liquids Production and Commercialization segment are subject to risks associated with commodity price changes.
During 2024, 2023 and 2022, all of our Liquid sales were on our own account. Our 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. For more information, see “ —Regulation—Domestic market ” below.
During 2024, we successfully carried out the scheduled major maintenance at the Cerri Complex. This not only guarantees the continuity of services but also allows the technological renewal of the facilities. Although, Liquids production in 2024 reached 1,051,654 tons, a decrease of 82,643 tons or 7.3%, with respect to Liquids production in 2023. During 2024, there were no production restrictions as a consequence of interruptions of natural gas requested by the governmental authorities. With respect to gas arriving at the Cerri Complex for processing, there was a slight decrease compared to 2023, this was mainly due to lower ethane deliveries to PBB as a result of decreased demand from the customer. Additionally, it can be observed that the gas arriving from the San Martín pipeline continued to decrease despite the start of production from the Fénix project, increasing the relative importance of the gas arriving from the Neuquén Basin.
In 2024, we were the second ethane producer behind MEGA, and our market share increased to more than 40% of the total ethane produced in Argentina in that year. The graphs below show our share in total propane and butane production in Argentina during 2024:

graphic

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During 2024, 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. We also continue to advance its positioning in the Brazilian market by maintaining direct maritime exports (without intermediaries) to Brazilian LPG distributors, which began in 2021.
With respect to the export of natural gasoline, during 2024, such gasoline was commercialized through a contract entered with Trafigura Pte Ltd. at the international price less a discount. The contract, for the period February 2024 – February 2026, improves the conditions of the contract in force until February 2024.
For additional information regarding Liquids price evolution during the years 2024 and 2023 see “ Item 5. Operating and Financial Review and Prospects—A. Operating Results.”
Truck exports to neighboring countries have also grown. The countries with which we operate under this scheme are Chile, Paraguay and Brazil. Although volumes exported using this modality are much lower than exports by sea, they allow us to obtain a larger profit margin.
During 2024, we continued to market LPG through the land mode, dispatching approximately 14,389 trucks (331,751 tons) of own product, compared to approximately 15,518 trucks (379,544 tons) of own product dispatched during 2023.
Our 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. If either of the parties does not comply with the TOP or DOP conditions, as applicable, that party is required to compensate the other party for the breach of the minimum annual quantities’ commitment. Pursuant to the current contract with PBB, in case of a default by PBB with respect to its TOP commitments, PBB will be required to compensate us.
Our 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.
Our Liquids Production and Commercialization segment has increased as a percentage of our total revenues from 19.0% in 2001 to 45.6% in 2024, as a consequence of the adverse change in the regulated Natural Gas Transportation segment, and the increases in the international prices of LPG and natural gasoline, which generated higher revenues primarily from exports.
In 2024, our export revenues from the Liquids Production and Commercialization segment were Ps. 284,586 million and represented 23% of our total revenues and 51% of our liquids production and commercialization revenues. Additionally, the total volume of sales from Liquids was 1,077,350 tons, and the volume of sales from Liquids exports was 411,440 tons, representing 38.2% of our total liquids sales volumes.
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The annual sales of our Cerri Complex for 2024, 2023 and 2022 in tons were as follows:
2024
2023
2022
Ethane
309,894
394,370
329,232
Propane
393,669
369,683
410,563
Butane
266,123
235,861
263,932
Natural Gasoline
107,664
129,272
125,277
Total
1,077,350
1,129,186
1,129,004
We anticipate 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 our Natural Gas Transportation and Liquids Production and Commercialization businesses.
Regulation
Liquids production and commercialization activities are not subject to regulation by ENARGAS. However, in recent years, the Government has enacted regulations that significantly affect our Liquids production activities.
Domestic market
We are effectively required to meet the minimum domestic demand before exporting significant amounts of LPG, we forego sales to foreign markets, where the prices for some products are higher than those established for local consumers in Argentina.
On March 9, 2005, the Government enacted Law No. 26,020, which set forth the regulatory framework for LPG industry and commercialization. After its issuance, the Ministry of Energy established, through several subsequent resolutions, reference prices applicable to sales of LPG bottles.
On March 30, 2015, the Executive Branch issued Decree No. 470/2015, regulated by Resolution No. 49/2015 issued by the former Federal Energy Bureau, both creating the framework for selling LPG bottles (the “ Households with Bottles Program ”) which replaced the programs in force until that time.
The provisions of Law No. 26,020 set the sales prices of LPG for the local market and the SHR is the body that periodically determines the minimum volume of product that each producer must allocate for commercialization in order to ensure domestic supply. The former Federal Energy Bureau established, through several resolutions, reference prices applicable to sales of LPG containers of less than 45 kilograms and to wholesale LPG sales exclusively to LPG retailers ( fraccionadores ).
During 2024, within the framework of the Households with Bottles Program, a maximum reference price was determined for the members of the commercialization chain in order to guarantee the supply to low-income residential users, obliging producers to supply LPG at a determined price and within a defined quota for each of them. Initially, a compensation payment was established for the producers participating in the Households with Bottles Program, which was eliminated as of February 2019.
It is noteworthy that on January 24, 2025, the Secretariat of Energy issued Resolution No. 15/2025, which, effective from that date, eliminates the maximum sale price set for the products supplied under the Households with Bottles Program (with the export parity price published by the SE under Law No. 26.020 being the sale price limit). Additionally, although this resolution maintains the obligation for LPG producers to supply the domestic market, it eliminates the previously existing supply contributions.
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Between December 31, 2023, and December 31, 2024, the price increased by 75% due to ENARGAS Resolutions 11 and 216. As of December 31, 2024, the price is $420,000/ton.
For more information s ee “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Liquids Production and Commercialization Segment—.”
In addition, we sold propane under the Propane for Networks Agreement which was signed between the Government and producers of LPG, including us, in 2003, we have complied with our commitments under that agreement. Pursuant to the Propane for Networks Agreement, which has been extended several times, the Ministry of Energy fixed prices and procedures by which it compensates participating companies. The compensation received is calculated as the difference between the sales price established for the domestic market and the LPG export parity price published monthly by the Ministry of Energy. The compensation is calculated on a monthly basis. According to the Propane for Networks Agreements in effect during the year 2024, the Secretary of Energy committed to pay the compensation through fiscal credit certificates which could be used to cancel export duties payable from hydrocarbon exports. Not until very recently, on April 10, 2024, the ARCA (formerly AFIP) issued Resolution N° 5498 establishing the procedure which enables to apply the fiscal credit certificates accrued during the year 2023 under the Networks Agreement to cancel export duties payable from hydrocarbon exports.
The Propane for Networks Agreement, which served as a framework for the marketing of the products stipulated therein, has been extended several times. The latest extension was in force until December 31, 2024. However, on February 15 th , 2024, through Note NO-2024-16352944-APN-SE#MEC from the current Secretary of Energy we were instructed to continue providing to the domestic market undiluted propane until a new Propane for Networks Agreement enter into effect. On March 27, 2024, the Secretary of Energy updated the price we receive for deliveries of undiluted propane from the distribution companies and fixed it in 25% of the export parity price published by the Secretary of Energy in effect the 20 th day of the month prior to the approval of the new tariffs defined by the ENARGAS for each distribution company. On April 3, 2024 such new tariffs were published in the Official Gazette and, therefore, since such date the new price for undilute propane applies.
On November 29, 2024, the SE and producers signed a new agreement for the period January 1, 2024 to December 31, 2024 which was ratified by decree No. 183/2025 dated March 12, 2025. However, on January 31, 2025, through Note NO-2025-11082035-APN-DGL#MEC from the current Secretary of Energy we were instructed to continue providing to the domestic market undiluted propane until a new Propane for Networks Agreement enter into effect. We are not yet aware of the terms and conditions the Secretary of Energy will propose for the extension or execution of a new Propane for Networks Agreement during the year 2025.
The Government compensates us for our participation in the Propane for Networks Agreement. As of December 31, 2024, we had Ps. 10,882 million in receivables as fiscal against the Government in connection with the Propane for Networks Agreement, which we will commence shortly to use them to compensate the export duties payable for our exports.
International Market
In the international market, we commercialize propane, butane and natural gasoline to international traders and other clients.
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On September 4, 2018, by means of Decree No. 793/2018 (later amended by National Executive Branch Decree No. 865/2018, the effectiveness of which was ratified by Law No. 27,467), the National Executive Branch stipulated a 12% withholding on exports for all the goods comprised in the common customs MERCOSUR nomenclature, with a maximum of Ps.4 per Dollar for the products that our Company exports. This price limit was left without effect on December 16, 2019 pursuant to Decree No. 37/2019.
Through Law No. 27,541, the Executive Branch (until December 31, 2021) is empowered to set export duties, the rate of which may in any case not exceed 33% of the taxable value price. Beyond the general limit mentioned above, with respect to hydrocarbons, it is established that withholding tax may not exceed 8% of the taxable value price.
On May 19, 2020, the Government issued Decree No. 488/2020 (“Decree 488”) pursuant to which, among others, the price per barrel of crude oil in the local market was fixed at U.S.$45 until December 31, 2020, subject to review if the “ICE Brent first line” price exceeds U.S.$45 / bbl during 10 consecutive days, and introduced modifications to the tax regime applicable to domestic consumption of fuel and export withholdings.
During fiscal year ended December 31, 2024, the withholding tax rate reached the maximum amount of 8%.
During 2023 and in order to encourage gas and oil exports, on October 3, 2023, the Energy Secretariat issued Resolution No. 808/2023 by which hydrocarbon exporters are included within the Export Increase Program created by Decree No. 576/22. According to this program, it is allowed to settle a proportion of exports at a different exchange rate than “blue chip swap” (between 20% and 30% depending on the period in which the settlement was made), and the remainder must be paid at the official exchange rate. At the date of issuance of this Annual Report, the proportion that may be settled by “blue chip swap” amounts to 20%.
Environment
In addition to this sector-specific regulation, we must comply with the environmental legislation set by each of the seven provinces where the high-pressure trunk gas pipeline system runs.
Our production and liquid storage facilities are subject to Law No. 11,459 of industrial establishment of Buenos Aires. Additionally, we must comply with all environmental legislation issued by the province, which includes laws and regulations of gas emissions, waste emissions, use of public waters and return of effluents, among others. Both facilities in the Cerri Complex and Puerto Galván have valid environmental certificates.
See “Item 4. Our Information—D. Property, Plant and Equipment—Environmental, Social and Governance.”
Competition
The construction and operation of natural gas processing plants located in the Province of Neuquén have represented important competition for our Liquids sector, since our customers could satisfy their product demand with alternative suppliers. This competition was finally mitigated by entering into agreements with natural gas producers that limited their ability to make investments in natural gas processing plants.
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For example, at the end of 2000, MEGA finished building and began operation of a gas processing plant with a capacity of approximately 1.3 Bcf/d, located in the Province of Neuquén. Although the construction of this gas processing plant initially resulted in lower volumes of gas arriving at the Cerri Complex, we have been able to undertake measures to substantially mitigate any negative impact of MEGA’s activity. However, there is a risk that additional gas processing at the MEGA plant could result in lower volumes or lesser quality gas (i.e., gas with lower liquids content) arriving at the Cerri Complex in the future, or that other projects that may be developed upstream of the Cerri Complex could adversely affect our revenues from Liquids production and commercialization services.
Formerly, our sole purchaser of ethane, PBB, decided, for commercial reasons, to give priority to the product provided by MEGA. If PBB continues with its policy of taking increased volumes of ethane from our competitors, this situation could adversely affect our revenues from Liquids production and commercialization services, if we are unable to sell the ethane and must reinject it into the gas stream.
In order to guarantee access to natural gas not yet processed in the Cerri Complex, in the past, we obtained the commitment of natural gas producers to not build natural gas processing plants upstream of the Cerri Complex during the term of such long-term agreements. From time to time, and as these contracts expire, we renew and sign new agreements with them to replace expiring contracts. The agreements reached in more recent years, have had shorter durations and the contracts in effect do not limit the ability of gas producers to build natural gas processing plants upstream of the Cerri Complex during the term of the agreement. All of these recent agreements contain commitments of such natural gas producers not to reduce the quality of the natural gas that they sell to us. Nevertheless, any decision by such natural gas producers to make modifications to the methodology for injecting natural gas into the pipeline system could result in the receipt of lower quality natural gas, thereby reducing the amount of Liquids available for extraction and processing in the Cerri Complex.
MIDSTREAM
Other business activities are not subject to regulation by ENARGAS.
Midstream Services
Under our Midstream business segment, we provide midstream integral solutions related to natural gas production, 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. Our portfolio of midstream customers also includes distribution companies, big industrial users, power plants and refineries. Our 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 our 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 us to comply with the agreements signed with the main natural gas producers in the area.
In addition, we provide operation and maintenance of pipelines services to our affiliate Gas Link S.A. (“ Link ”).
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Furthermore, we aim to have a leading role in the development of Argentina’s energy sector. For this reason, we developed a gas gathering network in the Southern Section and Northern Section in the Vaca Muerta fields. To make these investments viable, we executed agreements with various natural gas producers and contracted natural gas treatment services for a period of 10 years.
The construction of a catchment and gathering pipeline and a natural gas conditioning plant in the Vaca Muerta field allows us to gather non-conventional gas from the Neuquén Basin and subsequently inject it into the main gas pipeline systems, ensuring its supply to all of Argentina’s regions. This project means a significant improvement in our role in the natural gas development of Argentina and is part of our growth strategy.
The total original investment in both the Northern Section and the Southern Section of the pipeline gathering system and the natural gas conditioning plant located at the ending point of both sections was U.S.$260 million. The 91 miles gathering pipeline formed by the Northern and Southern Sections gather and transport the natural gas production of several hydrocarbon areas within the Vaca Muerta play. The natural gas pipelines have a total transportation capacity of 60 MMm3/d and the conditioning plant (called Tratayén Plant), originally had a capacity of 6 MMm 3 /d of natural gas.
As a consequence of the increase in natural gas production levels registered in the Neuquén basin, we have recorded increasing levels of utilization of our midstream facilities; this is mainly evident in the Vaca Muerta System, which started 2021 gathering and treating flows of around 3.5 MMm3/d at the Tratayén Plant and ended year 2024 with flows of around 28 MMm3/d. To cope with this flow growth several expansion projects were carried out at the Tratayén Plant:

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In year 2020 the first expansion project was approved, increasing the plant total gas conditioning capacity up to 7.7MM m3/d. These works, completed in September 2021, involved the installation of a new slug catcher and a new stabilizing column.

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In year 2021 the installation of two Joule Thomson gas conditioning plants was approved. These works, finalized in 2023, increased total gas conditioning capacity to 14.5MM m3/d. This project involved an estimated investment of U.S.$32 million.

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The third expansion stage, finished in October 2024 and February 2025, consisted of the installation of two gas processing plants (6.6 MMm3/d capacity each, cryogenic technology in both cases). These two plants are operated in gas conditioning mode until conditions make possible to develop a gas processing project in Tratayén Plant. With the addition of these plants the total gas condition capacity will grow up to 28MM m3/d. Total estimated investment for this expansion is U.S.$360 million.
This project will continue to improve the profitability of the investment made by us and generate business opportunities by providing security in the evacuation of natural gas volumes, such as the ones committed by producers under the Plan Gas.Ar.
Additionally, in August 2023 the construction work to extend the gas pipeline gathering network of the Vaca Muerta System was completed. With an investment of approximately U.S.$ 60 million, this 32 kms long pipeline extends from the Los Toldos I Sur area to El Trapial (Vaca Muerta Northern Section); the commissioning of this pipeline enables the current configuration of our intake system, with a total length of 183 km.
This effort was accompanied by the negotiation and closing of new service contracts (transportation and conditioning) with Tecpetrol, Pluspetrol, Vista, YPF, Pampa Energía and Chevron.
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As for the Río Neuquén Plant, year 2024 showed steady levels of incoming natural gas flows which contributed to maintain the solid financial performance of this operation. According to conversations with YPF (main client for this operation) there might be growth opportunities for this plant in the near future; it will depend on tgs ’ ability to provide competitive plant expansion solutions that allow YPF to increase gas inflows, the opportunity to capture and capitalize this opportunity.
Plaza Huincul operations matched our forecasts in terms of incoming gas flows and financial performance. We don´t foresee substantial growth opportunities for this plant in the near future.
Finally, during the year 2023, tgs INTEGRA was launched. This brand groups all the services that tgs offers to the market based on the human resources and tools with which it supports the management of its own assets: from the execution of minor works and pipeline repair works to laboratory works such as meter calibration and analysis of hydrocarbon samples, including the operation and maintenance of pipelines and plants, project management, facility inertization services, pipeline integrity studies, etc.
tgs has been providing all these services for a long time and, in view of the growth that the demand for these services has been experiencing, they have been grouped into a business line with its own identity to enhance its development in the market. Thus, in 2023 tgs INTEGRA was born and launched both internally and externally.
They also reinforce our commitment to Argentina’s energy development and our strategy of making the investments made in the installation of the Vaca Muerta gas pipeline system profitable. In this sense, we continue in conversations with the different producers in the basin in order to capture business opportunities that will allow us to increase our portfolio of services and client portfolio.
We have 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.
Telcosur (Telecommunications System)
We own 99.98% of Telcosur, a telecommunications company created in September 1998 to provide value-added and data transportation services using our modern digital land radio telecommunications system with Synchronous Digital Hierarchy (“ SDH ”) technology (which was installed for purposes relating to our gas transportation system).
With respect to the telecommunications services provided by Telcosur, during the year 2024, 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. Telcosur’s strategy is focused on being a service provider in Vaca Muerta, taking advantage of its infrastructure and know-how in the industry. It is in this sense that among its main clients are the main oil and gas producers in the area as well as other telecommunications companies that provide services to them.
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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, making progress with the development of digital twins for antenna support masts and an innovative system for monitoring the verticalization of antenna support structures. A predictive system for monitoring data networks was implemented, which allowed Telcosur to advance in the early detection of network events and to act proactively to benefit customer service.
C.
Organizational Structure
The following is a summary diagram of our subsidiaries (Telcosur) and affiliates as of December 31, 2024, including information about ownership and location:
graphic
D.
Property, Plant and Equipment
Gas Transportation
The principal components of the pipeline system we operate are as follows:
Pipelines . We render natural gas transportation service through a pipeline system that is 5,746 miles long, of which 4,768 miles operated under the License on an exclusive basis. We manage 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.
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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 our measurement instruments to ensure that these are functioning within appropriate industry standards and in accordance with the specifications contained in our 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.).
We transport 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. Information with respect to certain aspects of our main natural gas pipelines as of December 31, 2024, is set out in the table below:
Major Pipeline
Length (miles)
Diameter (inches)
Maximum Pressure (pound/inch)
Compressor Units
Operative Compressor Plants
HP Output
General San Martín
2,853
24/30
853/995
59
17
512,800
Neuba I/Loop Sur
732
24/30
853
14
5
57,800
Neuba II
1,235
30/36
975/995
21
7
194,000
Other (1)
926
Various
Various
6
3
7,500
Total
5,746
100
32
772,100

(1)
Includes 247 miles of transfer pipelines throughout the pipeline system, as well as the Cordillerano pipeline, with a length of 274 miles, and the Chelforó-Conesa pipeline and other minor pipelines.
General San Martín . This pipeline was built in three stages, completed in 1965, 1973 and 1978, and 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. See “ Item 4. Our Information—B. Business Overview—Natural Gas Transportation—Pipeline Operations—Pipeline Expansions. ”
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Neuba I Gas Pipeline (Sierra Barrosa-Bahía Blanca). Neuba I Gas Pipeline was built in 1970 and was expanded by us in 1996. It is one of our two main pipelines serving our principal source of gas supply, the Neuquén 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 Neuquén 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, we are 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 we also operate. 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 us 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 . Our newest natural gas pipeline, Neuba II Gas Pipeline, was built in 1988 and is our second pipeline serving the Neuquén 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 . We also operate the Cordillerano natural gas pipeline, built in 1984, which receives gas from the Neuquén Basin and supplies it mainly to three tourist centers in southern Argentina. In addition, we operate 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.
Additional information regarding the expansion of our gas transportation system is included in “ Item 4. Our Information—B. Business Overview—Natural Gas Transportation—Pipeline Operations—Pipeline Expansions .”
Ancillary Facilities
Cathodic Protection System
Currently, we operate cathodic protection devices, which are located along our 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.
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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 our more than 5,769 miles of gas pipelines and 33 compressor plants.
To that effect, we have fiscal measurement stations associated with gas receptions from producer facilities and gas deliveries to our 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 our SCADA/EFM system, transmitted through our communications infrastructure and centralized at our 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 our Buenos Aires headquarters, the gas control system controls scheduled gas injections and deliveries and allows us 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, we have developed a software system called Solicitud, Programación, Asignación y Control , which, among other things, allows us to control actual volumes and projected future injections to determine producer deviations. As part of this system, we operate 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 our system efficiency.
Liquids Production and Commercialization
Our Liquids production and commercialization activities are conducted at our Cerri Complex. It is located near the city of Bahía Blanca and is connected to each of our 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, we also maintain 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 currently capable of storing 68,882 short tons of liquids. See this “ Item 4.—Our information—B. Business Overview—Liquids Production and Commercialization ”.
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Midstream
As part of this business segment, we provide services related to natural gas including treatment, gathering and compression. As of the date of issuance of this Annual Report, total compression capacity of our plants Plaza Huincul, Río Neuquén and El Chourron was 34,790 HP. Treatment services are provided by plants located in Plaza Huincul and Río Neuquen with a total capacity of 5.9 MMm3/d. Finally, conditioning services are provided Tratayén plant amounted to 28MMm3/d as of the date of issuance of this Annual Report.
Our assets in Vaca Muerta allowed us to provide solutions to our clients. Through the development of the Vaca Muerta System, which consists of two pipeline sections totaling 183 km and a natural gas conditioning plant located in Tratayén, connected to the main pipelines operated by us (Neuba I and Neuba II), TGN (Central Oeste), and GPM. This Project executed since 2028 will be pivotal in the development of Vaca Muerta natural gas reserves. The execution of these works demanded great commitment from our team and compliance with all the terms agreed with our customers.
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, El Trapial, Los Toldos I Sur and Pampa de las Yeguas I and II.
In November 2024 and February 2025, we commissioned additional investments that allow us to expand our natural gas conditioning capacity and increase our role in the Vaca Muerta development, including the installation of the Propak Plant to be operated in gas conditioning mode until we are able to develop a natural gas processing project in the Tratayén Plant. The Propak Plants may be converted to allow processing of natural gas in the future, and they increased our conditioning capacity by 6.6 MMm 3 /day for each Propak Plant. With the addition of the Propak Plants, our total gas conditioning capacity increased up to 28MMm 3 /d since February 2025. The total estimated investment for this expansion was U.S.$360 million.
Telecommunication
We own 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.
Environmental, Social and Governance
We are committed to managing its business and operating its facilities in compliance with the requirements of applicable legislation and the requirements to which it voluntarily adheres, satisfying the expectations of its customers and prioritizing the quality of its services, the prevention of pollution and the health and safety of its personnel and contractors, through the continuous improvement of the effectiveness of its management system.
In 2024 we continue to work on the ESG Strategic Plan (Environmental, Social and Governance) in which we prioritize these three thematic axes and lines of action that will guide our purpose in this area. Focused on our mission and the role we seek to play in the communities where we do business, the general objectives of our ESG Plan are as follows:
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graphic
Environment
In 2024 we are working on the strategic environmental plan (2022 - 2026) in which we integrate the environment in all phases of business processes, from strategic decision making to risk and opportunity management, planning, design and execution of activities. This plan comprises the following strategic axes and action plans and programs:
Climate change mitigation and adaptation
Our strategic environmental plan includes the goal of reducing methane emissions by 50% by 2030 (taking as a base year the emissions generated in 2021). With this in mind, we have implemented a comprehensive emissions action plan that includes the investments, improvements and best practices necessary to achieve this goal. To this end, we implemented the following actions:

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To optimize the emissions inventory, we conducted a gap analysis of our inventory with the ISO 14064-1 standard (Carbon Footprint Management System). The gap analysis conducted in 2023 with the ISO 14064-1: 2018 Standard (Carbon Footprint Management System) allowed us to develop a plan to incorporate the recommendations that emerged. For this purpose, in 2024, we issued an internal procedure for the management and control of the inventory of greenhouse gas (GHG) emissions, generated directly and indirectly by TGS activities. Additionally, we reviewed our emissions inventory, also incorporating non-relevant emissions, adjusting chromatographies, and adapting the global warming potential factors according to the latest report from the Intergovernmental Panel on Climate Change (“IPCC”).
In 2024, we continued to advance with the plan to incorporate scope 3 emissions into our emissions inventory (which come from the value chain and are not under our control), according to the prioritization of potential sources of indirect emissions studied in 2023.

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Development of the Comprehensive Investment Plan: Within the framework of the RQT 2025-2029 process, a five-year Comprehensive Investment Plan was developed, with one of its fundamental pillars being the reduction of emissions through technological upgrades of facilities and the continuous search for new technologies. The plan focuses on acquiring assets and plans that allow for the efficient detection, reduction, and measurement of gas emission sources from our natural gas transportation segment facilities.
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Additionally, we reviewed internal procedures in Emissions Management, driven by one of our facilities (the Garayalde Compressor Plant), which aims to standardize the process of estimating and quantifying venting from the facility and extrapolate it to the rest of the compressor plants through internal training.

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Climate Risk Assessment: In 2024, we conducted a study to identify the climate risks faced by us, initiating the approach to this globally relevant issue. In this initial phase, we managed to evaluate the climate risks the company faces, to then continue in 2025 with the development of a strategy to manage these risks through adaptation and business continuity.
As part of this process, we consolidated a document with the historical record of extreme weather events that impacted our facilities. This tool allows us to minimize uncertainties associated with the likelihood of extreme weather events occurring.
For the climate risk assessment, climate projection models (Climate Change Risk Map System (SIMARCC) - RCP 4.5 Near Future Scenario 2015-2039) were used, following the recommendations of the Argentine Climate Change Directorate. Climate threats for future scenarios were identified, and a qualitative assessment of the climate risk to our facilities was conducted using a scientifically-based methodology. With the results of the climate threat matrix by facility, a plan to strengthen our Climate Resilience will be consolidated, including preventive measures such as response and recovery plans for extreme weather events. This will reduce vulnerability to identified risks, protecting both our employees and infrastructure, and ensuring operational continuity.

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Energy Management: We are advancing energy, and at TGS, we are genuinely interested in the efficient use of energy. Part of the natural gas we transport is used as energy for our compressors and combustion processes in the transportation business. Therefore, we must be efficient in using this non-renewable natural resource. Additionally, we use it as fuel for electric motor generators that produce electricity. In certain facilities, we complement self-generation with electricity from external sources. We have meters and know our consumption. Through our energy matrix, we can visualize and identify trends to find improvement opportunities.
In 2024, we conducted a gap analysis with the ISO 50001:2018 Standard (Energy Management System) to implement an energy management system for us. With this report, we can define the initial state concerning the reference standard, then develop the action plan and work on the necessary measures for its formation in the coming years. We have held internal meetings to determine the processes needed to comply with each requirement of the standard. We have taken the first steps in this direction, convinced of the importance for our organization to have an energy management system and improve our energy performance.
Aware of the importance of generating collaborative opportunities between companies and universities that contribute knowledge and innovative ideas, providing the possibility of generating new solutions, in 2024, we worked with the National University of the Center of the Province of Buenos Aires (UNICEN) to conduct a detailed energy review, following the general guidelines and requirements of the ISO 50001 Standard, for the Olavarría Compressor Plant, located in the province of Buenos Aires. With this report, we precisely understood our consumption and identified necessary improvements and actions to focus on in this process.
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Biodiversity and Afforestation Management: Since 2023, we have had a Biodiversity and Afforestation Policy, demonstrating our commitment to these key environmental protection issues. In 2024, we achieved 100% baseline afforestation for all our facilities, allowing them to advance with their afforestation plans. The goal of this plan, in addition to generating benefits such as carbon sequestration, is to improve site biodiversity, nutrient cycling, soil, property water dynamics, climate protection, and landscape composition.
Additionally, in 2024, we issued an internal biodiversity and afforestation management procedure with basic guidelines to address this issue. As a management tool, we identified existing protected areas in the provinces where we operate, to monitor and promote the conservation of natural ecosystems. To this end, we advanced with the creation of an application within our geographic information system, called the “Environmental Map of Protected Areas,” where protected areas (public and private), native forest zoning areas, and biosphere reserves that our facilities (pipelines, valves, cathodic protection units, measurement points, scraper traps, compressor plants, and operational bases) have or could have influence due to overlap or proximity can be visualized.
This information is available to the entire company. Additionally, areas where species listed on the IUCN Red List and national conservation lists by extinction risk level that coincide with our operating area were incorporated. This content will help us identify where our activities pose a threat to at-risk plant and animal species. Identifying these threats will allow us to take the necessary steps to prevent harm and avoid species extinction.
Proactive environmental leadership
We have continued to work with the leaders of the facilities so that they can continue to deepen their role in environmental management. In addition, we conducted training on the strategic plan, to disseminate it and promote actions.
As every year, we have carried out multiple environmental communication actions that are linked to the calendar of environmental anniversaries, which included talks on topics of interest, trivia and a lot of information on the initiatives that are being carried out.
We made environmental training and consultation material available to all personnel through the tgs CAMPUS.
It was an opportunity to learn and deepen our understanding of these topics and also to explain how we have been working in tgs . 600 people participated in the cycle and the recordings of the conferences were uploaded to the tgs CAMPUS for anyone who wished to see them.
Circularity of processes and consumption
Water resource management
We continued to achieve the goal set in our ESG Plan, whereby we proposed to recover 80% of sewage effluents for irrigation by 2025. This year we made progress with the plan to incorporate biodigesters in the Río Negro facilities, in order to replace the existing absorbent wells.
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This year we are moving forward with the quantification of our direct water footprint in order to achieve a more efficient management of this limited natural resource. This indicator is a first step towards generating efficient improvements in water management and raising awareness of our water consumption and water use.
Waste management
The goal we set in our ESG Strategic Plan to achieve a recycling rate of more than 50% by 2026 was the guide for us to carry out multiple actions to minimize the waste generated. In this sense, our management implied carrying out several awareness and training campaigns that allowed us to carry out depapelization actions, reduction of single-use plastics, registration of new waste operators, disposal of unused electrical appliances, among others.
Social
We closed a growth and expansion year that witnessed great achievements and brought us many acknowledgements. Our talent attraction strategy is based on positioning tgs brand both in the oil & gas industry and other markets, seeking to attract the best talent. This year we added further and renewed proposals of agreements with universities and participation in exhibitions and employment fairs in our country.
Driven by our purpose of developing a sustainable business, we place a strong focus on our neighboring communities, generating local employment. To that end, we participated in supervised professional practices for high schools, aiming at strengthening the bond between companies and educational institutions. We also conduct employability workshops that target the students of the last years of technical schools in the provinces of Buenos Aires and Neuquén, to provide them with tools to get higher quality jobs.
We develop a healthy and challenging work environment, and we watch over the integral wellbeing of our people. We have been one of the greatest places to work in Argentina for over 10 years, as certified by the global firm Great Place to Work.
Changes in the social context gave rise to the need of addressing diversity, inclusion and free of violence spaces. This year we set up the Committee of Diversity and Inclusion, which raised awareness of the topic throughout the whole organization. We started with the design of an activity under the framework of Women’s Month and later a parenting workshop. After that, we conducted two awareness meetings on topics related to diversity, inclusion, violence, discrimination and harassment at the workplace with the participation of our Management Committee, Human Resources and Institutional Relations. These are clear steps towards organizational changes leading to actual inclusion.
This approach to diversity and inclusion started with an overall diagnosis conducted in the year 2022, along with an action plan focused on the development of inclusive spaces, free from violence. As we have outlined in our ESG Strategic Plan, we keep performing actions that turn us into a more diverse company. For instance, we have promoted women to positions commonly held by men as shift supervisors, gas dispatch operators, plant leaders and truck load operators. On the other hand, we are in the process of developing the protocols for dealing with cases of violence and harassment.
For information regarding our employees and its geographical distribution see “Item 6. D. Employees.”
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Governance
In May 2024, we presented our Sustainability Report 2023, which brings together the environmental, social and economic indicators of its management, based on the prioritization of the Sustainable Development Goals (SDGs), in line with the principles established by the United Nations. The 2023 Sustainability Report uses the sustainability guidelines of reference worldwide, such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).
On the other hand, in 2024 risk management was included as a key issue in the ESG Strategic Plan defined by us, aiming to implement the respective action plan during 2024.
Insurance
We maintain insurance, subject to deductibles, against third-party liability for damage to all of our facilities used in the Liquids and Midstream business segments and our pipeline assets that pass under rivers or other bodies of water and the Strait of Magellan and business interruption. We believe this coverage is consistent with standards for international natural gas transportation companies. The terms of the policies related to the regulated assets have been approved by ENARGAS. In addition, we have obtained insurance coverage for our directors and officers pursuant to a standard D&O insurance. For additional information, see “ Item 3. Key Information.—D. Risk Factors.—Risks Relating to Our Business—Our insurance policies may not fully cover damage or we may not be able to obtain insurance against certain risks.”
Item 4A.
Unresolved Staff Comments
We do not have any unresolved staff comments.
Item 5.
Operating and Financial Review and Prospects
A.
Operating Results
The following Operating and Financial Review and Prospects should be read in conjunction with our Financial Statements included elsewhere herein.
This Operating and Financial Review and Prospects discussion contains forward-looking statements that involve certain risks, uncertainties and assumptions. These forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “will likely result,” “intend,” “projection,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “plan” or other similar words. Our actual results may differ materially from those identified in these forward-looking statements. For more information on forward-looking statements, see “ Cautionary Statement Regarding Forward-Looking Statements. ” In addition, for a discussion of important factors, including, but not limited to, our tariffs on the Natural Gas Transportation segment and other factors that could cause actual results to differ materially from the results referred to in the forward-looking statements, see “ Item 3. Key Information—D. Risk Factors. ”
For purposes of the following discussion and analysis, unless otherwise specified, references to fiscal years 2024, 2023 and 2022 relate to the fiscal years ended December 31, 2024, 2023 and 2022, respectively.
We maintain our accounting books and records in Argentine pesos. Our Financial Statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 have been prepared in accordance with the accounting policies based on IFRS Accounting Standards.
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Our management concluded that Argentina is a hyperinflationary economy in terms of IAS 29, effective as of July 1, 2018. As a result, (i) our audited consolidated statements of financial position as of December 31, 2024, and our audited consolidated statements of comprehensive income, changes in equity and cash flows, and the related explanatory notes for the year ended December 31, 2024, included elsewhere in this Annual Report have been prepared using hyperinflation accounting in accordance with IAS 29, and (ii) our audited consolidated statements of financial position as of December 31, 2023, and our audited consolidated statements of comprehensive income, changes in equity and cash flows, and the related explanatory notes for the years ended December 31, 2023 and 2022, included elsewhere in this Annual Report have been restated to Current Currency in accordance with IAS 29 for comparative purposes. Thus, the Financial Statements and the financial information included in this Annual Report for all the periods reported are presented on the basis of current pesos as of December 31, 2024.
For information relating to the presentation of financial information, see “ Presentation of Financial and Other Information. ”
Critical Accounting Policies
Critical accounting policies are those that are most important to the portrayal of our financial condition, results of operations and cash flows, and require management to make difficult, subjective or complex judgments and estimates about matters that are inherently uncertain. In connection with the preparation of our Financial Statements included in this Annual Report, we have relied on assumptions derived from historical experience and various other factors that we deemed reasonable and relevant. Although we review these assumptions in the ordinary course of our business at the end of each reporting period, the presentation of our financial condition and results of operations often requires management to make judgments regarding the effects of matters that are inherently uncertain. Actual results may differ from those estimated as a result of these different assumptions.
We have described each of the following critical accounting policies in order to provide an understanding about how our management forms judgments and views with respect to such policies and estimates:

•
impairment of property, plant and equipment ( “PPE” ); and

•
provisions for legal claims and others;
For additional information regarding our Critical Accounting policies, see Note 5 to our Financial Statements.
Factors Affecting Our Consolidated Results of Operations
Year to year fluctuations in our net income are a result of a combination of factors, including primarily:

•
the volume of Liquids;

•
changes in international prices of LPG and natural gasoline;

•
regulation affecting our liquids business, including Law No. 26,020 (which requires us to meet domestic demand before exporting LPG);

•
changes in the input costs related to the Liquids production and commercialization segment, including the Gas Charge Resolutions;

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•
the availability of natural gas and its richness;

•
fluctuation in the peso/U.S. dollar exchange rate;

•
the tariffs we are permitted to charge in our Natural Gas Transportation business segment;

•
local inflation and its impact on costs expressed in pesos; and

•
other changes in laws or regulations affecting our operations, including tax matters.
Sources of revenue
Natural gas transportation
Our Natural Gas Transportation operations derive revenues from the sale of transportation capacity to customers. The applicable rates derive from the tariff tables published by ENARGAS by remained unchanged between April 2019 and March 2022. In April 2023 we received a limited tariff increase below the evolution of inflation and the evolution of operating costs.
On March 26, 2024, tgs entered the 2024 Transitory Agreement with ENARGAS, which outlined a transitory adjustment of 675% in natural gas transportation tariffs.
Also, on July 1, ENARGAS again informed the Company of the postponement of the monthly tariff increase, this time corresponding to the month of July, maintaining the tariff charts in effect as from April 3, 2024.
Therefore, throughout 2024 and the period elapsed in 2025, we received tariff increases of 675%, 4%, 1%, 2,7%, 3,5%, 3%, 2,5%, 1,5% and 1.7% effective as from April 3, August 1, September 2, October 1, November 4, December 4 of 2024, January 1, February 1 and March 6 of 2025, respectively.
For additional information see “ Item 4. Our Information—B. Business Overview—Natural Gas Transportation .”
Production and commercialization of Liquids
Our production and commercialization of liquids operations generate revenues from the sale of propane, butane, ethane and natural gasoline, in the local and international markets. Regarding propane and butane, during 2024, we sold in the local market we sell our production mainly under the programs stated by the Government.
We also provide certain related services comprising reception, storage and dispatch of the liquids from the facilities located in Puerto Galván.
For additional information see “ Item 4. Our Information—B. Business Overview—Liquids Production and Commercialization .”
Midstream
The services included in the Midstream segment consist mainly in: (i) natural gas transportation and conditioning services in Vaca Muerta, (ii) treatment, removal of impurities and natural gas compression, including the collection and transport of natural gas, (iii) inspection and maintenance of pipelines and compressor plants, (iv) services of steam generation for electricity production and management services for expansion works and steam generation to produce electricity.
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graphic
Telecommunications
Our telecommunications services are derived from the sale of our capacity to customers.
Macroeconomic conditions and inflation
As we are an Argentine corporation ( sociedad anónima ) and all our operations and assets are located in Argentina, we are affected by general economic conditions in the country, such as demand for natural gas, inflation and fluctuations in currency exchange rates. Moreover, as a provider of a public service and producer of hydrocarbons, the prices of our services and products are subject to significant intervention by the Government. These factors affect our operating costs and revenues.
For the year ended December 31, 2024, 46% and 36% of our revenues were attributable to our Liquids Production and Commercialization segment and to our Natural Gas Transportation business segment, respectively.
The following table sets forth, for the years indicated, the variation of key macroeconomic indicators in Argentina during the years specified below, as reported by official sources.
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2024
2023
2022
WPI (in %)
67.1
276.4
94.8
CPI (in %)
117.8
211.4
94.8
Devaluation of pesos vs. dollar (in %)
27.7
356.3
72.5
Real GDP (pesos of 2004) (% change)
(1.7
)
(1.6
)
5.2
Industrial production (% change)
(9.4
)
(1.8
)
4.3
Transportation services tariffs increase
791.0
95.0
60.0

Source : INDEC and Banco Nación.
Argentina has faced and continues to face inflationary pressures. During periods of high inflation, effective wages and salaries tend to fall and consumers adjust their consumption patterns to eliminate unnecessary expenses. The increase in inflationary risk may erode macroeconomic growth and further limit the availability of financing, causing a negative impact on our operations. Inflation increases also have a negative impact on our cost of sales, selling expenses and administrative expenses. We cannot give any assurance that increased costs as a result of inflation will be offset in whole or in part with increases in prices of our products and services.
During the past five years CPI, measured by INDEC, has remained high in Argentina. During 2019, the Argentine government adopted measures intended to control inflation, which contributed to a deep recession. Despite these efforts, inflation in Argentina continued to rise, particularly since 2020 and because of the measures taken by the government to contain the population during the COVID. Considering the CPI, inflation was 117.8%, 211.4%, 94.8%, 50.9%, and 36.1% in the years ended December 31, 2024, 2023, 2022, 2021 and 2020, respectively. This past year showed a significant slowdown compared to 2023, attributed to the economic policies implemented by President Javier Milei since he took office in December 2023. These measures included a drastic reduction in public spending, elimination of subsidies, and structural reforms, which managed to reduce the monthly inflation rate from 25.5% in December 2023 to 2.7% in December 2024.
In March 2025, the INDEC published the CPI which rose to 3.7%, 55.9% when measured year-on-year.
Unless we can implement measures that allow us to mitigate the impact of inflation on our costs and increasing the efficiency, inflation may materially adversely affect our financial condition and results of operations.
IAS 29 requires that the financial statements of an entity whose functional currency is that of a hyperinflationary economy, regardless of whether they are based on the historical cost method or the current cost method, be expressed in terms of the current unit of measurement at the reporting date of the reporting period. IAS standard lists a series of factors that should be considered in determining whether an economy is hyperinflationary, including whether the cumulative rate of inflation over three years’ approaches or exceeds 100%.
In order to evaluate the aforementioned quantitative condition, and also to restate the financial statements, the CNV has established that the series of indexes to be used for the application of IAS 29 is determined by the FACPCE. This series of indexes combines the CPI as of January 2017 (base month: December 2016) with the WPI, both published by the INDEC until that date, computing for the months of November and December 2015, for which there is no information from the INDEC on the evolution of the WPI, the variation in the CPI of the Autonomous City of Buenos Aires.
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Since June 2018, the International Practices Task Force of the Center for Quality, which monitors “highly inflationary countries”, categorized Argentina as a hyperinflationary country.
The restatement method of IAS 29 provides that monetary assets and liabilities (those with a fixed nominal value in local currency) must not be restated since they are already expressed in the current unit of measurement at the end of the reporting period. In an inflationary period, maintaining monetary assets generates loss of purchasing power and maintaining monetary liabilities generates a gain in purchasing power; provided that such items are not subject to an adjustment mechanism that compensates to some extent for these effects. The monetary loss or gain is included in the result of the period reported, revealing this information in a separate line item.
Assets and liabilities subject to adjustments based on specific inflation agreements must be adjusted in accordance with such agreements. The non-monetary items measured at their current values at the end of the reporting period, such as the net realization value or others, do not need to be restated. The remaining non-monetary assets and liabilities must be (i) restated by applying a general price index and (ii) expressed in the measuring unit (the hyperinflationary currency) current at the end of the reporting period. Any restated non-monetary asset amount does not exceed its recoverable amount.
As of the IAS 29 transition date (January 1, 2016), we applied the following rules to express the shareholders’ equity accounts in the currency unit as of December 31, 2024:

•
The components of the capital stock were restated from the dates they were contributed;

•
Reserved earnings were maintained at the date of transition at their nominal value (legal amount without restatement);

•
The restated unallocated results were determined by the difference between the net assets restated at the transition date and the rest of the initial equity components expressed as indicated in the preceding paragraphs; and

•
After the restatement at the transition date, all the components of the equity were restated by applying the general price index from the beginning of the period, and each variation of those components was restated from the date of contribution or from the moment in which the variation is added by any other means.
Revenues and expenses (including interest and foreign exchange differences) are restated from the date of their booking, except for those income statement items that reflect or include in their determination the consumption of assets measured in purchasing power of a date before the consumption booked, which are restated based on the date of origin of the asset to which the item is related (for example, depreciation and other consumption of assets valued at historical cost); and also those results that arise from comparing two measurements expressed in purchasing power currency of different dates, for which it is necessary to identify the amounts compared, restate them separately, and make the comparison, but with the amounts already restated.
Because Natural Gas Transportation business segment sales represented 36% of our total revenues during the year 2024, and are denominated in pesos, any further increase in the rate of inflation not accompanied by a parallel increase in our tariffs would decrease our revenues in real terms and adversely affect our results of operations.
For additional information regarding the impact of the application of IAS 29, see Note 4.d to our Financial Statements included elsewhere in this Annual Report.
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In addition, inflation may negatively affect income tax payable. For example, under hyperinflationary contexts, the existence of higher monetary liabilities over monetary assets will mean an increase in income tax payable. Act 27,468 substituted the WPI for the CPI for the calculation of the indexation adjustments for tax purposes, and it modified the standards for triggering the tax indexation procedure.
Since December 31, 2020, the accumulated variation of the CPI exceeds the threshold set for the application of the income tax inflation adjustment. For the year 2024, we recorded a loss of Ps. 38.362 million in our Income Tax line item of our Statement of Comprehensive Income regarding the application of the above-mentioned tax inflation adjustment.
Economic situation and outlook
The Company operates in a complex economic context whose main variables have recently had strong volatility as a result of political and economic events at the national level.
On December 10, 2023, a new administration led by Javier Milei in the Executive Branch (“PEN”, according to its initials in Spanish) took office, signaling a sharp turn from the road pursued by the country in the previous years in terms of economy, politics, and international policies. Given the unfavorable macroeconomic conditions as well as the uncertain governability of the new administration, upon taking office the new government adopted a set of measures under the framework of an emergency scheme. The emergency measures targeted the elimination of the fiscal deficit (via a strong fiscal adjustment), zero monetary issuance by the Central Bank to achieve an ensuing drop in inflation and the readjustment of relative prices, particularly of the public utilities’ fees.
Along with these measures, the government issued a set of reforms, among which we can point out at the Argentine state deregulation decree, the fiscal law, and probably the most relevant of all: the submittal of the Law of Bases to the Congress. After six months of debate in Congress, on June 28 2024 the Chamber of Deputies gave green light to the definite text of the Law of Bases, which had formerly obtained half approval from the Senate. Among other issues, the mentioned bill includes:

•
The declaration of a public emergency in administrative, economic, financial and energy matters for the term of one year.

•
Amendments in the calculation of income taxes for individuals, the self-employment tax regime, personal assets and money laundering.

•
The approval of the privatization, whether total or partial, of certain companies and partnerships fully or partially owned by the National Government.

•
The creation of an Incentive Regime for Large Investments (“RIGI”, for its acronym in Spanish) for projects that meet certain conditions. RIGI grants some fiscal, custom and exchange benefits with the aim of encouraging private investment.

•
Amendments to the labor and retirement regime

•
Amendments to Natural Gas Law N° 24,076 to, among other issues, allow the extension of the license for an additional term of 20 years (versus the ten years of extension originally stipulated).

•
Amendments to the Hydrocarbons Law N° 17,319 to provide legal security to the energy development of Argentina and ensure free commerce and competition.
The Law of Bases has been disputed by several sectors of the economy and the political spectrum and has even been challenged at court. Despite that, the current administration considers it of the utmost importance for the country’s restructuring and economic and institutional recovery.
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Although some of the reforms proposed by the Law of Bases have already been regulated and implemented, others are going through their regulation and legislative discussion processes. Therefore, as of the date of the issuance of this Annual Report it is not possible to foresee the impact that the Law of Bases and the fiscal package might have on the results, financial condition and cash flows of the Company.
Among the main 2024 macroeconomic variables, it is worth pointing out at:

•
The CPI recorded in 2024 was of 117.8%, whereas it had been of 211.4% in 2023. As soon as the new administration’s took office on December 10, 2023, it raised the official exchange rate from Ps. 366 to Ps. 800 and December 2023 monthly inflation recorded a 25.5% variation, the highest in the last 3 decades. In 2024, after recording increases of 20.6%, 13.2% and 11% for the first 3 months of the year, inflation rates started to slow down to hit 2.4% in November, the lowest rate in 3 years.
The WPI for the year 2024 was at 67.1%, compared to the accumulation of 276.4% recorded in the year 2023.


•
After the abrupt devaluation of the Argentine peso on December 13, 2023 mentioned above, the Argentine government defined a path of a stable 2% monthly devaluation with regard to the US dollar (1% since February 2025). According to BNA, the exchange rate closed the year 2024 at Ps. 1,032.00 per each US dollar, whereas as of December 31, 2023 the exchange rate had been at Ps. 808.45 (representing an increase of around 27.7%, below inflation measured by the CPI). Regarding the exchange rate gap, upon the new administration’s coming to office, it was above 150% whereas at the closing of the year 2024 it had decreased to roughly 18%.


•
The country risk premium paid by Argentine debt, measured by the Emerging Markets Bonds Index (EMBI+) prepared by JP Morgan, had been around 1,906 points as of December 31, 2023 whereas by December 31, 2024 it had dropped to 635 points. Due to Argentina and global volatility EMBI+ increased around to 816 points as of 31 March 2025.


•
Economic activity: GDP fell by 2.1% in the third quarter of 2024. On the other hand, in December 2024 the Monthly Estimate of Economic Activity (“EMAE”, according to its initials in Spanish) recorded a year-on-year increase of 5.5%. Throughout the 2024, this indicator’s behavior was uneven and heterogeneous, depending on each economic sector. Whereas energy (favored by the development of Vaca Muerta) and mining showed the most significant increases, construction, industry and commerce fell on a year-on-year comparison.

•
The Salary Index as of December 2024 recorded a year-on-year increase of 145.5%. It is worth underlining the unevenness of the salary evolution of private workers compared to state employees and unregistered workers. Something similar happened to the unemployment rate, which rose to 6.9% in the third quarter of 2024.


•
BCRA reserves remained under pressure despite the growing restrictions in the access to the exchange market. As of December 31, 2024, net reserves reached US$ 29,612 million, from US$ 23,073 million recorded in December 2023.


•
The trade balance of 2024 recorded a US$ 18,899 surplus, whereas it had showed a deficit of US$ 6,926 million in 2023. This was mainly driven by an increase in exports in the agricultural and energy sectors and a drop in imports.
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•
Since their first month of administration, the government of Javier Milei has managed to reverse the fiscal deficit, reaching a primary and financial surplus for the first time in 14 years. The financial surplus of Ps. 1.8 billion was equivalent to 0.3% of the GDP. On the other hand, the primary surplus rose to 1.8% of the GDP. This was attributable to a 27% decrease in primary expenses.
On April 11, 2025, the Government announced the launch of the next phase of its macroeconomic plan, which includes, among other measures: (i) allowing the exchange rate of the U.S. dollar in the official foreign exchange market (MULC) to fluctuate within a moving band between ARS 1,000 and ARS 1,400, with the band limits widening at a monthly rate of 1%; (ii) eliminating the “dólar blend” mechanism, lifting foreign exchange restrictions for individuals, allowing profit distributions to foreign shareholders starting from fiscal years beginning in 2025, and relaxing deadlines for foreign trade payments; and (iii) reinforcing the nominal anchor by enhancing the monetary policy framework, under which the Central Bank will not issue pesos to finance the fiscal deficit or to remunerate its monetary liabilities.
The outlook for 2025 is challenging, as the political arena will witness an electoral year with October legislative elections to renew part of the Chamber of Deputies and Senators in the National Congress. The government’s challenge will lie in its capacity to maintain the fiscal surplus and thus keep attracting investors’ trust, consolidate the improvement in economic variables and at the same time achieve a recovery in the economic activity to consolidate growth. The volatility of the Argentine economy and the measures adopted by the government have had, and are expected to continue having, a significant impact on our result of operations and financial situation.
The restructuring of the global geopolitical context and order, combined with changes in Argentina’s political and macroeconomic framework, creates a dynamic of significant transformations in the overall business climate, particularly in the energy sector.
The restructuring of the economy and changes in global perception of the country, combined with the development of Vaca Muerta and the consequent reconfiguration of the oil and gas industry due to the focus on unconventional resources with the need to rebuild transportation and energy infrastructure, create a dynamic environment with abundant opportunities.
The Management of the Company is permanently monitoring the evolution of the variables that may have impact on our business, in order to outline business plans and identify the possible impacts on tgs financial condition. The present Annual Report must be read in light of the circumstances mentioned above.
While our business continued growing in 2024, our operating results, financial condition and cash flows remain vulnerable to fluctuations in the Argentine economy. See “ Item 3. Key Information—D. Risk Factors—Risks Relating to Argentina .”
Management review of 2024 and outlook
Review
Devaluation of the Argentine peso against the U.S. dollar during 2024, from Ps. 808.45 to Ps. 1,032.00 (27.7%), against a 356% devaluation for the year 2023 against 2022.Although inflation, measured by the CPI, decreased significantly during 2024 compared to 2023, it has had a negative impact on our costs and profitability. This impact has been mitigated by the tariff increase in the natural gas transportation segment according to the 2024 Transitional Agreement.
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During 2024, our financial position has remained stable and, as discussed in “B. Liquidity and capital resources”, cash flow from operations has been sufficient to finance our capital expenditures for 2024. Additionally, with a focus on prudent management of our capital structure and preserving our financial position, on July 24, 2024, we issuance the 2031 Notes, with a nominal value of US$ 490,000,000, we canceled all of the 2018 Notes that were due in May 2025.
Although during 2024 the exchange restrictions have been gradually relaxed, during 2024 we incurred new indebtedness with well-known financial institutions of Ps. 65,800 million (US$ 55.7 million) and repaid Ps. 106,598 million (US$ 90.5 million) in order to cancel goods and services imports. For additional information regarding the new indebtedness incurred during 2024 see “B. Liquidity and capital resources. Description of indebtedness” below.
We have allocated our short-term investment in financial instruments to protect our financial position from inflation and devaluation by increasing our position in financial assets at amortized cost and measured at fair value through profit or loss.
Notwithstanding the above, we cannot assure that the evolution of inflation and other macroeconomic variables will not have an adverse effect on our financial position and results of operations. For further information, see “ Item 3. Key Information—D. Risk Factors ”.
In addition to the above-mentioned respect of the impact of the devaluation of the Argentine peso on our foreign currency liability position, as of December 31, 2024, there have not been material changes to our Statement of Financial Position compared to December 31, 2023.
For further information, see “ Discussion of results of operations for the years ended December 31, 2024 and 2023 ” below.
Outlook and other material events that may impact in our financial condition
Since April 3, 2024, we received a transitional tariff increase of 675% and a monthly increase calculated in accordance with the Transitional Adjustment Index. In 2025, we expect to conclude negotiating with ENARGAS the tariffs adjustments under the RQT process that will allow us to obtain a fair and reasonable tariff. See “Item 4. Our Information—B. Business Overview—Natural Gas Transportation—Tariff Situation ” for more information.
Regarding the Liquids Production and Commercialization segment, the global inflationary context and increase in NGL costs, are expected to increase the volatility in international reference prices. Additionally, as a result of the increase in sea freight costs, the prices at which our products are exported are foreseen to be subject to reduced margins, which could negatively impact the operating margins of the Liquids business segment. This situation would be offset by better prices for gas acquired as RTP.
On March 7, 2025, unprecedented heavy rains—without any statistical precedent in the last 100 years—fell on the city of Bahía Blanca and surrounding areas, causing widespread flooding across urban and adjacent regions (the “Event”).
The Event caused the Saladillo García stream to overflow, flooding the Cerri Complex, which resulted in the paralysis of liquids production and partially affected natural gas transportation services. It is also worth noting that the external electric distribution system, as well as the electric generation and distribution facilities of the installation, were impacted.

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On March 24, 2025, the natural gas transportation service was restored with no significant impact in the natural gas transportation revenues.
Regarding the Cerri Complex, as previously mentioned, Liquids production has been interrupted between March 7, 2025 and the issuance date of these consolidated financial statements. A gradual resumption of operations and production may be possible in the coming days, depending on the resolution of infrastructure issues. TGS is carrying out cleanup efforts and prioritizing getting the plant back to full operation as soon as possible.
The Company is currently assessing the full impact of these events and implementing measures to minimize disruption. Based on the current state of recovery efforts and the damages, for the three-month period ended March 31, 2025, the Company has recorded a loss of Ps. 14,058,433, corresponding to expenses related to the event and impairment charges for materials and other property, plant, and equipment. At this stage, the final cost of the event has not yet been determined. For reference, January to March daily production of liquids average amounts to approximately 3,400 tons.
Subject to the terms and conditions of the policies and any applicable sub-limits, the Company has property damage and business interruption insurance coverage. The property damage deductible is US$1 million, and the business interruption coverage includes a 60-day waiting period for Liquids Production and Commercialization business segment. As of the date of issuance of these consolidated financial statements, the Company is negotiating with insurers; these negotiations are still at a preliminary stage, so the ultimate amount and timing of insurance proceeds have not been determined yet.
Additionally, Argentina’s macroeconomic challenges, along with the global geopolitical situation, could pose significant challenges for the realization of our investment projects, obtaining sources of financing, and the prices of goods and services we acquire for operations.
To prepare for our long-term growth, we expect to continue focusing on Vaca Muerta and exploring alternatives that will allow us to profit from our investments and to increase our portfolio of services.
New accounting pronouncements adopted after January 1, 2024, and pronouncements not yet effective as of December 31, 2024
For more information, see Note 4.a New IFRS accounting standards to our Financial Statements.
Discussion of Results of Operations for the Years Ended December 31, 2024 and 2023
The following table presents a summary of our consolidated results of operations for the years ended December 31, 2024 and 2023, stated in millions of pesos, and the increase or decrease and percentage of change between the periods presented:
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Year ended December 31,
2024
2023
Variation
Percentage of change
(In millions of pesos)
Revenues
1,219,766
986,053
233,714
23.7
Net costs of sales
(575,240
)
(620,073
)
44,833
(7,2
)
Gross profit
644,526
365,980
278,546
76.1
Administrative and selling expenses
(124,667
)
(110,770
)
(13,897
)
12.5
Reversal of Impairment of PPE
39,625
-
39,625
n/a
Other operating results
815
(1,652
)
2,468
(149.3
)
Operating profit
560,299
253,558
306,742
121.0
Net financial results
21,560
(158,490
)
180,050
(113.6
)
Share of profit / (loss) from associates
244
(66
)
310
(468.3
)
Income tax expense
(211,939
)
(43,788
)
(168,152
)
384.0
Total comprehensive income for the year
370,163
51,214
318,950
622.8
Year 2024 Compared to Year 2023
Total comprehensive income
For the year ended December 31, 2024, we reported a total net income and a total comprehensive income of Ps. 370,163 million, which represents a Ps. 318,950 million increase compared to the total comprehensive income of Ps. 51,214 million reported in 2023.
The material factors affecting total comprehensive income were as follows:

•
Revenues to third-parties reached Ps. 1,219,766 million in 2024, which represents a Ps. 233,714 million increase compared to the 2023 fiscal year. This increase was mainly due to higher in the Natural Gas Transportation business segments revenues of Ps. 225,426 million. For more information see Item 5. Operating and Financial Review and Prospects —A. Operating Results—Regulated Natural Gas Transportation Segment and Liquids Production and Commercialization. ”

•
Net cost of sales, including depreciation of PPE, reached Ps. 575,240 million in 2024, which represents a Ps. 44,833 million decrease compared to the 2023 fiscal year. This decrease was mainly due to Ps. 73,233 million reduction in the cost of natural gas processed in the Cerri Complex (mainly due a decrease in price, measured in current pesos). These effects were partially offset by an increase in the labor cost by Ps. 4,981 million, PPE maintenance by Ps. 11,213 million and technical operator assistance fee by Ps. 13,169 million.

•
Administrative and selling expenses were Ps. 124,667 million in 2024, which represents a Ps. 13,897 million increase compared to the 2023 fiscal year. This increase was mainly due to higher tax on exports and turnover tax by Ps. 11,666 million, and professional services fees by Ps. 3,593 million. These effects were partially offset, principally, by a decrease in depreciation of PPE by Ps. 2,787 million.

118
During 2024, subsidies increased by Ps. 699 million, this mainly driven by the increase in international prices. For more information see “ Item 4. Our Information—B. Business Overview—Liquids Production and Commercialization .”
Net cost of sales for the years ended on December 31, 2024 and 2023, represented 47.2% and 62.9%, respectively, of revenues reported in the corresponding year.
Administrative and selling expenses for the years ended on December 31, 2024 and 2023, represented 10.2% and 11.2%, respectively, of net revenues reported in the corresponding year.
Share of profit / (loss) from associates
For the year ended December 31, 2024, we recorded a profit from our investment in associates of Ps. 244 million, compared to the loss of Ps. 66 million recorded in 2023.
Net Financial Results
In accordance with IAS 29 we presented the financial results in gross terms considering the effects of the change in the currency purchasing power in a single separate line (“Gain on monetary position”). Gains and losses from monetary positions represent the effects of inflation on our monetary liabilities and assets, respectively.
Net financial results for the years ended December 31, 2024 and 2023, are as follows:
Year ended December 31,
2024
2023
(in millions of pesos)
Financial income
Interest income
23,245
52,676
Foreign exchange gain
92,951
588,432
Subtotal
116,195
641,108
Financial expenses
Interest expense
(55,710
)
(53,630
)
Foreign exchange loss
(151,769
)
(1,043,252
)
Subtotal
(207,480
)
(1,096,882
)
Other financial results
Fair value gain on financial instruments through profit and loss
179,618
426,400
Other financial charges
(17,367
)
(6,035
)
Subtotal
162,251
420,365
Loss on monetary position
(49,407
)
(123,081
)
Total
21,560
(158,490
)
In accordance with the provisions of IAS 29, we opted to present the gain on the monetary position in a single line included in the financial results. This presentation implies that the nominal values of the financial results have been adjusted for inflation. The real values of financial results are different from the components of financial results presented above.
For fiscal year 2024, the net financial gain increased by Ps. 180,050 million compared to the prior year. This positive variation is mainly due to higher positive net foreign exchange difference of Ps. 396,001 million.
119
The peso/US dollar exchange rate ended at a value of Ps. 1,032.00 per US dollar as of December 31, 2024, representing an increase of 27.65% (or Ps. 223.55 per US dollar) compared to the exchange observed as of December 31, 2023. As of December 31, 2023, such rate increased by 356% (or Ps. 631.29 per US dollar) respect to the exchange rate as of December 31, 2022. Our net liability position in US dollars decrease in 2024.
Likewise, we recorded a loss on net monetary position of Ps. 49,407 million compared with the loss of Ps. 123,081 million in 2023, represented a positive variation of Ps. 73,674 million as a consequence of the deceleration of inflation and the net liability monetary position.
The effects mentioned above were partially offset by the negative variation in results generated by financial assets of Ps. 246,782 million.
Income tax expense
Income tax for fiscal year 2024 was an expense of Ps. 211,939 million, compared to the expense of Ps. 43,788 million in fiscal year 2023. The higher income tax charge was primarily due to the increase in taxable income in fiscal year 2024.
The following table sets forth revenues and operating income for each of our business segments for the years ended December 31, 2024 and 2023:
120
Year ended December 31,
Year ended December 31, 2024
compared to year ended December
31, 2023
2024
2023
Variation
Percentage
Change
(in millions of pesos)
Natural Gas Transportation
Revenues
441,126
215,700
225,426
104.5
Intersegment revenues
12,225
6,117
6,108
99.8
Net cost of sales
(214,109
)
(197,658
)
(16,451
)
8.3
Gross profit
239,242
24,159
215,083
890.3
Administrative and selling expenses
(59,002
)
(49,028
)
(9,974
)
20.3
Other operating income / (expense)
587
(1,771
)
2,358
(133.1
)
Reversal of Impairment of PPE
39,625
-
39,625
n/a
Operating profit / (loss)
220,453
(26,640
)
247,093
(927.5
)
Liquids Production and Commercialization
Revenues
556,662
577,973
(21,311
)
(3.7
)
Net cost of sales
(290,378
)
(352,653
)
62,275
(17.7
)
Gross profit
266,285
225,321
40,964
18.2
Administrative and selling expenses
(42,377
)
(38,390
)
(3,988
)
10.4
Other operating expense
(752
)
(169
)
(583
)
345.7
Operating profit
223,155
186,762
36,393
19.5
Midstream
Revenues
215,735
186,438
29,298
15.7
Net cost of sales
(78,099
)
(71,003
)
(7,096
)
10.0
Gross profit
137,637
115,435
22,202
19.2
Administrative and selling expenses
(22,002
)
(22,115
)
113
(0.5
)
Other operating income
981
288
693
241.0
Operating profit
116,616
93,607
23,008
24.6
Telecommunications
Revenues
6,242
5,942
300
5.1
Net cost of sales
(4,880
)
(4,876
)
(4
)
0.1
Gross profit
1,362
1,066
296
27.8
Administrative and selling expenses
(1,286
)
(1,238
)
(49
)
3.9
Operating (loss) / profit
76
(172
)
248
(144.0
)


Regulated Natural Gas Transportation Segment
The Natural Gas Transportation business segment represented 36% and 22% of our total revenues during the years 2024 and 2023, respectively. Natural Gas Transportation revenues are derived mainly from firm contracts, under which pipeline capacity is reserved and paid for regardless of actual usage by the shipper. We also provide interruptible natural gas transportation services subject to availability of the pipeline capacity. In addition, we render operation and maintenance services for the Natural Gas Transportation facilities, which belong to certain gas trusts created by the Government to expand the capacity of the Argentine natural gas transportation pipeline system. This business segment is subject to ENARGAS regulation.
121
For additional information regarding the history of our discussions with various governmental authorities in relation to the adjustment of our gas transportation tariffs see “ Item 4. Our Information—B. Business Overview—Natural Gas Transportation—Regulatory Framework. ”
During 2024, the Natural Gas Transportation business segment recorded an operating profit of Ps. 220,453 million, compared to the operating loss of Ps. 26,640 million recorded in 2023. The main factors that affected the results of operations of this segment compared to 2024 are the following:

•
Revenues from the Natural Gas Transportation business segment increased by Ps. 231,534 million for the year 2024 compared to 2023.

•
During 2024, we had received a nominal tariff increase of 791%.

•
Revenues related to natural gas firm transportation contracts for the year ended December 31, 2024, increased by Ps. 193,360 million for the year 2024 compared to 2023, as we had received a nominal tariff increases of 791%. See “Item 4. Our Information—B. Business Overview—Natural Gas Transportation—Regulatory Framework—Regulation of Transportation Rates—Actual Rates” for additional information.

•
Revenues related to interruptible natural gas transportation service increased by Ps. 23,564 million for the year 2024 compared to 2023. The increase mainly resulted from tariff increase discussed above and higher volumes dispatched.

•
Revenues relating to the Access and charged (“CAU”) increased by Ps. 8,502 million for the year 2024 compared to 2023 primarily as a result of the same tariff effect. The value of the CAU is much lower than the transportation tariff we are permitted to charge for our natural gas transportation services, because we were not required to make any investment in the construction and expansion of the assets to which the CAU relates. See “ Item 4. Our Information—B. Business Overview—Natural Gas Transportation—Pipeline Operations—Pipeline Expansions ” for additional information regarding the CAU.

•
Costs of sales, administrative and selling expenses for the year ended December 31, 2024 increased by Ps. 26,425 million, from Ps. 246,686 million to Ps. 273,111 million, as compared to the year ended December 31, 2023. This increase was mainly attributable to higher labor costs of Ps. 3,081 million, third parties’ services received by Ps. 2,203 million, technical operator assistance fees by Ps.9,507 million, taxes and contributions by Ps. 9,373 million and PPE maintenance by Ps. 9,318 million. These effects were partially offset by lower depreciations of Ps. 2,833 million, and license fee of Ps. 2,990 million.

•
During 2024, we recorded a reversal of a previously recorded impairment of PPE by Ps. 39,625 million.

•
During 2024 we recorded other operating income by Ps. 587 million, compared to the loss recorded in 2023. The positive variation was mainly due to the reversal of provision for contingencies.
122
Current tariffs
On December 14, 2023, through Resolution N° 704/2023 ENARGAS summoned a Public Hearing to be held on January 8, 2024 with the objective of addressing a transitory tariff adjustment. As a result of said hearing, on February 15, 2024 ENARGAS Resolution N° 52/2024 was issued, by means of which the validity of the Public Hearing was ratified and ENARGAS stated that the transitory tariff charts that arose from the Hearing would be issued within 30 working days as from the date of said Resolution.
Alongside these events, on December 16, 2023, Decree N° 55/2023 was issued, by means of which the Argentine national energy sector’s state of emergency was declared until December 31, 2024. Among other issues, this Decree: (i) stipulated the commencement of the five-year tariff review process, (ii) dictated the intervention of ENARGAS as from January 1°, 2024 and (iii) instructed the Secretariat of Energy to issue the regulations and procedures required to sanction market prices for the natural gas transportation service. Decree Nº 1023/2024 dictated the coming into force of the tariff charts resulting from the tariff review based on the stipulations of Decree N° 55/23, which should not be later than July 9, 2025.
On March 26, 2024, we entered the 2024 Transitory Agreement with ENARGAS, which outlined a transitory adjustment of 675% in natural gas transportation tariffs. This tariff increase came into effect on April 3, 2024, after the issuance of Resolution 112. In line with Resolution 112, as from May 2024 and until the Tariff Review Process has been completed, tariffs would be monthly adjusted by a composite index (the “Transitory Composite Index”) made up as follows:

•
By the Salary Index in a 47%– Registered Private Sector issued by the INDEC.

•
By the WPI in a 27.2%; and

•
By the INDEC Construction Cost Index of Greater Buenos Aires-Materials section in the remaining 25.8%–
For the purposes of such adjustment, ENARGAS indicated that it would issue the corresponding monthly resolution, adjusting the tariff charts to be applied. In addition, this new transitory agreement eliminates the restriction on the payment of dividends previously contained.
During the months from May to July 2024, ENARGAS informed the Company that it would delay the implementation of the monthly tariff adjustment. It also notified us that it would replace the monthly adjustment methodology mentioned above for the remainder of the 2024. Based on said ENARGAS notice, the monthly tariff increase would be based on expected inflation, to be estimated by the Ministry of Economy for said period.
Also, on July 1, ENARGAS again informed the Company of the postponement of the monthly tariff increase, this time corresponding to the month of July, maintaining the tariff charts in effect as from April 3, 2024.
Therefore, throughout the 2024 and the period elapsed in 2025, the Company received tariff increases of 675%, 4%, 1%, 2,7%, 3,5%, 3%, 2,5%, 1,5% and 1.7% effective as from April 3, August 1, September 2, October 1, November 4, December 4 of 2024, January 1, February 1 and March 6 of 2025, respectively.
Within the framework of the Five-Year Tariff Review process, on January 14, 2025, ENARGAS, through Resolution N° 16/2025, summoned a public hearing that was celebrated on February 6, 2025. The aim of said hearing was to submit for consideration, among other issues, the Natural Gas Transportation and Distribution Five-Year Tariff Review, as well as the periodic adjustment of the natural gas transportation and distribution tariffs.
123
At said hearing, we presented, among other issues, its 2025-2029 Five-Year Expenses and Investments Plan, the Capital Base and the WACC proposal (9.98% in real terms, after tax). Taking into account the tariff calculation methodology and the mentioned parameters, we requested a tariff increase of 22.7% with regard to the tariffs effective as of January 2025. We also presented alternative tariff adjustment methodologies:

•
WPI, or

•
A polynomial formula based on information issued by the INDEC:

•
30% WPI,

•
40% of total registered salary index, and

•
30% of construction cost index, materials sector.
As of the date of the issuance of this Annual Report, ENARGAS has not issued the resolution that concludes the Five-Year Tariff Review, granting the requested tariff increase and outlining the framework under which the natural gas transportation activity will be carried out during the 2025-2029 five-year term. However, at the public hearing, ENARGAS proposed the application of a WACC rate of 7.18% (in real term, after tax), and a periodic adjustment proposal made up by 50% CPI and 50% WPI.
Regarding the License, the original term of the natural gas transportation system operation license would expire in December 2027 but could be extended by the Executive Branch for an additional term of 10 years, as long as certain technical conditions outlined therein are met. On September 8, 2023, we presented a request to ENARGAS to start the procedure outlined under Section 6 of the Natural Gas Law N° 24,076 for the renewal of the mentioned license.
Additionally, in accordance with the provisions of the Law of Bases, the mentioned extension of 10 years has been increased to 20 years.
On June 13, 2024, ENARGAS issued a technical and legal report indicating that we have fully met its obligations regarding the License. Said report entitled an ENARGAS controller —after the non-binding Public Hearing held on October 21, 2024— to issue the recommendation report to be presented to the Executive Branch so that the latter may finally grant the license extension. Upon the presentation of ENARGAS recommendation, the Executive Branch has the deadline of 120 business days to issue the decree extending the license.
Liquids Production and Commercialization Segment
Unlike the Natural Gas Transportation segment, revenues of the Liquids Production and Commercialization segment are not subject to full regulation by ENARGAS and the Ministry of Energy. However, in recent years, the Government has enacted a number of laws and regulations that have limited our ability to receive the full international market prices for all of the liquids that the Cerri Complex produces. In addition, ENARGAS has the ability to redirect the volumes of natural gas in the system to cover certain uses and that may result in lower volumes of natural gas to be processed in the Cerri Complex. See “Item 4. Our Information—B. Business Overview—Liquids Production and Commercialization—Regulation ” for more information.
The Liquids Production and Commercialization segment represented 46% and 59% of our total revenues during the years ended December 31, 2024, and 2023, respectively. Liquids Production and Commercialization activities are conducted at the Cerri Complex, which is located near Bahía Blanca and is connected to each of our main pipelines. At the Cerri Complex, we recover ethane, LPG and natural gasoline for our own account, on behalf of our customers and on a fee basis, collecting a commission for the extracted Liquids delivered to our customers.
124
For the fiscal years 2024 and 2023, all of our sales were made for our own account.
All ethane produced by our Liquids segment in the years ended December 31, 2024 and 2023 was sold locally to PBB. Our ethane sales for the years 2024 and 2023 represented 24.6% and 38.1% of our Liquids Production and Commercialization net revenues.
In 2024, we sold 48.5% of our production of LPG in the local market to LPG marketers, compared to 60,6% in 2023, with the remainder exported to LPG traders. In addition, all natural gasoline produced during 2024 and 2023 was exported. For more information about these contracts, see “ Item 4. Our Information—B. Business Overview—Liquids Production and Commercialization. ”
The total annual sales for the Cerri Complex for 2024 and 2023 in tons were as follows:
Years ended December 31,
Year ended December 31, 2024
compared to year ended December
31, 2023
(volumes in tons)
(volumes in tons)
2024
2023
Increase/
(Decrease)
Percentage
Change
Local Market
Ethane
309,894
394,370
(84,476
)
(21.4
)
Propane
201,257
209,058
(7,801
)
(3.7
)
Butane
154,760
165,377
(10,617
)
(6.4
)
Subtotal
665,911
768,805
(102,894
)
(13.4
)
Exports
Propane
192,412
160,625
31,787
19.8
Butane
111,363
70,484
40,879
58.0
Natural Gasoline
107,664
129,272
(21,608
)
(16.7
)
Subtotal
411,439
360,381
51,058
14.2
Total Liquids
1,077,350
1,129,186
(51,836
)
(4.6
)
Export revenues from our Liquids Production and Commercialization segment command a price premium, as compared to our domestic market sales, primarily as a result of regulation of domestic prices See “ Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Exports. ”
For the years ended December 31, 2024 and 2023, the total accrued exports withholding amounted to Ps. 23,127 million and Ps. 17,934 million, respectively.
In the domestic market, the Secretary of Energy continued issuing a series of measures with the aim of reducing the impact of the subsidies in public accounts in order to reduce the negative impact that the participation in the Households with Bottles Program and Propane for Networks Agreement have in the results of operations of natural gas liquids producers. These measures include an increase in the sales price from selling LPG bottles the above-mentioned agreements.
125
The sales prices under the program for fiscal years 2024 was as follows:
Resolution Nro.
Period
Ps. Per ton (at values
determined by each
resolution)
762/23
September 2023 to January 2024
Ps. 50,938
11/24
February 2024 to August 2024
Ps. 137,838
216/24
September 2024 to November 2024
Ps. 240,000
394/24
As from December 2024
Ps. 420,000
In the past, participation in this program forces tgs to commercialize LPG volumes required by the controlling entity at prices below to market values and under certain circumstances at prices lower than their processing cost. Since January 24, 2025 after the enactment of Resolution N° 15/2025 by the SE, which outlines that as from such date the maximum sale price for the products supplied under the Households with Bottles Program is to be eliminated (the maximum sale price was the export parity issued monthly by the SE under the framework of the Law N° 26,020). Although said resolution maintains the obligation of LPG producers to supply the domestic market, it eliminates the product supply contributions formerly effective.
The terms of Propane for Networks Agreement outlined compensations to be paid by the Argentine Government to the participants, calculated as the difference between the price at which propane is commercialized under this agreement and the export parity issued monthly by the Secretariat of Energy. However, there have been significant delays in the collection of the mentioned compensation. Its overdue balance as of December 31, 2024 was of Ps. 10,882 million. The agreement stipulates those payments shall be conducted through fiscal credit certificates to be used by the producers for the payment of hydrocarbon export rights. As of this date, the certificates corresponding to the deliveries conducted in the year 2024 have not been issued yet.
Outside the supply programs mentioned above, in the local market, we sold 160,697 tons of propane and 2,828 tons of butane mainly to the fractionating market and to a lesser extent to the industrial, propellant and automobile segments.
In 2024, we continued commercializing ethane, under a long-term agreement entered with PBB. This agreement contemplates similar terms to the ones agreed in the previous one, but involves improvements in the take or pay clause of annual compliance, which ensures us an increase in our sales volume to be implemented gradually over the first five years of the agreement. In the year 2024, ethane tons sold to PBB slightly went up to 309,894 tons, from the 394,370 tons recorded in 2023.
See “ Item 4. Our Information—B. Business Overview—Competition—Liquids Production and Commercialization—Regulation—International Market. ” for additional information.
During 2024 the Liquids Production and Commercialization business segment recorded operating profit of Ps. 223,155 million, compared to Ps. 186,762 million in 2023. The main factors that affected the results of operations for this segment compared to 2023 were the following:
126

•
Revenues decreased by Ps. 21,311 million for the year 2024 compared to 2023. This negative effect was mainly due to the negative real exchange rate variation by Ps. 2,250 million, lower volumes of natural gasoline and ethane shipped by Ps. 52,929 million, lower ethane price by Ps. 44,905 million. These effects were partially offset by higher volumes of propane and butane dispatched by Ps. 40,133 million and international benchmark prices by Ps. 33,585 million.

•
Subsidies decreased by Ps. 5,401 million in the year 2024 compared with 2023.

•
In 2024 propane, butane and natural gasoline average export prices recorded increases of 8%, 10% and 3%, respectively, compared to 2023.

•
During 2024, the production of Liquids reached 1,077,350 tons (51,836 tons lower than in 2023).

•
It should be noted that there were no production restrictions during the winter period, as a result of a greater supply of local gas due to non-conventional gas developments.

•
Notwithstanding the changes made to the Households with Bottles Program to supply LPG to the domestic market described above, most of the year 2024 we sold this product to a lower price negatively affecting our result of operations.

•
Net cost of sales, administrative and selling expenses for the year ended December 31, 2024, decreased by Ps. 58,287 million, to Ps. 332,755 million from Ps. 391,042 million, as compared to the year ended December 31, 2023. This decrease was mainly due to lower cost of natural gas purchased as RTP of Ps. 73,233 million (principally as a consequence of the decrease in the price of the natural gas). These effects were partially offset higher: (i) taxes on exports by Ps. 5,193 million, (ii) labor costs by Ps. 892 million and (iii) third parties’ services received by Ps. 4,460 million

•
Other operating expenses increased by Ps. 583 million.
In 2024, export revenues from the Liquids Production and Commercialization segment were Ps. 284,586 million and accounted for 23% (21% in 2023) of total revenues and 51% (36% in 2023) of total Liquids Production and Commercialization revenues.
In 2024, we exported propane and butane at spot prices, which allowed us to capture opportunities associated with different market niches, allowing us to considerably increase the individual fixed prices of each operation.
We sold our LPG exports at spot prices and to the date of this Annual Report, we are under negotiations for new agreements.
In 2024, we continued commercializing LPG by truck, dispatching roughly 14,389 trucks (331,751 tons) loaded with our own product, compared to the approximately 15,518 trucks (379,544 tons) of our own product dispatched in 2023. Trucks dispatches are basically carried out to meet our domestic demand but also allow us to export our products to neighboring countries. Although their volumes are substantially lower than the exports conducted by sea, they capitalize a higher operative margin and increase our clients’ portfolio.
We continued rendering logistic services at Puerto Galvan facilities in a successful manner. It is important to highlight that thanks to the high level of commitment of our people and the operative efficiency of our facilities, we could beat the daily record of the number of trucks dispatched from the Galván Plant in the month of July 2024.
127
This year, propane and butane deliveries overseas were conducted in a spot modality, seizing opportunities related to different markets’ niches, which allowed us to increase considerably the fixed premiums of each transaction.
We also keep strengthening our positioning in the Brazilian market, which will delineate a 2025 goal, maintaining our sea exports in a direct modality (with no go-betweens) to Brazilian LPG distributors.
Natural gasoline exports throughout the year 2024 were conducted within the framework of an agreement entered with Trafigura Pte Ltd at an international price, less a discount, for a term of 2 years (February 2024-February 2026)
As mentioned above international prices presented a stable trend in 2024, rising in the first quarter with some slight month-over-month contractions and then returning to a rising trend in the last quarter. In the short term, international prices are expected to show a rising trend.
Midstream
This segment includes midstream services. Midstream services include natural gas treatment, separation and removal of impurities from the natural gas stream and compression services, which are generally rendered to the natural gas producers at the wellhead, transportation and conditioning services in Vaca Muerta, as well as activities, related to construction, operation and maintenance of pipelines and compressor plants.
During 2024, the Midstream business segment recorded an operating profit of Ps. 116,616 million, which represents a Ps. 23,008 million increase compared to Ps. 93,607 million in 2023. The main factors that affected the results of operations of this segment during 2024 are the following:

•
Revenues increased by Ps. 29,298 million primarily due to: (i) higher natural gas transportation and conditioning services in Vaca Muerta for Ps. 31,772 million. These effects were partially offset by the decrease in the real exchange rate on revenues denominated in U.S. dollars for Ps. 776 million, compression of natural gas services by Ps. 1,513 million and lower operation and maintenance services rendered by Ps. 571 million.

•
Costs of sales, administrative and selling expenses increased by Ps. 6,983 million, mainly due to the increase in: (i) labor costs by Ps. 1,984 million, (ii) repair and maintenance expenses by Ps. 3,003 million and (iii) Technical operator assistance fees by Ps. 1,782 million.
Telecommunications
Telecommunication services are rendered by our subsidiary, Telcosur. During 2024, the Telecommunications business segment recorded an operating profit of Ps. 76 million, compared to a loss of Ps. 172 million in 2023. The main factors that affected the results of operations of this segment during 2024 are the following:

•
Revenues increased by Ps. 300 million in the year ended December 31, 2024, when compared to 2023.

128

•
Costs of sales, administrative and selling expenses increased by Ps. 53 million in the year ended December 31, 2024, when compared to 2023, mainly due to lower labor costs and third party services.
Year 2023 Compared to Year 2022

Year ended December 31,
2023
2022
Variation
Percentage of
change
(in millions of pesos)
Revenues
986,053
1,115,696
(129,643
)
(11.6
)
Net costs of sales
(620,073
)
(651,289
)
31,216
(4.8
)
Gross profit
365,980
464,407
(98,427
)
(21.2
)
Administrative and selling expenses
(110,770
)
(108,217
)
(2,554
)
2.4
Other operating results
(1,652
)
(519
)
(1,134
)
218.5
Operating profit
253,558
355,672
(102,114
)
(28.7
)
Net financial results
(158,490
)
(21,428
)
(137,062
)
639.6
Share of (loss) / profit from associates
(66
)
611
(677
)
(110.8
)
Income tax expense
(43,788
)
(115,697
)
71,910
(62.2
)
Total comprehensive income for the year
51,214
219,158
(167,944
)
(76.6
)
Total comprehensive income
For the year ended December 31, 2023, we reported a comprehensive income of Ps. 51,214 million, which represents a Ps. 167,944 million decrease compared to the total comprehensive income of Ps. 219,158 million reported in 2022.
The material factors affecting total comprehensive income were as follows:

•
Revenues to third-parties reached Ps. 986,053 million in 2023, which represents a Ps. 129,643 million decrease compared to the 2022 fiscal year. This decrease was mainly due to the reduction in the Liquids Production and Commercialization and Natural Gas Transportation business segments revenues of Ps. 128,742 million and Ps. 59,916 million, respectively.

•
Net cost of sales, including depreciation of PPE, reached Ps. 620,073 million in 2023, which represents a Ps. 31,216 million decrease compared to the 2022 fiscal year. This decrease was mainly due to: (i) 41,914 the reduction in the cost of natural gas processed in the Cerri Complex (mainly due a decrease in price, measured in current pesos) and (ii) technical operator assistance fee by Ps. 7,563 million. These effects were partially offset by an increase in the labor cost by Ps. 7,108 million and third parties services by Ps.4,197 million.

•
Administrative and selling expenses were Ps. 110,770 million in 2023, which represents a Ps. 2,554 million increase compared to the 2022 fiscal year. This increase was mainly due to higher: (i) labor costs by Ps. 4,217 million, and (ii) professional services fees by Ps. 6,710 million These effects were partially offset, principally, by a decrease in taxes and contributions by Ps. 6,892 million (reduction in tax on exports and turnover tax).
129
During 2023, subsidies decreased by Ps.18,123 million, this mainly driven by the decrease in international prices, the lack of updating and the measures issued by the government to reduce them during 2023. For more information see “ Item 4. Our Information—B. Business Overview—Liquids Production and Commercialization .”
Net cost of sales for the years ended on December 31, 2023 and 2022, represented 62.9% and 58.4%, respectively, of net revenues reported in the corresponding year.
Administrative and selling expenses for the years ended on December 31, 2023 and 2022, represented 11.2% and 9.7%, respectively, of net revenues reported in the corresponding year.
Share of (loss) / profit from associates
For the year ended December 31, 2023, we recorded a loss from our investment in associates of Ps. 66 million, compared to the profit of Ps. 611 million recorded in 2022.
Net Financial Results
In accordance with IAS 29 we presented the financial results in gross terms considering the effects of the change in the currency purchasing power in a single separate line. Gains and losses from monetary positions represent the effects of inflation on our monetary liabilities and assets, respectively.
Net financial results for the years ended December 31, 2023 and 2022, are as follows:
Year ended December 31,
2023
2022
(in millions of pesos)
Financial income
Interest income
52,676
12,440
Foreign exchange gain
588,432
189,486
Subtotal
641,108
201,926
Financial expenses
Interest expense
(53,630
)
(46,103
)
Foreign exchange loss
(1,043,252
)
(353,348
)
Subtotal
(1,096,882
)
(399,450
)
Other financial results
Notes repurchase results
-
(6,986
)
Fair value gain on financial instruments through profit and loss
426,400
163,619
Derivative financial instruments results
-
(865
)
Other financial charges
(6,035
)
(5,225
)
Subtotal
420,365
150,543
(Loss) / gain on monetary position
(123,081
)
25,554
Total
(158,490
)
(21,428
)
In accordance with the provisions of IAS 29, we opted to present the gain on the monetary position in a single line included in the financial results. This presentation implies that the nominal values of the financial results have been adjusted for inflation. The real values of financial results are different from the components of financial results presented above.
130
For fiscal year 2023, the net financial loss increased by Ps. 137,062 million compared to the prior year. This negative variation is mainly due to higher negative net foreign exchange difference of Ps.290,958 caused by the devaluation that occurred in mid-December 2023.
The peso/US dollar exchange rate ended at a value of Ps. 808.45 per US dollar as of December 31, 2023, representing an increase of 356% (or Ps. 631.29 per US dollar) compared to the exchange observed as of December 31, 2022. As of December 31, 2022, such rate increased by 72% (or $74.44 for each US dollar) respect to the exchange rate as of December 31, 2021. Our net liability position in US dollars decrease in 2023.
Likewise, we recorded a loss on net monetary position of Ps. 123,081 million as opposed with the gain of Ps. 25,554 million represented a negative variation of Ps. 148,635 as a consequence of the acceleration of inflation and the net asset monetary position.
The effects mentioned above were partially offset by the positive variation in results generated by financial assets of Ps. 262,781.
Income tax expense
Income tax for fiscal year 2023 was an expense of Ps. 43,788 million, compared to the expense of Ps. 115,697 million in fiscal year 2022. The lower income tax charge was primarily due to the decrease in taxable income in fiscal year 2023.
The following table sets forth revenues and operating income for each of our business segments for the years ended December 31, 2023 and 2022:
131
Year ended December 31,
Year ended December 31,
2023 compared to year
ended December 31, 2022
2023
2022
Variation
Percentage
Change
Natural Gas Transportation
Revenues
215,700
275,617
(59,916
)
(21.7
)
Intersegment revenues
6,117
7,899
(1,781
)
(22.6
)
Net cost of sales
(197,658
)
(199,080
)
1,422
(0.7
)
Gross profit
24,159
84,435
(60,276
)
(71.4
)
Administrative and selling expenses
(49,028
)
(49,165
)
137
(0.3
)
Other operating expense
(1,771
)
(1,223
)
(548
)
44.9
Operating profit
(26,640
)
34,047
(60,687
)
(178.2
)
Liquids Production and Commercialization
Revenues
577,973
706,715
(128,742
)
(18.2
)
Net cost of sales
(352,653
)
(398,639
)
45,986
(11.5
)
Gross profit
225,321
308,076
(82,755
)
(26.9
)
Administrative and selling expenses
(38,390
)
(44,535
)
6,145
(13.8
)
Other operating (expense) / income
(169
)
257
(426
)
(165.6
)
Operating profit
186,762
263,799
(77,037
)
(29.2
)
Midstream
Revenues
186,438
127,130
59,308
46.7
Net cost of sales
(71,003
)
(57,015
)
(13,988
)
24.5
Gross profit
115,435
70,115
45,319
64.6
Administrative and selling expenses
(22,115
)
(13,319
)
(8,796
)
66.0
Other operating income
288
447
(159
)
(35.6
)
Operating profit
93,607
57,243
36,364
63.5
Telecommunications
Revenues
5,942
6,235
(293
)
(4.7
)
Net cost of sales
(4,876
)
(4,454
)
(422
)
9.5
Gross profit
1,066
1,781
(715
)
(40.1
)
Administrative and selling expenses
(1,238
)
(1,198
)
(40
)
3.3
Operating (loss) / profit
(172
)
582
(755
)
(129.6
)
Regulated Natural Gas Transportation Segment
The Natural Gas Transportation business segment represented 22% and 25% of our total revenues during the years 2023 and 2022, respectively.
For additional information regarding the history of our discussions with various governmental authorities in relation to the adjustment of our gas transportation tariffs see “ Item 4. Our Information—B. Business Overview—Natural Gas Transportation—Regulatory Framework.”
132

•
During 2023, the Natural Gas Transportation business segment recorded an operating loss of Ps. 26,640 million, compared to the operating profit of Ps.34,047 million profits recorded in 2022. The main factors that affected the results of operations of this segment compared to 2023 are the following:

•
Revenues from the Natural Gas Transportation business segment decreased by Ps. 61,698 million for the year 2023 compared to 2022.

•
During 2023, we had only received a nominal tariff increase of 95% as of April 29, 2023 while annual inflation was 211.4%.

•
Revenues related to natural gas firm transportation contracts for the year ended December 31, 2023, decreased by Ps. 54,106 million for the year 2023 compared to 2022, as we had only received a nominal tariff increases of 95% as of April 29, 2023, while the cumulative inflation rate for the Year 2023 was 211.4%.

•
Revenues related to interruptible natural gas transportation service decreased by Ps. 3,316 million for the year 2023 compared to 2022. The decrease mainly resulted from tariff increase discussed above, partially offset by higher volumes dispatched.

•
Revenues relating to CAU decreased by Ps. 2,494 million for the year 2023 compared to 2022 primarily as a result of the same tariff effect.

•
Net cost of sales, administrative and selling expenses for the year ended December 31, 2023 decreased by Ps. 1,559 million, from Ps. 248,245 million to Ps. 246,686 million, as compared to the year ended December 31, 2022. This decrease was mainly attributable to lower depreciation of Ps. 9,240 million and taxes and contributions of Ps. 2,918 million mainly as a consequence of the reduction in turnover tax. These effects were partially offset by higher labor costs of Ps. 5,546 million, third parties services received by Ps. 3,502 million and easements of Ps. 682 million.

•
Other operating expenses decreased by Ps. 548 million for the year 2023 compared to 2022, primarily as a result of lower provision for contingencies.
On March 16, 2023, our Board of Directors approved the 2023 Transition Agreement. This addendum was subsequently ratified by the PEN through Decree No. 250/2023 of April 29, 2023. Previously, on April 27, 2023, ENARGAS issued Resolution No. 186/2023 through which the new tables were published.
Liquids Production and Commercialization Segment
The Liquids Production and Commercialization segment represented 59% and 63% of our total revenues during the years ended December 31, 2023, and 2022, respectively.
For the fiscal years 2023 and 2022, all of our sales were made for our own account.
All ethane produced by our Liquids segment in the years ended December 31, 2023 and 2022 was sold locally to PBB.
Our ethane sales for the years 2023 and 2022 represented 38.1% and 24.6% of our Liquids Production and Commercialization net revenues.
133
In 2023, we sold 60.6% of our production of LPG in the local market to LPG marketers, compared to 50.9% in 2022, with the remainder exported to LPG traders. In addition, all natural gasoline produced during 2023 and 2022 was exported. For more information about these contracts, see “ Item 4. Our Information—B. Business Overview—Liquids Production and Commercialization. ”
The total annual sales for the Cerri Complex for 2023 and 2022 in tons were as follows:
Years ended December 31,
Year ended December 31, 2023
compared to year ended December
31, 2022
(volumes in tons)
(volumes in tons)
2023
2022
Increase/
(Decrease)
Percentage
Change
Local Market
Ethane
394,370
329,232
65,138
19.8
Propane
209,058
215,753
(6,695
)
(3.1
)
Butane
165,377
185,472
(20,095
)
(10.8
)
Subtotal
768,805
730,457
38,348
5.2
Exports
Propane
160,625
194,810
(34,185
)
(17.5
)
Butane
70,484
78,460
(7,976
)
(10.2
)
Natural Gasoline
129,272
125,277
3,995
3.2
Subtotal
360,381
398,547
(38,166
)
(9.6
)
Total Liquids
1,129,186
1,129,004
182
-
For the years ended December 31, 2023 and 2022, the total accrued exports withholding amounted to Ps.17,934 million and Ps.24,816 million, respectively.
The sales prices under the program for fiscal years 2023 and 2022 were as follows:
Resolution Nro.
Period
Ps. Per ton (at values
determined by each
resolution)
15/23
January 2023
Ps. 29,481
62/23
February 2023
Ps. 32,429
168/23
March 2023
Ps. 35,672
326/23
April 2023
Ps. 38,704
391/23
May 2023
Ps. 40,252
391/23
June 2023
Ps. 41,862
391/23
July 2023
Ps. 43,537
391/23
August 2023
Ps. 45,278
762/23
August 2023 to December 2023
Ps. 50,938

134
Participation in this program forces tgs to commercialize LPG volumes required by the controlling entity at prices below to market values and under certain circumstances at prices lower than their processing cost.
Regarding the Propane for Networks Agreement, on August 28, 2023 we signed its twentieth renewal, in effect until December 31, 2023.
Its overdue balance as of December 31, 2023 was of Ps. 10,182 million.  The twentieth renewal stipulates that compensations shall be conducted through fiscal credit certificates to be used by the producers for the payment of hydrocarbon export withholdings. As of this date, said certificates have not been issued.  Beyond the supply programs mentioned above, in the domestic market, we sold 158,794 tons of propane and 1,290 tons of butane mainly to the fractionating market and to a lesser extent to the industrial, propellant and automobile segments.
In the year 2023, ethane tons sold to PBB slightly went up to 394,370 tons, from the 329,232 tons recorded in 2022.
During 2023 the Liquids Production and Commercialization business segment recorded operating profit of Ps. 186,762 million, compared to Ps.263,799 million in 2022. The main factors that affected the results of operations for this segment compared to 2022 were the following:

•
Segment revenues decreased by Ps.128,742 million for the year 2023 compared to 2022. This negative effect was mainly due to the negative real exchange rate variation by Ps. 31,293 million, lower volumes of propane and butane dispatched by Ps. 27,273 million and international benchmark prices by Ps. 111,793 million. These effects were partially offset by higher ethane price by Ps. 19,072 million and higher volumes of natural gasoline and ethane shipped by Ps. 39,115 million.

•
Subsidies decreased by Ps. 18,123 million in the year 2023 compared with 2022.

•
In 2023 propane, butane and natural gasoline average export prices recorded decreases of 30%, 24% and 16%, respectively, compared to 2022.

•
During 2023, the production of Liquids reached 1,129,186 tons (182 tons more than in 2022).

•
It should be noted that there were no production restrictions during the winter period, as a result of a greater supply of local gas due to non-conventional gas developments.

•
Notwithstanding the changes made to the Households with Bottles Program to supply butane to the domestic market described above, our obligations under this program continues to have an adverse impact on this segment, resulting, under some circumstances, in a negative operating margin on domestic sales of LPG.

•
Net costs of sales, administrative and selling expenses for the year ended December 31, 2023, decreased by Ps. 52,131 million, to Ps. 391,042 million from Ps. 443,173 million, as compared to the year ended December 31, 2022. This decrease was mainly due to lower: (i) cost of natural gas purchased as RTP of Ps. 41,914 million (principally as a consequence of the decrease in the price of the natural gas), (ii) taxes and contributions of Ps. 8,992 million (mainly tax on exports and turnover tax) and (iii) third parties services received by Ps. 6,198 million. These effects were partially offset higher: (i) repair and maintenance expenses by Ps. 2,458 million, (ii) labor costs by Ps. 1,705 million and (iii) depreciations by Ps. 932 million.

•
Other operating expenses decreased by Ps. 426 million.

135
In 2023, export revenues from the Liquids Production and Commercialization segment were Ps.207,725 million and accounted for 21% (28% in 2022) of total net sales and 36% (44% in 2022) of total Liquids Production and Commercialization revenues.
In 2023, we exported propane and butane at spot prices, which allowed us to capture opportunities associated with different market niches, allowing us to considerably increase the individual fixed prices of each operation. We sold our LPG exports at spot prices.
As in prior years, in the period from May to September 2023, the sales of these products were conducted mainly in the domestic market, due to the restrictions in natural gas consumption for the production of Liquids and governmental requirements to supply the domestic market within the framework of the programs outlined by the Government for the supply of LPG.
Regarding natural gasoline exports, throughout the year 2023 and until February 2024 we traded such product by means of an agreement entered with Trafigura Pte Ltd at an international price, less a discount. As of the date of the present Annual Report, a new agreement has been entered with Trafigura Pte Ltd., with expiration date in February 2026 and better terms than the previous agreement in force in 2023.
Regarding international reference prices of the products, we export —propane, butane and natural gasoline— they recorded some variations in 2023 compared to the previous year, presenting an uneven trend. During the first months of the year, they increased within the context of commodities prices recovery given the world economy recovery and the energy setbacks that Asia and Europe faced. As from the second quarter of the year prices contracted and stabilized similar to the levels of prices at the closing of 2022 and starting the last 2023 quarter they started to rise again.
In 2023, we continued commercializing LPG by land, dispatching roughly 15,518 trucks (379,544 tons) loaded with our own product, compare to the approximately 16,156 trucks (390,914 tons) of our own product dispatched in 2022. Trucks dispatches are basically carried out to meet our domestic demand but also allow us to export our products to neighboring countries. Although their volumes are substantially lower than the exports conducted by sea, they capitalize a higher operative margin and increase our clients’ portfolio. Propane and butane deliveries overseas were conducted in a spot modality in 2023, seizing opportunities related to different niche markets, which allowed us to increase considerably the fixed premiums of each transaction. We keep upholding our positioning in the Brazilian market, which constitutes a 2024 goal, maintaining our sea exports in a direct modality (with no go-betweens) to Brazilian LPG distributors.
In 2023, we continued participating in the several supply programs dictated by the National Government. Such is the case of the Household Program.
Participation in this program forces tgs to commercialize LPG volumes required by the controlling entity at prices inferior to market values and under certain circumstances at prices lower than their processing cost.
Regarding the Propane for Networks Agreement, on August 28, 2023 we signed its twentieth renewal, in effect until December 31, 2023.
136
Midstream
During 2023, the Midstream business segment recorded an operating profit of Ps.93,607 million, which represents a Ps. 36,364 million increases compared to Ps. 57,243 million in 2022. The main factors that affected the results of operations of this segment during 2023 are the following:

•
Revenues increased by Ps. 59,308 million primarily due to: (i) higher natural gas transportation and conditioning services in Vaca Muerta for Ps. 60,767 million and (ii) higher operating and maintenance GPM and Transpor.Ar Program by Ps. 7,389. These effects were partially offset by the decrease in the real exchange rate on sales revenues denominated in U.S. dollars for Ps. 6,341 million, compression of natural gas services by Ps.1,633 million and lower operation and maintenance services rendered by Ps. 486 million.

•
Net costs of sales, administrative and selling expenses increased by Ps. 22,784 million, mainly due to the increase in: (i) depreciations of Ps. 7,602 million, (ii) turnover tax by Ps. 4,349 million, (iii) salaries, wages, and other compensation by Ps. 4,011 million, (iv) repair and maintenance expenses by Ps. 2,931 million and (v) third party services by Ps. 2,321 million.
Telecommunications
During 2023, the Telecommunications business segment recorded an operating loss of Ps. 172 million, compared to a profit of Ps. 582 million in 2022. The main factors that affected the results of operations of this segment during 2023 are the following:

•
Revenues decreased by Ps.293 million in the year ended December 31, 2023, when compared to 2022.

•
Net cost of sales, administrative and selling expenses increased by Ps.462 million in the year ended December 31, 2023, when compared to 2022, mainly due to higher salaries, wages and contributions and third party services.
B. Liquidity and Capital Resources
Throughout 2024, we continued to maintain a solid financial position, with the main sources of liquidity being cash flows from our operations, our return to international capital markets with the issuance of the 2031 Notes, and access to credit lines from top-tier entities, given the existing limitations and prevailing macroeconomic conditions in 2024.
We expect our main sources of liquidity in the near term to be cash flow from operations and, to a lesser extent cash flow from third parties obtained from financial institutions. We closely monitor our liquidity levels in order to ensure compliance with our financial obligations and to achieve our objectives. Our principal uses of cash flows are expected to be capital expenditures, operating expenses, dividend payments to our shareholders, payments of financial debt and for general corporate purposes. We expect working capital, funds generated from operations and, to a lesser extent, financing from third parties to be sufficient.
To preserve cash surpluses, we are primarily invested in low-risk, highly liquid financial assets and in private debt securities of top-tier Argentine companies. We also maintain our cash position in high-quality financial institutions located in Argentina and the United States. Our policy is designed to diversify credit risk. Given that our total financial indebtedness is denominated a different currency than the Argentine peso, we prioritize the placement of funds in U.S. dollar-denominated investments.
137
In 2024, we have pursued the diversification of our investment’s portfolio. To that end, we acquired public and private bonds linked to the U.S. dollar and to CER (BCRA’s index: Stabilization Reference Coefficient) to mitigate the exchange rate risk on our liabilities in United States dollars and the impact of inflation on availabilities denominated in pesos.
We currently do not have any off-balance sheet arrangements or significant transactions with unconsolidated entities not reflected in our Financial Statements. All of our interests in and/or relationships with our subsidiaries are recorded in our Financial Statements.
In the short-term, the most significant factors generally affecting our cash flow from operating activities are: (i) fluctuations in international prices for LPG products, (ii) fluctuations in production levels and demand for our products and services, (iii) changes in regulations, such as taxes, taxes on exports, tariffs for our regulated business segment and price controls, (iv) fluctuations in the natural gas price used as RTP, (iv) fluctuations in exchange rates and (v) operating cost increases given inflation.
Our cash flows from operations have been affected in past years due to the lack of adjustment to our natural gas transportation tariffs to cover increases in our operating costs and capital expenditures. Along these lines, and as a guiding principle, financial solvency is our main objective.
During 2024, our cash generation has allowed us to cover all our financial needs, mainly the investments made for the maintenance of the transportation system and other operating assets of the remaining business segments, as well as those made for new projects.
On March 26, 2024, we entered the 2024 Transitory Agreement with ENARGAS, which outlined a transitory adjustment of 675% in natural gas transportation tariffs. For further information, see “ Item 4. Our Information—B. Business Overview—Natural Gas Transportation.”
During 2024, we continued participating in the Households with Bottles Program, which generates operating margins by virtue of the fact that the price determined by the SHR is significantly lower than the costs of processing natural gas. For further information, see “ Item 4. Our Information—B. Business Overview—Liquids Production and Commercialization. ”
We believe that we will have to rely only on our operating cash inflow to meet our working capital, debt service and capital expenditure requirements for the foreseeable future. Actual results may differ materially from our expectations described above as a result of various factors affecting the Argentine economy.
In the Liquids Production and Marketing business segment, despite the volatility of prices of commodities, we were able to maintain a positive cash flow.
As a result of a combination of external and local factors in the macroeconomic context, the exchange rate of the U.S. dollar increased by 27.7% during 2024, from Ps. 808.45 to Ps. 1032.00. As of December 31, 2024, 81%, or U.S.$624 million, of our fund placements were denominated in U.S. dollars, to mitigate such risk. During the period ended on December 31, 2024, sales revenues denominated in U.S. dollars amounted to 56%.
The foregoing allows us to conclude that we managed to limit the impact of the recent turbulence in the exchange rate on the future cancellation of indebtedness.
A further devaluation of the peso or further inflation with no compensating effect in our natural gas transportation tariffs or lower liquids prices could harm our cash-generating ability and materially adversely affect our liquidity, our ability to carry out mandatory capital investments and our ability to service our debt.
138
Our financial position is and will be significantly dependent on its operating performance, our indebtedness and capital expenditure programs.
Our primary sources and uses of cash during the years ended December 31, 2024, 2023 and 2022 are shown in the table below:
Years ended December 31,
2024
2023
2022
(in millions of pesos)
Cash and cash equivalents at the beginning of the year
14,371
20,269
58,503
Cash flows provided by operating activities
484,167
412,818
240,154
Cash flows used in investing activities
(384,898
)
(449,526
)
(272,715
)
Cash flows (used in) / provided by financing activities
(31,348
)
53,685
24,590
Net (decrease) / increase in cash and cash equivalents
67,920
16,976
(7,971
)
Foreign exchange gains on cash and cash equivalents
171
3,160
1,984
Monetary results effect on Cash and cash equivalents
(22,488
)
(26,035
)
(32,246
)
Cash and cash equivalents at the end of the year
59,974
14,371
20,269
In our opinion, the working capital is sufficient for the company’s present requirement.
Cash Flows Provided by Operating Activities
The cash flow provided by operating activities for the year ended December 31, 2024, increased by Ps. 71,349 million, mainly due to higher comprehensive income, adjusted for non-cash income and expense by Ps. 155,267 million and lower income tax payments by Ps. 20,355 million, partially offset by the increase in cash outflows by Ps. 104,273 million in connection with changes in assets and liabilities. The increase in cash outflows were mainly due to lower contract liabilities, trade receivables and other receivables, and an increase in trade payables payments.
The cash flow provided by operating activities for the year ended December 31, 2023, increased by Ps. 172,663 million, mainly due to lower income tax payments by. 149,850 million and the increase in cash inflows by Ps. 49,352 million in connection with changes in assets and liabilities. The increase in cash inflows was mainly due to higher contract liabilities and trade payables, partially offset by the increase in trade receivables. These effects were partially offset by lower comprehensive income, adjusted for non-cash income and expense by Ps. 26,538 million.
Cash Flows Used in Investing Activities

The cash flow used in investment activities for the year ended December 31, 2024, decreased by Ps. 64,628 million, mainly driven by lower acquisitions of PPE within the framework of Midstream projects by Ps. 4,351 million and financial assets not considered cash equivalents according to IFRS Accounting Standards by Ps.60,277 million.
The cash flow used in investment activities for the year ended December 31, 2023, increased by Ps. 176,811 million, mainly driven by higher acquisitions of capital assets within the framework of Midstream projects by Ps. 122,543 million and financial assets not considered cash equivalents according to IFRS Accounting Standards by Ps.54,268 million.
139
Cash Flows Provided by / (Used in) Financing Activities

Cash flow used in financing activities in 2024, amounted to Ps. (31,348) million compared to the cash flow provided by financing activities for Ps. 53,685 million for 2023. This effect was due to net payments of financial debt during 2024 by Ps 85,033 million.
Cash flow provided by financing activities in 2023, amounted to Ps. 53,685 million compared to the cash flow provided by financing activities for Ps. 24,590 million for 2022. This effect was due to net payments of financial debt during 2023 by Ps 29,095 million.
Description of Indebtedness
As of December 31, 2024, 100% of our total indebtedness was entirely denominated in U.S. dollars. The following table shows our total indebtedness as of 2024 and 2023:
2024
2024
2023
(in millions of
U.S. dollars) (2)
(in millions of pesos)
Current loans:
2031 Notes Interest
18
18,626
-
2018 Notes Interest
-
-
9,315
Bank loans
50
51,962
108,870
Leasing
8
7,808
13,708
Total current loans
76
78,396
131,893
Non-current loans:
2031 Notes
480
495,544
-
2018 Notes
-
-
827,994
Leasing
6
6,169
23,783
Bank loans
-
-
43,409
Total non-current loans
486
501,713
895,185
Total loans (1)
562
580,110
1,027,079

(1)
Issuance expenses net.
(2)
Converted at the exchange rate of Ps.1,032.00 per U.S.$1.00, which was the selling exchange rate as of December 31, 2024.
On October 11, 2023, CNV approved the extension of the maximum amount of the Global Notes Program from US$ 1,200 million to US$ 2,000 million and the extension of the validity period of the Program for an additional 5 years from the expiration of the term, with the new expiration of the Program being January 3, 2029.
On July 24, 2024, within the framework of the 2024 Program, the Company issued the 2031 Notes in accordance with the following characteristics:
140
Amount in U.S.$
490,000,000
Interest Rate
8,50% annual
Pricing
98,712%
Date of Payment
Percentage
on the
Principal
Amount to
be Paid
Amortization
July 24 2031
100%
Frequency of Interest Payment
Semiannual, payable on January 24 and July 24 of each year.
Guarantor
None.

The net proceeds from the 2031 Notes were US$ 483,688,800. The Company used the net proceeds received to make a purchase and redemption of the 2018 Notes.
Covenants
As of December 31, 2024, the Company has complied with a series of restrictions derived from its current financial agreements, which include, among others, those related to obtaining new loans, payment of dividends, granting of guarantees, disposal of certain assets and transactions with related parties.
The Company may contract new debts under the following conditions, among others:
a. To the extent that after contracting the new debt (i) the consolidated coverage ratio (ratio between consolidated EBITDA (consolidated income before financial results, income tax, depreciation and amortization) and consolidated interest) is equal to or greater than 2.0:1; and (ii) the consolidated debt ratio (ratio between consolidated debts and consolidated EBITDA) is equal to or less than 3.50:1.
b. For the refinancing of outstanding financial debt.
c. Originated by customer advances.
The Company may pay dividends under the following conditions: (i) the Company is not in default under 2031 Notes, and (ii) immediately after any dividend payment, the Company may incur new debts according to the provisions in point a. of the preceding paragraph.
Future Capital Requirements
As of December 31, 2024, our estimated material short-term and long-term contractual cash obligations consist of our borrowings, purchases of natural gas used in our Liquids Production and Commercialization business segment, and lease commitments and are detailed by maturity in Note 22 to our Financial Statements.
As it was mentioned before, we’re engaged in increasing our conditioning capacity in our Midstream business segment. for the year of 2025, we expect to invest U.S.$160 million to completed our current expansion project in Vaca Muerta area. For additional information see “ Item 5.  Operating and Financial Review and Prospects—A. Operating Results—Midstream .”
Operation of our assets imply that we must incur in capital expenditures to comply with the safety and maintenance of our natural gas pipeline system and other facilities of our business segments.
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We currently expect to continue to rely on cash flow from operations and short-term borrowings and other additional financing activities to finance capital expenditures in the near term.
Our level of investments will depend on a variety of factors, many of which are beyond our control. Among them we can mention changes in current regulations, including the status of negotiations with ENARGAS in order to conclude the RQT process, the development of the Vaca Muerta area and the increase in natural gas supply, changes in tax legislation, and the political, economic and social situation prevailing in Argentina.
Currency and Exchange Rates
Due to the fact that our entire financial indebtedness is denominated in U.S. dollars, any significant devaluation of the peso would result in an increase in the cost of paying our debt, and therefore, may have a material adverse effect on our results of operations. Our results of operations and financial condition are also sensitive to changes in the peso-U.S. dollar exchange rate because most of our capital expenditures, and the cost of natural gas used in our Liquids business are denominated in U.S. dollars.
Therefore, our primary market risk exposure is associated with changes in the foreign currency exchange rates because our debt obligations are denominated in U.S. dollars and 44% of our consolidated revenues were peso-denominated for the fiscal year ended December 31, 2024. Contributing to this exposure are the measures taken by the Government since the repeal of the Argentine Convertibility Act and the pesification of our regulated tariffs described elsewhere in this Annual Report. This exposure is mitigated in part by our revenues from our Liquids Production and Commercialization business segment, 87% of which are denominated in U.S. dollars for the year ended December 31, 2024. Likewise, 74% of the operating costs of this business segment for that period were denominated in U.S. dollars. For more information, see “ Presentation of Financial and Other Information—Currency.”
We place our cash and current investments in high quality financial institutions in Argentina and the United States. Our policy is to limit exposure with any financial institution. Our temporary investments primarily consist of money market mutual funds and Government bonds.
Our strategy will remain focused on mitigating both the exchange rate risk arising from our liabilities in dollars and the effect of inflation on our liquidity. In a hyperinflationary accounting environment, maintaining monetary assets generates loss of purchasing power and maintaining monetary liabilities generates a gain in purchasing power; provided that such items are not subject to an adjustment mechanism that compensates to some extent for these effects. The monetary loss or gain is booked in the statement of comprehensive income. As of December 31, 2024 and 2023 we are maintaining a net asset monetary position.
C. Research and Development, Patents and Licenses, etc.
Not applicable.
D. Trend Information
See “ —A. Operating Results ” and “ Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal and Regulatory Proceedings. ”
E. Critical Accounting Estimates
See Note 5 (Critical Accounting Estimates) to our consolidated financial statements for a description of our critical accounting estimates.
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Item 6.
Directors, Senior Management and Employees
A.
Directors and Senior Management
General . Management of our business is vested in the Board of Directors. Our Bylaws provide for a board of directors consisting of a minimum of nine principal directors and nine alternate directors and a maximum of eleven principal directors and eleven alternate directors. In the absence of one or more principal directors, alternate directors will attend meetings of the Board of Directors. Principal directors and alternate directors are elected at an ordinary meeting of shareholders and serve one to three-year renewable terms, as resolved by the shareholders, subject to reelection. Effective and alternate directors shall remain in their positions until substituted by the shareholders. In December 2019, the board approved the rules of its internal operation.
Under our Bylaws and Argentine law, the Board of Directors is required to meet at least once every three months. A majority of the members of the Board of Directors constitutes a quorum, and resolutions must be adopted by a majority of the directors present. In the case of a tie, the Chairman or the person replacing him at a particular meeting is entitled to cast the deciding vote. The Board of Directors may hold meetings either by members in physical attendance thereat or by communication among themselves through other means of simultaneous transmission of sound, images and words.
Current Board of Directors members were designated at the 2024 Shareholders’ Meeting. All the member of our Board of Directors were appointed until the shareholders’ meeting that considers the financial statements as of December 31, 2024. The 2025 Shareholders’ Meeting to be held on April 30, 2025 will appoint a new Board of Directors until the shareholders’ meeting that considers the financial statements as of December 31, 2025.
The Shareholders’ Agreement (as defined in “ Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders—Shareholders’ Agreement ”) contains provisions governing the voting of our shares held by CIESA, the election of the members of our Board of Directors and certain other matters.
In February 2015, the Executive Branch enacted Decree No. 196/2015, which complements the provisions of Decree No. 1278/2012, mainly extending indemnity and legal assistance coverage to directors and statutory committee members appointed by the Government in companies in which it has stock participation.
Decree No. 894/2016, established that directors appointed by the FGS shall have the functions, duties and powers established by the General Companies Act, the Capital Markets Law and all the rules applicable to the company in which they act as directors, its bylaws and other internal regulations. On November 19, 2020, Law 27,574 was published in the Official Gazette, which regulates the role of the representatives of the FGS in those companies in which it has a stake, providing that the FGS will dictate the rules that are necessary in order to regulate their appointment, function, responsibility, performance and remuneration, which has been regulated by Decree No. 1041/2020 and ANSES Resolution No. 57/2021.
The General Companies Act governs the way directors are appointed. The members of the Board of Directors are appointed by the shareholders at the general annual shareholders’ meeting or by the Statutory Committee, as the case may be, when authorized by the Bylaws. It is not mandatory to be a shareholder of the company to be eligible to be appointed as a director. Section 263 of General Companies Act mandates that up to one-third of the members of the board can be appointed by the “cumulative vote system.” The vote of each shareholder who chooses to use the “cumulative vote system” shall be multiplied by the number of members to be appointed; the result may be partially or fully allocated to any of the candidates. All of the shareholders are entitled to choose the “cumulative vote system,” in other words, not only ANSES has the right to appoint members to the Board of Directors through that system.
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Duties and Liabilities of Directors . Under Argentine law, directors have the obligation to perform their duties with the loyalty and diligence of a prudent business person. Directors are jointly and severally liable to us, shareholders and third parties for the improper performance of their duties, for violating the law, our Bylaws or regulations, if any, and for any damage caused by fraud, abuse of authority or gross negligence. Under Argentine law, specific duties may be assigned to a director by our Bylaws, regulations or by a resolution of a shareholders’ meeting. In such cases, a director’s liability will be determined with reference to the performance of such duties; provided that certain recording requirements are met. Moreover, under Argentine law, directors are prohibited from engaging in activities in competition with us without express shareholder authorization. Certain transactions between us and directors are subject to ratification procedures established by Argentine law.
A director who participates in the adoption of a resolution or who advises on or recognizes such resolution, will be exempted from liability if he leaves written evidence of his objection and notifies the Statutory Committee before his liability is reported to the board of directors, the Statutory Committee, a shareholders’ meeting, or competent authority or before judicial action is exercised. Shareholder approval of a director’s performance terminates any liability of a director vis-à-vis the Company; provided that shareholders representing at least 5% of our capital stock do not object and that such liability does not result from a violation of the law, our Bylaws or regulations.
Causes of action against directors may be initiated by us upon a majority vote of shareholders. If a cause of action has not been initiated within three months of a shareholders’ resolution approving its initiation, any shareholder may initiate the action on behalf of and for our account.
Every year the Company hires a civil liability insurance coverage for directors, Syndics and officers. Such coverage is common practice among public companies who seek protection for such persons against shareholders’ and other parties’ claims.
As of the date of this Annual Report, five of the principal directors of our Board of Directors qualify as independent as defined in the NYSE in Section 303A of its Listed Company Manual (the “ NYSE Standards ”), Rule 10A-3 under the Exchange Act and the CNV Rules. Three of the principal directors of our Board of Directors (all of whom are independent in accordance with the NYSE Standards and two of whom are independent in accordance with the CNV Rules) are also members of our Audit Committee. The remaining members of the Board of Directors are not independent. Under the independence requirements, a director is not independent if any of the following apply:

•
Is also a member of the management body of the controlling entity or another company belonging to the same economic group by a relationship existing at the time of its election or that ceased during the three years immediately preceding.

•
Is linked to the issuer or its shareholders that hold directly or indirectly “significant shareholding” or with companies in which these also have direct or indirectly “significant shareholding,” or was linked to them by a contract of employment during the last three years.

•
Provides, or belongs to a professional corporation or association, which renders professional services to or receives any form of remuneration or fees (other than the corresponding remuneration for its position in the administration body) from the issuer, or those shareholders that have any direct or indirect “significant shareholding” in us or from corporations in which shareholders also have any direct or indirect “significant shareholding.”

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Directly or indirectly, holds five percent or more of shares entitled to vote of our capital or in a company which holds “significant shareholding” in the latter.

•
Directly or indirectly, sells or provides goods or services to the company or its shareholders, who hold direct or indirect “significant shareholding” for an amount substantially higher than the compensation received from the position as members of the administration body. This prohibition covers commercial relations that took place during the last three years prior to the appointment as director.

•
Has been a director, manager, administrator or principal executive of non-governmental organizations that have received funds, for amounts exceeding Ps. 800,000 from the company, its controlling entity and other companies of the group of which tgs is a part.

•
Receives some payment, including participation in stock option plans, from the company or the companies in its same group, other than the fees to be received under his position as director.

•
Has served as director at the company, its controlling entity or another company belonging to the same economic group for more than ten years. The condition of independent director will be recovered after at least three years have elapsed since the cessation of his position as director.

•
Is a husband or wife, legal partner, close relative up to third degree of consanguinity or second degree of relationship that, in the case of being a member of the administrative body, would not be independent as set forth in the CNV regulations.
In all cases, “significant shareholding” refers to those shareholders holding at least five percent (5%) of our common stock, or less in cases when they are entitled to appoint one or more directors per class of share, or have agreements with other shareholders relating to the management and administration of any such companies, or its controlling entity.
The following table reflects the current members of our Board of Directors, their respective positions on the Board of Directors and the year they were appointed to such position.
Additional information regarding the occupation and employment background of each of our regular directors is set forth below:
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Name
Date of Appointment
Term
Expires *
Position
Position in Other Company
Horacio Jorge Tomás Turri
4/17/2024
2025
Chairman
Executive director Exploration and Production at Pampa Energía
Luis Alberto Fallo
4/17/2024
2025
Vice Chairman
Director of Sagua Argentina S.A.
Pablo Daniel Viñals Blake
4/17/2024
2025
Director
Partner at Marval O’Farrell Mairal Law Firm
María Carolina Sigwald
4/17/2024
2025
Director
Legal Executive director at Pampa Energía
Luis Rodolfo Secco
4/17/2024
2025
Independent Director
Economist
Carlos Alberto Olivieri
4/17/2024
2025
Independent Director
Independent Consultant
Carlos Alberto Di Brico
4/17/2024
2025
Independent Director
Public Accountant
Carlos Alberto Caffarini
4/17/2024
2025
Independent Director
Partner of the law firm Caffarini & Asociados
Federico Levy
4/17/2024
2025
Independent Director
Partnet at pharmaceutical industry
Jorge Romualdo Sampietro
4/17/2024
2025
Alternate Director
Senior Director at Petroquímica Cuyo
Gerardo Paz
4/17/2024
2025
Alternate Director
Pampa Energía’s legal affairs vice president
Francisco Antonio Macías
4/17/2024
2025
Alternate Director
Partner at Marval O’Farrell Mairal Law Firm
María Agustina Montes
4/17/2024
2025
Alternate Director
Legal affairs and compliance manager at Pampa Energía
Enrique Llerena
4/17/2024
2025
Independent Alternate Director
Partner at Llerena – Amadeo Law Firm
Santiago Alberto Fumo
4/17/2024
2025
Independent Alternate Director
Independent consultant
Martin Irineo Skubic
4/17/2024
2025
Independent Alternate Director
Manager of Alliances and New Business Development Latam South at Elli Lilly Interamerica
Hernán Castrogiovanni
4/17/2024
2025
Independent Alternate Director
Chief Strategy and Corporate Affairs Officer at the FGS-Anses
Gastón Marra
4/17/2024
2025
Independent Alternate Director
Advisor at the ANSES
*As mentioned above, Shareholders’ meeting to be held on April 30, 2025 will appoint a new Board of Directors.
Horacio Jorge Tomás Turri is currently Executive Director of Exploration and Production at Pampa Energía. From August 1997 to March 2000, Mr. Turri was Chief Executive Officer of Hidroeléctrica Piedra del Águila. From 1994 to 1997, he was Chief Executive Officer of Gener Argentina S.A. Prior to 1994, he was Development Assistant Manager at Central Puerto S.A. From 1990 to 1992, Mr. Turri worked as investment project’s analyst for the oil, gas, and electricity sectors at SACEIF Luis Dreyfus. He also worked at Arthur Andersen & Co. and Schlumberger Wireline in 1987-1990 and 1985-1987, respectively. He is CIESA’s Chairman, as well. Mr. Turri is an Industrial Engineer and received his degree at Instituto Tecnológico Buenos Aires. He was born on March 19, 1961.
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Luis Alberto Fallo holds a degree in Accounting from the Universidad de La Plata and a Master’s degree in Business Administration from the Universidad del CEMA (Center of Macroeconomic Studies). He currently serves as Director of Simali S.A., Executive Director of Sagua Argentina S.A., President of Beau Lieu S.A., President of Finca de Los Andes S.A., Vice President of Vice President of Aguas de Santiago S.A., President of PEPCA S.A. and Vice President of CIESA, President of First Class Flights S.A., and Vice President of Hostería Las Balsas S.A. Since 1992 he has worked with Grupo Sielecki, the main and controlling shareholder of several companies to which he serves as Director. He was born on January 29, 1960.
Pablo Daniel Viñals Blake holds a law degree from the Universidad Católica Argentina and a master law degree from Harvard Law School.  Mr. Viñals Blake has been a foreign associate in the New York office of Milbank Tweed Hadley & McCloy LLP and since 1997 is a partner in the Buenos Aires office of Marval, O’Farrell & Mairal. Mr. Viñals Blake is currently the co-head of Marval’s Mergers & Acquisitions team and head of the Private Equity and Venture Capital and the Agribusiness groups. He has represented domestic and multinational companies, private equity, hedge funds and financial institutions in most of the largest M&A, Agribusiness and project financing transactions in Argentina in the last two decades and advised multilateral financial institutions such as the IFC, IDB and the United States Eximbank on their Argentine operations. He currently serves as a board member of BlackRock Argentina Asesorias S.A., PEPCA S.A. and CIESA. He was born on October 3, 1962.
María Carolina Sigwald has been a member of the Board of Directors of Pampa Energía since 2017 and serves as Executive Director of Legal Affairs of Pampa Energía. Ms. Sigwald worked at the legal department of Central Puerto S.A., and then served as an associate at the New York office at Chadbourne & Parke and then worked at the Corporation Interamericana de Inversiones (IIC) based in Washington. In 1998, Ms. Sigwald returned to Argentina and founded the firm Díaz Bobillo, Sigwald & Vittone, in which she served as an external consultant for energy companies. Before joining as a director at Pampa Energía, between 2015 and 2017, Ms. Sigwald was the director of regulatory and legal affairs at Edenor. Ms. Sigwald is also a member of the boards of CITELEC, CT Barragán, Transba, CIESA., Comercializadora e Inversora S.A., Pampa Energía Bolivia S.A., Fundación Pampa Energía and Vientos de Arauco Renovables S.A.U., among others. Ms. Sigwald holds a law degree with honors from University of Buenos Aires. She was born on November 15, 1967.
Luis Rodolfo Secco holds a Bachelor’s degree in Economics and a Master’s degree in Banking Disciplines from the Universidad Nacional de La Plata. In 1990 he obtained a scholarship as a full time researcher at the Universitá degli Studi di Siena. Between 1992 and 1994, he was a researcher and director of the School of Banking Disciplines of the Universidad Nacional de La Plata. Between 1994 and 1999, he worked as Chief Economist of M.A.M. Broda and Associates. At the beginning of 2000 he was summoned to work in the government of the then president Fernando De la Rua as economic adviser to the Presidency and General Director of Strategic Analysis of the Secretary of State Intelligence, a position he held until January 2002. In 2002, Mr. Secco founded his economic consulting firm, Economic Perspectives, and is currently director and editor of the Economic Perspectives newsletter. Between 2004 and 2012 he was external director of the Department of Economics of Deloitte Argentina. Since 1988 he has served as a professor at the Faculty of Economic Sciences of the Universidad Nacional de La Plata. He is also a guest columnist for the newspapers La Nación, Perfil and El Economista. He was born on December 14, 1963.
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Carlos Alberto Olivieri holds a Public Accountant degree from the Universidad Nacional de Rosario and a postgraduate degree in Corporate Financial Management from the University of Michigan and Stanford University. At present, Mr. Olivieri is professor of Finance at Universidad Torcuato Di Tella. Between 2008 and March 2010, Mr. Olivieri acted as a financial advisor at Raymond James and, between 2002 and 2007, he worked for YPF as Chief Financial Officer (“ CFO ”) for Argentina, Brazil and Bolivia. Previously he acted as CFO of YPF S.A., Quilmes Industrial S.A. and Eaton S.A. and President of YPF GAS S.A. and Maxus Corporation (USA). He also had executive responsibilities in other industries, such as Aerolíneas Argentinas and Arthur Andersen & Co. and taught at the Universidad de Buenos Aires and University of Michigan. Mr. Olivieri is also member of the board of directors of Metlife Seguros S.A. and acts as financial advisor. He was born on May 14, 1950.
Carlos Alberto Di Brico holds a degree in Administration and Public Accountancy from the Universidad de Buenos Aires. He is a member of the board of NTN SNR Argentina SA, FDV Intive Argentina SA, Aristocrat Argentina PTY Limited, Perform Media Argentina SRL and Perform Content South America SAS. He has held several management positions at Eveready Argentina S.A. between 1975 and 1995. From 1995 to 1998, he was CFO at Stafford Miller Argentina S.A. Between 2001 and 2013, he served as CFO and later as CEO at Emerson Argentina. Between 2010 and 2017, he was a member of the board of directors of Camuzzi Gas Pampeana S.A. He was born on August 1, 1952.
Carlos Caffarini holds a law degree from the UBA. During his professional career he has held several positions as advisor to various public administration bodies as well as participated in the drafting of various laws and regulations with an impact on the regulatory framework of national transport and logistics. Likewise, in his private practice she provides legal advice to several organisations and is a partner of the law firm Caffarini & Asociados. He was born on October 22, 1952.
Federico Levy holds a public accountant degree from the Universidad del Salvador and a specialization in capital markets from the Universidad del CEMA. Since September 2013 he acts as partner in a La Franco pharmacy. Previusly he acted as financial advisor in Banco Galicia.
Jorge Romualdo Sampietro holds a degree in Chemical Engineering from the Universidad de Buenos Aires and an Executive Program at Darden Business School - University of Virginia. Between 1968 and 1973, he worked as Technical Sales Manager at Dow Química Argentina. From 1973 to 1975, he was Export Manager at Petroquímica Mosconi. Since 1976, he has worked as Commercial and General Manager at several companies. Since 1994, he has been General Manager of Petroquímica Cuyo and currently holds the position of Director of Petroquímica Cuyo S.A.I.C. and of Alternate Director of CIESA and PEPCA. He was born on May 12, 1944.
Gerardo Carlos Paz . Mr. Paz obtained a law degree from Universidad Nacional de Córdoba. He has worked at several places such as ENRE from 1994 to 2000, Camuzzi Gas Pampeana from 2001 to 2007 and Pampa Energía S.A. since 2007. Mr. Paz holds a Master’s degree in business law. Mr. Paz serves as Vice Chairman of PACOSA and Transelec. He is also director of HIDISA, HINISA, TJSM and TMB and alternate director of CPB, CIESA and Transba. Mr. Paz is also a member of the supervisory committee of CAMMESA. He was born on October 24, 1968
Francisco Antonio Macías holds a Law degree from the Universidad Católica Argentina and a Post Graduate degree in International and EC Law from the School of Law of the University of Siena, Italy and a Post Graduate Degree in International Operations from the National Foreign Office Institute of Argentina. Since 2002, Mr. Macías is a partner in Marval, O’Farrell Mairal law firm and is currently the head of Marval’s Oil & Gas practice. Before joining Marval he worked for the firm of Bazán, Cambré & Orts and for BBVA Banco Francés. He was born on January 19, 1967.
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María Agustina Montes is an alternate member of Pampa Energía’s Board of Directors. Energy. Ms. Montes is a lawyer graduated from the University of Buenos Aires. She currently works as Corporate Legal and M&A Manager of the Company, having joined the company in 2011. She has also She also worked at Cleary, Gottlieb, Steen & Hamilton in their New York office during 2014. Previously, Ms. Montes worked as an attorney at Bruchou, Fernandez Madero & Lombardi. Currently, Ms. Montes serves as a director of HINISA and Pampa Energía Bolivia S.A., and as an alternate director of Enecor, S.A., and as a member of the board of directors of Enecor, S.A. alternate director of Enecor and, HIDISA, Transba, TGS, CITELEC, CTB, Digipa S.A., CISA, VAR and Autotrol. Ms. Montes serves as president of Trovinver S.A. She was born on September 28, 1981.
Enrique Llerena holds a Law degree from the Universidad Católica Argentina. He also holds a degree in Diplomatie et administration des Organization Internationales from the Universite et Paris XI. Since 1982, he has been a partner of the law firm Llerena Amadeo. He has served as the principal director and member of the audit committee of various companies. He is currently the Managing Director of Tradelog S.A. He is also a partner at Llerena & Arias Uriburu. He was born on April 9, 1955.
Santiago Alberto Fumo graduated as a Public Accountant at the Universidad del Litoral, and he also holds a Master’s degree in Law and Economy for the Universidad Torcuato Di Tella. He currently works as an independent consultant in startups and takeovers. Additionally, he acts as syndic at Molinos Río de la Plata S.A., National Oilwell Varco MSW S.A., Tuboscope Vetco de Argentina S.A. and Antares Naviera S.A. He was born on December 10, 1960.
Martín Irineo Skubic serves as manager for alliances and development at Elli Lilly Interamerica. In addition Mr. Skubic has served as senior officer at Jergens Argentina S.A., Stafford Miller Argentina S.A., Eveready Argentina S.A. and Pistrelli, Díaz y Asociados. Mr. Skubic holds a degree in public accounting from Universidad de Buenos Aires and holds a Master in Business Administration from Universidad del CEMA.
Hernán Castrogiovanni holds a degree in organizational management and a master’s degree in energy from the University of Buenos Aires. He is currently Chief Strategy and Corporate Affairs Officer at the FGS-Anses, where he has been working since 2004.
Gastón Marra holds degrees in business administration and organizational information systems, both from the University of Buenos Aires. He currently works as an advisor to the general management at ANSES where he has held various positions since 2014. He was born on August 17, 1970.
Executive Committee . To achieve more streamlined management of the Company, the 2017 Shareholders’ Meeting approved the amendment of our Bylaws for the purpose of allowing, within the scope of the Board of Directors, the possibility of constituting an executive committee (the “ Executive Committee ”), under the terms established by article 269 of the General Companies Act.
The Board of Directors is the body in charge of appointing the members of the Executive Committee, which will be made up of four members: the directors who have been appointed as our President and Vice President, and any other two directors elected by simple majority, with a mandate to serve for one year.
The Executive Committee will function with a quorum of the majority of its members; the quorum must include our President and Vice President. It will adopt its decisions unanimously and will have the powers determined by the Board of Directors.
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The current composition of the Executive Committee was decided by the Board of Directors at its meetings of April 17, 2024. Horacio Jorge Tomás Turri, Luis Alberto Fallo, Pablo Viñals Blake and María Carolina Sigwald are in office for a term of one fiscal year, until the meeting that considers the financial statements as of December 31, 2024.
Executive Officers . The following is a list of our executive officers as of the date of this Annual Report, their respective positions with us and the year they were appointed to such position:
Name
Year of
Appointment
Position
Oscar Jose Sardi
2019
CEO
Claudia Trichilo
2019
Operations Director
Carlos Hector Sidero
2013
Human Resources Director
Alejandro Mario Basso
2016
CFO and Services Director
Hernan Diego Flores Gomez
2017
Legal Affairs Director
Juan Ignacio de Urraza
2020
Business Director
Rubén De Muria
2018
Institutional and Regulatory Affairs Director
There is no expiration term defined for the executive officers.
Below is a description of the main activities currently carried out by each of our executive officers, together with the biographical information thereof:
Oscar Jose Sardi received a Mechanical Engineering degree from the Universidad Nacional de Rosario and holds a major in Natural Gas from the Universidad de Buenos Aires. He also participated in a General Administration Program at the Universidad Austral. He worked for GdE between 1983 and 1992 and since then, he has held different positions in our operations area. In April 2005, he was designated as our Service Vice President, and subsequently appointed as our Operations Director from October 2016 until April 2019, when he was appointed as our CEO. He also acts as President of Telcosur. He was born on September 1, 1955.
Claudia Beatriz Trichilo received a Chemistry degree and a post-graduate degree in Engineering from the Universidad de Buenos Aires. From June 1988 to December 1992, she worked at the Industrial Engineering Department of Gas del Estado. In 1992, Ms. Trichilo joined tgs as Chief of Technical Planning and held such position until December 2002, when she was appointed Technical Developments Manager. From 2007 to 2010, Ms. Trichilo acted as Coordinator of Operations until August 2019, when she was appointed as our Operations Vice President. She was born on March 21, 1963.
Carlos Hector Sidero graduated from Universidad de Buenos Aires as a Certified Public Accountant in Argentina. He worked with Isaura S.A. from 1981 through 1994. From 1994, he managed different areas within the Human Resources department at Eg3 SA and Petrobras Argentina. He joined us in March 2013 as Vice President of Human Resources. He was born on February 16, 1956.
Alejandro Mario Basso received a Public Accounting degree from the Universidad de Buenos Aires. He worked for Compañía Naviera Pérez Companc from 1987 to 1992, and for Quitral-Co S.A. from 1992 to 1994. From 1994 to 1998, he acted as our Planning and Corporate Control Manager, and between September 1998 and March 2008, he was our Planning and Control Vice President. Between March 2008 and October 2016, he acted as our Management Control and Corporate Governance Vice President. In October 2016, he was designated as our CFO and Services Vice President. He also acts as Vice president of Telcosur S.A. and Gas Link S.A. He was born on October 13, 1961.
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Hernán Diego Flores Gómez received a Law degree from the Universidad de Buenos Aires. He is a co-founder and professor of the Hydrocarbons and Energy Industry Law post-graduate course at Universidad Católica Argentina, and he is also a co-founder and professor of the Petroleum and Natural Gas Law post-graduate course at Universidad de Buenos Aires, and professor of the Energy Master’s degree at the Energy Regulatory Activity Studies Center (“ CEARE ”). Additionally, Dr. Flores Gómez has a Master’s degree in Business Law from the Escuela Superior de Economía y Administración de Empresas (ESEADE), a Master’s degree in Finance from the Universidad del CEMA and a Postgraduate degree in Damage Law from Universidad Católica Argentina. He began his career in the National Judicial Branch. Throughout his career, he held various relevant positions on legal matters, institutional and management relationship at companies such as Capsa / Capex S.A., Pluspetrol S.A. and ENAP Sipetrol Argentina S.A. He was born on June 10, 1966.
Juan Ignacio de Urraza holds a degree in Chemical Engineering from the Universidad Nacional de La Plata. He completed several postgraduate courses in Strategic Management, Business Management, Management Development, Management Development and Advanced Leadership. Between March 1991 and July 1992, he worked at the Instituto de Investigaciones Fisicoquímicas, Teóricas y Aplicadas as a researcher in the Corrosion Department. From September 1992 to January 1993, he worked as a fellow at Petroken Petroquímica Ensenada. From July 1993 to September 1994, he worked first as a Process Engineer and then as a Consultant at A&C Analistas Económicos y Consultores de Empresas. Between November 1994 and February 2005 he held different positions in Metrogas. In March 2005 he joined us as Liquids Commercial Head, until September 2007, when he took over as Natural Gas Liquids Commercial Manager. In November 2020 he was appointed Business Director. He was born on September 27, 1969.
Rubén De Muria received a Public Accountant degree from the Universidad de Buenos Aires. He obtained a master’s degree in Regulations of Gas and Electricity Industries from CEARE. He worked for Chase Manhattan Bank Argentina and Perez Companc S.A. between 1985 and December 1992. In December 1992, he joined us as member of the Regulatory Matters and Rates Department. In August 2006, he was promoted to Regulatory Matters and Rates Manager. In December 2015, he was appointed as Institutional and Regulatory Affairs Executive Manager, and, finally in January 2018, as Institutional and Regulatory Affairs Vice President. He was born on January 31, 1964.
For additional information regarding the provisions included in the Shareholders’ Agreement for the election of our CEO, see “ Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders—Shareholders’ Agreement.”
Indemnification of Officers and Directors . Under the Shareholders’ Agreement, the shareholders of CIESA require us to: (i) limit the liability of each of our officers, syndics and directors for all consequences of their acts or omissions, excluding acts or omissions where there is evidence of fraud or gross negligence and (ii) enter into agreements obligating us to defend, indemnify and hold harmless each of our officers, syndics and directors from and against all liabilities, losses, and other expenses incurred by each such officer, syndic or director in connection with a pending, threatened or completed civil, criminal, administrative or other proceeding, or any investigation that could lead to such a proceeding, by reason of the fact that such officer, syndic or director is or was one of our officers, syndics or directors, including claims alleged to be due to the negligence of such person, but excluding acts or omissions that involve fraud or gross negligence towards us.
B.
Compensation
The remuneration paid by us during the year 2024 to the members of our Board of Directors and executive officers amounted to Ps. 731 million and Ps. 2,671 million, respectively. We do not grant pension or retirement plans or other benefits to members of our Board of Directors or to our executive officers.
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Executive officers are subject to a goal-directed management system with a variable remuneration program. Consensual objectives are in line with our global objectives, as the variable remuneration program links a portion of its compensation to the performance thereof and our performance. Total compensation of executive officers consists of a fixed portion (normal and usual remuneration) and a variable portion. The variable portion depends on the level of achievement of the “Outcome” objectives, which consist of economic and financial targets, and “Performance Results,” including business objectives that do not have an associated economic result. We measure achievement of these objectives annually, based on performance during the fiscal period.
C.
Board Practices
For information on the term of office of our directors and executive officers, see “ —A. Directors and Senior Management ” above. The information in that section is incorporated herein by reference.
None of the members of our Board of Directors are party to any service contract with us or any of our subsidiaries providing for benefits upon termination of employment.
Audit Committee
According to the Capital Markets Law, publicly listed companies must have an Audit Committee “that will function on a collegiate basis with three or more members of the Board of Directors, the majority of whom must be independent under CNV regulations.” The Audit Committee operates under its Charter of Procedure, which was approved in its meeting held in 2013 in accordance with the requirements of the Capital Markets Law. The charter Procedure require that the majority of the members that form the Audit Committee must be independent according to the CNV’s standards. Audit Committee members are designated by a simple majority of the Board of Directors, at the first meeting following designation of the members of the Board of Directors, and they hold office until their successors are designated. The Audit Committee adopts its own regulations and must prepare a working plan for each fiscal year.
The Board of Directors meeting held on April 17, 2024 appointed the current members of the Audit Committee, who as of the date of this Annual Report are Carlos Alberto Di Brico, Carlos Alberto Olivieri and Luis Rodolfo Secco and their respective alternates, Martin Irineo Skubic, Santiago Alberto Fumo and Enrique Llerena. All of Audit Committee members meet the independence criteria set forth under Rule 10 A-3 of the Exchange Act, SEC regulations and NYSE Standards, but according to CNV rules Mr. Carlos Olivieri does not qualify as independent since he has served as director for more of ten years.
The Audit Committee’s mandatory duties are to:

-
supervise the internal control and accounting systems as well as the reliability of the latter and all the financial information and other significant issues that are to be submitted to the SEC, CNV and BYMA in compliance with the applicable disclosure policies;

-
supervise the application of information policies regarding our risk management;

-
ensure that the market is informed about those operations where there may be a conflict of interest with one or more members of the Board of Directors, controlling shareholders or other parties as defined by the applicable regulations;
152

-
express its view on the reasonableness of fees and stock option plans for directors submitted by the Board of Directors;

-
express its view as to compliance with laws and regulations and the reasonableness of the conditions of an issuance of shares (or convertible securities), in the case of a capital increase, excluding or limiting preferential rights;

-
oversee compliance with the Code of Ethics (see “Item 16B.Code of Ethics”); and other relevant rules;

-
issue a well-founded opinion on whether the terms and conditions of relevant transactions with related parties are according to market practice, within five business days from the receipt of a petition issued by the Board of Directors, and at any other time at which a conflict of interest exists or might exist;

-
prepare an annual working plan for the fiscal year and notify the Board of Directors and the Statutory Committee within 60 days from the beginning of the period;

-
fulfill all the obligations stated in our Bylaws and applicable laws and regulations;

-
express its view on the Board of Directors’ proposals on whether to appoint the external auditors to be hired and monitor the auditors’ independence; and

-
establish procedures for: (i) the receipt, treatment, investigation and administration of the complaints received by us regarding accounting, internal accounting controls or auditing matters; and (ii) the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters.
Also, regarding the internal and external auditors, the Audit Committee must:

-
review their plans; and

-
evaluate and give an opinion on their performance when issuing the annual Financial Statements.
In evaluating the external auditors’ performance, the Audit Committee must:

-
analyze the different services rendered by the external auditors as well as their independence, according to Technical Resolution (“TR”) No. 34 of the FACPCE, and any other related regulations issued by professional councils;

-
report separately the fees billed as follows: (i) fees for external audit and other related services meant to provide reliability to third parties (e.g., special reports about internal controls, shareholding prospectuses, certifications and special reports requested by regulators, etc.); and (ii) fees related to other special services different from those mentioned above; and

-
review independence policies of the external auditors in order to verify their fulfillment.
Additionally, the Audit Committee must perform the following mandatory duties contained in the regulatory framework:
153

-
Give a prior assessment, that shall be used by the CNV to require us to designate an external auditor as requested by minority shareholders, as long as such shareholders represent at least 5% of our common stock and provide a justified request (in those cases in which the minority shareholders’ rights might be affected) and if CNV understands the credibility of the damage invoked by said shareholders in order to carry out one or more specific reviews. The charges of such reviews shall be borne by the petitioning shareholders (Act No. 26,381, article 108.f);

-
provide a well-founded assessment about an acquiring tender (Act No. 26,381, article 98); and

-
issue a report supporting a Board of Directors’ resolution to buy back our shares (Act No. 26,381, article 64).
Once a year, the Audit Committee is required to prepare a plan for the fiscal year to be presented to the Board of Directors and to the Statutory Committee. The directors, members of the Statutory Committee, managers and external auditors must, when requested by the Audit Committee, attend its meetings, provide the Audit Committee with information and otherwise assist the Audit Committee in the performance of its functions. In order to better perform its functions, the Audit Committee may seek the advice of legal counsel and other independent professionals at our expense, pursuant to a budget approved by the shareholders, and we must provide the Audit Committee with access to the information and documents it may deem necessary to perform its duties.
According to CNV Rules, at least once a year and upon the filing of the annual Financial Statements, the Audit Committee shall issue a report to the shareholders, addressing how such committee performed its duties and the results of its work.
The aggregate compensation paid by us for the fiscal year ended December 31, 2024 to the members of the Audit Committee was Ps. 262 million. We do not provide pension, retirement or similar benefits to any member of the Audit Committee.
Statutory Committee
The Statutory Committee is our monitoring body as stipulated in Section No. 284 of the General Companies Act. Our Bylaws provide for a Statutory Committee consisting of three syndics and three alternate members (“ Alternate Syndics ”). In accordance with our Bylaws, two syndics and the corresponding Alternate Syndics are elected by a majority vote of the holders of our Class “A” shares. The remaining syndic and corresponding alternate syndic are elected by the majority vote of the remaining holders of our common stock. Each member of the Statutory Committee is elected at the general annual shareholders’ meeting and serves for a one-year renewable term. Members of the Statutory Committee must be lawyers or accountants qualified under Argentine law and, for the accountants, TR No. 45. Our directors, officers and employees may not be members of the Statutory Committee, all members must be independent. Our Bylaws require the Statutory Committee to hold meetings at least once per month.
The primary responsibilities of the Statutory Committee consist of monitoring our management’s compliance with the General Companies Act, our Bylaws and the shareholders’ resolutions, and without prejudice to the role of external auditors, reporting to the shareholders at the general annual shareholders’ meeting regarding the reasonableness of our financial information. Furthermore, the members of the Statutory Committee are entitled to: (i) attend Board of Directors, Executive Committee and shareholders’ meetings, (ii) call special shareholders’ meetings when deemed necessary and general annual shareholders’ meetings when the Board of Directors fails to do so, and (iii) investigate written inquiries initiated by the shareholders. The Statutory Committee does not control our operations or evaluate management’s decisions, which are the exclusive responsibility of the Board of Directors.
The aggregate compensation paid by us for the fiscal year ended December 31, 2024 to the members of the Statutory Committee was Ps. 138 million. We do not provide pension, retirement or similar benefits for syndics and alternate syndics.
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The following table sets forth the current membership of our Statutory Committee, each of whom was appointed at the 2024 Shareholders’ Meeting, the year when each member was initially appointed and the year when their term expires:
Name
Member
since
Term
Expires
Position
Pablo Fabián Waisberg
8/21/2020
2025
Syndic
José Daniel Abelovich
4/21/2020
2025
Syndic
María Valeria Fortti
4/21/2020
2025
Syndic
Marcelo Héctor Fuxman
4/21/2020
2025
Alternate Syndic
Fernando Pedro Tetamanti
8/21/2020
2025
Alternate Syndic
Héctor Horacio Canaveri
4/19/2023
2025
Alternate Syndic
The present principal occupations and employment history of our syndics are set forth below:
Pablo Fabián Waisberg is a Certified Public Accountant from the University of Buenos Aires. He is currently an accounting and tax advisor. He is also a trustee of Petrosiel S.A., Areic S.A., Grainco S.A., Petroquímica Cuyo S.A., Sagua Argentina S.A., Noragua S.A., CIESA and Aguas de Santiago S.A. He was born on February 3, 1965.
José Daniel Abelovich obtained a degree in Accounting from the Universidad de Buenos Aires. He was  a founding member and partner of Abelovich, Polano & Asociados S.R.L during 35 years and now partner in the Accounting Firm Lisicki, Litvin  & Abelovich a member firm of Nexia International. Formerly, he was Manager of Harteneck, López y Cía/Coopers & Lybrand . He is a member, among others, of the supervisory committees of Cresud SA, IRSA SA, Hoteles Argentinos SA, Banco Hipotecario S.A. and CIESA He was born on July 20, 1956.
Valeria Fortti obtained a degree in accounting and a bachelor in Administration form the Universidad de Buenos Aires. She also holds a master’s in business administration from the same university. Since 1994, she has been a trustee in the Argentine National Auditing Commission. She is also a member of the supervisory committees of Emprendimientos Energéticos Binacionales S.A., Nucleoeléctrica Argentina S.A. and TELAM S.E. She was born on December 20, 1973.
Fernando Pedro Tetamanti obtained a degree in Accounting from the Universidad de Belgrano. He is partner of Tycompany advisors.
Marcelo Héctor Fuxman obtained a degree in Accounting from the Universidad de Buenos Aires. He is a partner of Abelovich, Polano & Asociados S.R.L., a member firm of Nexia International. He is also a member, among others, of the supervisory committees of Cresud, IRSA, Inversora Bolívar and Banco Hipotecario S.A. He was born on November 30, 1955.
Compensation Committee
We do not have a compensation committee. Compensation decisions are made by our senior management.
155
Corporate Governance Practices; NYSE Requirements
See “ Item 16G. Corporate Governance .”
D.
Employees
The following table sets out the number of employees per department as of December 31, 2024, 2023 and 2022:
Number of Employees as of December 31,
Department
2024
2023
2022
General
3
2
2
Administration, Finance and Services
121
121
118
Human Resources
31
29
27
Legal Affairs
11
11
11
Public and Regulatory Affairs
11
12
11
Safety and Environmental
28
30
30
Business
73
72
73
Internal Audit
4
5
4
Operations
865
840
814
Trainees program
-
3
5
Total
1,147
1,125
1,095
The following table sets out the number of employees according to geographical location as of December 31, 2024, 2023 and 2022:
Number of Employees as of December 31,
Location
2024
2023
2022
City of Buenos Aires
302
301
290
Province of Buenos Aires
438
445
444
Province of Chubut
53
55
54
Province of La Pampa
17
17
14
Province of Neuquén
185
156
141
Province of Río Negro
65
63
65
Province of Santa Cruz
84
85
84
Province of Tierra del Fuego
3
3
3
Total
1,147
1,125
1,095
As of December 31, 2024, 2023 and 2022, the number of temporary employees working for us was 60, 55 and 51, respectively.
Under Argentine law, in the event of a dismissal of an employee without cause, the employer is required to pay the terminated employee severance, the amount of which is regulated by the Argentine Labor Law (Section 245). The severance consists of payment of one month’s wages for each year of employment. The Argentine Labor Law stipulates limits to the severance payment; these limits affect only employees who earn high wages. However, the Supreme Court has ruled this severance payment limitation unconstitutional when it results in a loss of more than 33% for a terminated employee as compared to the unlimited amount.
The Supreme Court held the Law of Occupational Hazard Prevention unconstitutional as applied to contractors whose employees are injured in the course of employment, extending liability to the company that contracted with the contractor for the services.
Some courts have held that a company that contracts with a contractor for services is jointly liable for a contractor’s obligations to provide its workers and third-party service providers with social security benefits, wages, insurance, etc., even if the service for which the company contracts is not part of the company’s usual business.
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Recent years presented an inflationary scenario that required numerous meetings with union representatives. We maintain a positive relationship with each of the employee unions with representation before our company. The fruits of this work were the agreements reached with each such union, which have been submitted to the national labor authority for approval and inclusion in existing collective bargaining agreements. Those agreements effectively prevented trade union conflicts and work stoppages.
Our collective bargaining agreements with our unions were approved by the competent Argentine authority and maintain their ultra-activity as established by current legislation. Regarding the salary corresponding to 2024, we signed agreements for the period of April 2024 to March 2025. This is a consequence of the fact that tgs salary period comprises from the month of April of each year to the month of March of the following year. We are currently in negotiations with trade unions to conclude bargaining agreements for the period April 2025 – March 2026, but the status of this negotiation remains uncertain.
As of December 31, 2024, approximately 79% of our workforce is under trade union representation, having the same employment benefits. The unions that represent such employees are Unión del Personal Superior del Gas, Federación Argentina del Gas Natural de la República Argentina (which groups the unions of the capital, Bahía Blanca and Patagonia Sur) and Sindicato de Trabajadores de la Industria del Gas Natural Derivados y Afines of Neuquén and Río Negro.
E.
Share Ownership
As of April 17, 2024, the following members of our board of directors and our senior management had an ownership interest in our Class B shares of: Carlos Olivieri (0.001%), Carolina Sigwald (0.005%), Martín Skubic (0.001%) and Oscar Sardi (0.005%).
Class B shares held by directors and trustees do not have different voting rights than the other shareholders holding either Class A or Class B Shares. The directors, trustees and senior executives of the Company do not have options regarding the Company’s shares. There are no agreements that grant participation to employees in the assets of the Company, including the issuance or granting of options, shares or any other negotiable value.
F.
Disclosure of a registrant’s action to recover erroneously awarded compensation
Not applicable.
Item 7.
Major Shareholders and Related Party Transactions
A.
Major Shareholders
The following table sets forth certain information with respect to each shareholder known to us to beneficially own five percent or more of our common stock as of March 31, 2025:
157
Name of Beneficial Owner
Number of Shares (1)
Percent of Total
Common Shares
Class
CIESA
405,192,594
51.00
%
A

FGS
190,685,633
24.00
%
B

Holders through BYMA
77,500,669
9.76
%
B

Treasury shares (2)
41,734,225
5.25
%
B

ADRs through Citi
79,382,162
(1 )
9.99
%
B

Total
794,495,283
100.00
%
--

(1)
Equivalent to 15,876,432 ADRs.
(2)
After having received the approval of the ENARGAS the 2025 Shareholders´ Meeting will decide the capital reduction of our common stock due to the cancellation of 41,734,225 treasury shares and the corresponding amendment of our by-laws.
Our controlling shareholder is CIESA, which holds 51% of our common stock and all of our Class A shares and local and foreign investors hold the remaining shares of our common stock, distributed among minority holders with 25% and FGS (managed by ANSES) with 24%. CIESA is under co-control of Pampa Energía, which holds 50% of CIESA’s common stock, and GIP and PCT, who in the aggregate hold a combined 50% indirect ownership interest in the outstanding capital stock of CIESA, as follows: GIP holds 27.1% and PCT holds 22.90%.
Pursuant to the Pliego and the terms of the 2031 Notes, CIESA may not reduce its shareholding below 51% of our share capital.
FGS owns 24% of our common stock. On October 5, 2015, the Argentine Congress passed Law No. 27,181, declaring the protection of the Government’s shareholdings, including those forming part of the portfolio of the FGS, to be in the public interest, and creating the Argentine Agency of Government Investments in Companies as an enforcement authority. This agency was later replaced by the Secretary of Economic Policy and Development Planning of the Ministry of Finance. This agency is in charge of implementing any policies and actions related to the exercise by the Government of any rights arising out of the shares it holds.
In June 2016, the Argentine Congress passed Law No. 27,260, repealing or modifying earlier laws relating to the FGS. Among other things, Law No. 27,260 established that ANSES’ shareholding in public companies may not be sold, in most cases, without the prior authorization of the Argentine Congress if this sale represents a reduction in the FGS’s aggregate shareholding in public companies to below 7%.
Decree No 894/2016, which regulates Law No. 27,260, created the Secretary of Economic Policy and Development Planning. This new agency is responsible for executing policies relating to the exercise of rights corresponding to shareholdings of companies where the Government holds a minority interest. Decree No. 897/2016 states that the directors appointed by ANSES shall have the functions, duties and powers established by General Companies Act.
According to applicable regulations, any transfer or other action that limits, alters, cancels or modifies the destination, ownership, possession or nature of the shares held by the FGS which results in a decrease of the FGS’s holdings in a manner inconsistent with applicable law, shall not be conducted without prior express authorization of the Argentine Congress, with the following exceptions:

•
Public takeover bids addressed to all holders of such shares at a fair price authorized by the CNV, under the terms of Chapters II, III and IV of Title III of the Capital Markets Law.

158

•
Exchange of shares for other shares of the same or another company in the context of a merger, split or corporate reorganization processes.
All outstanding shares are entitled to one vote each and there are no preferred shares or any privilege.

Shareholders’ Agreement
As a result of changes in the shareholding of our controlling company, CIESA, a shareholders’ agreement was signed on May 17, 2011 (the “ Shareholders’ Agreement ”). This agreement governs certain matters relating to shareholder participation in CIESA and in us. This agreement grants the shareholders different rights and obligations with respect to us and CIESA, mainly regarding the designation of the members of our Board of Directors and our Statutory Committee.
The following table shows the current CIESA’s shareholding:
Shareholder
Number of shares
Class of shares
Ownership
(%)
Pampa Energía S.A.
319,409,348
A
50%
PEPCA S.A.
63,881,870
B
10%
PCT L.L.C.
114,987,364
B
18%
Grupo Inversor Petroquímica S.L.
140,540,114
B
22%
Total
638,818,696
As reported in “ Item 4. Our Information—A. Our History and Development—Controlling shareholders,” the control of CIESA / tgs is divided into two groups, on the one hand Pampa Energía, and, on the other hand, GIP and PCT. Thus, CIESA is under joint control between Pampa Group and GIP/PCT Group.
Transfers of Our Shares . Sales or transfer of our Class A shares must be approved by the affirmative vote of the shareholders representing at least sixty percent (60%) of the ordinary voting shares issued by CIESA.
Acts that require special approval of the Board of Directors. The Shareholders’ Agreement determines which decisions must be approved by an absolute majority of our Directors, including, among others: (i) the approval of the sale of assets outside the ordinary course of business; (ii) the approval of the annual budget and any modification thereof; (iii) approval to borrow or incur operating expenses in an amount that exceeds, in both cases, more than 10% of the amount approved in the annual budget; (iv) the approval to establish or modify wage and compensation policies; and (vi) the termination or extension of the SATFO.
Changes in the shareholders’ structure of CIESA
For more information to respect of the changes in the shareholding composition of CIESA see above. On its behalf, the mentioned share changes were duly authorized by ENARGAS and by the National Commission of Defense of Competition of Argentina.
Repurchase of Shares
On May 9, 2018, our Board of Directors approved a first program for the acquisition of our Shares in the open market. Since then, our Board of Directors has approved new share repurchase programs. For additional information of such programs, please see “Item 16E.Purchases of Registered Equity Securities of the Issuer by the Issuer and Affiliated Purchasers.” As of December 31, 2021, we had 41,734,225 treasury shares, representing 5.25% of the total share capital. The acquisition cost of the same in the market amounted to Ps. 74,083 million (together with the trading premium on treasury stock of Ps. 21,491 million) which, in accordance with the provisions of Title IV, Chapter III, article 3.11.c) and e) of the CNV’s Rules, restricts the amount of the realized and liquid gains mentioned above that we may distribute to our shareholders.
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On April 4, 2022, the Shareholders Meeting approved the extension of the holding period for treasury shares in the portfolio was approved for 3 years starting from their expiration, that is, until November 11, 2025. The Shareholders Meeting to be held on April 30, 2025, has as an agenda item, the consideration of the decision to cancel the treasury shares held in the portfolio.
B.
Related Party Transactions
Transactions with related parties are carried out in the ordinary course of business according to common practices and in accordance with applicable laws and regulations.
SATFO
Pampa Energía is our technical operator, according to the approval of ENARGAS in June 2004, and subject to the terms and conditions of the SATFO which provides that Pampa Energía is in charge of providing services related to the operation and maintenance of the natural gas transportation system and related facilities and equipment, to ensure that the performance of the system is in conformity with international standards and in compliance with certain environmental standards. Pursuant to this agreement, Pampa Energía, also provides financial advice to us. For these services, we pay a fixed annual amount or a monthly fee based on a percentage of our operating income, the higher of the before mentioned. At the Shareholders Meeting held on October 17, 2019, certain modifications to the amount and term of this agreement were approved. For additional information see “ Item 4. Our Information—B. Business Overview—Natural Gas Transportation—Pipeline Operations— Technical Assistance Services Agreement . ”
Commercial transactions
In the normal course of business, we carry out transactions with related parties of the following nature:

•
agreements for the purchase of natural gas used as RTP;

•
natural gas transportation services;

•
liquids sales; and

•
The board of directors approved the formation of the UT together with SACDE. The corporate purpose of the UT is to assembly of pipes for the construction of the project of “Expansion of the Natural Gas Transportation and Distribution System” in the province of Santa Fé, called through National Public Bid No. 452-0004-LPU17 by the former MINEM (the “Santa Fe Work”).

•
On October 27, 2017, tgs - SACDE UT executed the corresponding work contract with the former MINEM. UT will continue to exist until its purpose has been fulfilled, that is, once the work involved in the Santa Fe Work and until the end of the warranty period, set at 18 months from the provisional reception.

160
In addition, we have entered into a UT operation with SACDE through which work related to the construction of the Regional II - Recreo / Rafaela / Sunchales Gas Pipeline will be carried out. Construction works are still in progress.
Leasing with Pampa Energía
On August 11, 2016, we entered into a financial lease with Pampa Energía. The term of the agreement is for 10 years and it determines that during nine years and 11 months we will pay Pampa Energía a monthly fee of U.S.$623,457, before taxes. A purchase option is established on the leased property in our favor to be exercised within 30 days prior to the termination of the agreement.
The objective of this financial lease was to finance the acquisition of property, plant and equipment located in the Río Neuquén hydrocarbon area for a net book value of Ps. 11,540 million, which allowed us to expand our midstream services provided in that area.
The details of significant transactions with related parties as of December 31, 2024, are as follows:
Revenues
Costs
Financial results
Company
Natural Gas
Transportation
Production
And
Commercialization of
Liquids
Midstream
Gas
Purchase
and others
Compensa-
tion for
technical
assistance
Revenues
for
administrative
services
Selling
expenses
Interest
expenses
Interest income /
fair value results
(in thousands of pesos)
Controlling shareholder:
CIESA
-
-
-
-
-
145
-
-
-
Company which exercises joint control on the controlling shareholder:
Pampa Energía
17,086,616
16,099,079
49,612,454
34,550,518
26,405,660
-
-
1,365,343
-
tgs´ associates with significant influence:
Link
-
-
302,193
-
-
-
-
-
-
Other related companies:
SACDE.
-
-
217,663
-
-
-
-
-
-
Comercializadora e inversora S.A.
2,107,038
-
-
-
-
-
-
-
Transener S.A.
-
-
376
-
-
-
-
-
-
CT Barragan
-
-
128,844
-
-
-
-
-
784,372
Fundación tgs
-
-
-
-
-
-
540,845
-
-
Total
19,193,654
16,099,079
50,261,530
34,550,518
26,405,660
145
540,845
1,365,343
784,372
Additionally, during the year ended December 31, 2024, the Company received from SACDE Sociedad Argentina de Construcción y Desarrollo Estratégico S.A., construction engineering services for Ps. 131,330,449 which are capitalized within the balance of property, plant and equipment.
As of December 31, 2024, we have a balance of Ps. 20,471 million corresponding to dollar linked notes issued by CT Barragán S.A. and Pampa Energía.
For additional information regarding revenues, costs, and outstanding balances relating to transactions with related parties as of and for the year ended December 31, 2024, see Note 21 to our Financial Statements included in this Annual Report on Form 20-F.
C.
Interests of Experts and Counsel
Not applicable.
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Item 8.
Financial Information
A.
Consolidated Statements and Other Financial Information
Our Financial Statements, which are set forth in the index to Financial Statements in Item 18, are filed as part of this Annual Report.
Exports
For additional information regarding our exports, see “ Item 4. Our Information—B. Business Overview—Liquids Production and Commercialization.”
Legal and Regulatory Proceedings
In addition to the matters discussed below, we are a party to certain lawsuits and administrative proceedings arising in the ordinary course of business. Although no assurances can be given, we believe we have meritorious defenses, which we will assert vigorously to challenge all claims, and that possible liabilities from these claims will not have a material adverse effect on our consolidated financial position or results of operations.
Tax Claims
Action for annulment of ENARGAS Resolutions
On April 11, 2012, we filed a judicial action before the National Court of First Instance in the Federal Administrative Litigation Court No. 1 (the “ Court ”) in order to obtain the declaration of invalidity of Decree No. 2,067/08 and the Gas Charge Resolutions as well as the declaration of unconstitutionality of the Natural Gas Processing Charge. As of the date of this Annual Report, the case is pending judgment.
On July 5, 2012, the Court issued in our favor a precautionary measure that suspended the charge on the terms set forth in the Gas Charge Resolutions. This decision was appealed in different opportunities by the Government and as a result the term of the precautionary measure was limited to six months. However, at the end of such term, we were entitled to obtain a new precautionary measure for a similar period.
The National Court of Appeals in Contentious Administrative rejected the extraordinary appeal filed by the Government against the judgment of that court that confirmed the rejection made by the Court at the request of ENARGAS to declare abstract the legal action initiated by us in accordance with the precedent “Alliance” issued by the Supreme Court in December 2014.
On March 26, 2019, we were served notice of the first instance judgment rendered in the proceedings, which upholds the legal action filed by us and declares the unconstitutionality of Executive Decree No. 2,067/08, MPFIPyS Resolution No. 1451/08 and the Gas Charge Resolutions, as well as of any other act aimed at enforcing the Executive Decree No. 2067/08, and therefore declare invalid said regulations. On March 29, 2019, the Secretary of Energy appealed the judgment, which was granted on April 3, 2019. On October 29, 2019, the judge resolved to extend the injunction (“ medida cautelar” ) (which prevents the Government from requiring us to pay the charges for the period between November 2011 and March 2016) until April 29, 2020 or until the award becomes final, whichever occurs first. The injunction has been extended until July 1, 2021.
Our management believes we have sufficient valid arguments to defend our position, and thus, we have not recorded any liability from the charge for natural gas consumptions from the date of obtaining the injunction until April 1, 2016, and of the effective date of Resolution No. 28 issued on March 28, 2016 by the former Ministry of Energy.
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On May 14, 2021, we were notified of the judgment handed down by Chamber I of the Chamber in Administrative Litigation that (i) has revoked the decision of the First Instance Judge and (ii) has imposed the costs in both instances in the order caused. tgs considers that it possesses reasonable arguments to defend his position on the substantive question raised and, for that reason, he appealed the ruling of the Chamber in Administrative Litigation.
On June 4, 2021, we filed an extraordinary federal appeal against the sentence of the Chamber, which was answered by ENARGAS and the Government and was granted by the Court of Appeals itself on July 14, 2021.
On August 4, 2021, we submitted a complaint to the Supreme Court of Justice of the Nation (“CSJN”) regarding the partial denial of the extraordinary federal appeal related to the objection of arbitrariness. The ongoing process is currently being handled by Secretary No. 4 of the CSJN. The primary case file was forwarded to the CSJN on August 20, 2021 and is presently under review.
By virtue of the precautionary measure issued, and its 12 extensions obtained, as well as the favorable ruling obtained in the first instance, the existence of favorable precedents issued by the Supreme Court with respect to other processors of natural gas and the granting of the extraordinary appeal that will result in the Supreme Court ruling on the case, the Management of tgs and its legal advisors consider that they have solid arguments to defend their position and that it is probable the obtention of a favorable resolution to their interests on the substantive issue. Therefore, no provision has been made for the eventual liability for the increase in the charge to finance the importation of natural gas applicable to natural gas consumptions related to the processing activity at the Cerri Complex for the period between the date of obtaining the precautionary measure and April 1, 2016, the effective date of Resolution No. 28/2016.
This resolution has annulled the acts that determined the value of the charge established by Decree 2067, for which as from April 1, 2016, ENARGAS and the body in charge of the collection thereof have ceased to collect the increase established by the Resolutions.
Regarding the last extension of the precautionary measure, expired on July 1, 2021, tgs has not requested a new extension, due to the premature procedural stage in which the appeal filed against the judgment of the Chamber is found. On December 16, 2024, the file was sent to the Attorney General’s Office, with no news received as of the date.
Given the complex procedural instance, the nature of charge 2067, the background presented in this and other legal cases initiated against charge 2067, as of the date of issuance of this Annual Report, it is not possible to make a definitive quantification of the amount that should be paid by tgs in case of not obtaining a favorable ruling from the Supreme Court, while an eventual demand for payment in the current circumstances may be challenged and questioned by us in the framework of the corresponding administrative and judicial instances, where the amount of the charge may be debated.
Other Litigation
Below is a description of certain other litigation in which we are involved. No assurances can be provided as to the outcome of these proceedings.

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Environmental matters
We are subject to extensive environmental regulations in Argentina. Our management believes that our current operations are in material compliance with applicable environmental requirements, as currently interpreted and enforced. We have not incurred in material environmental liabilities as a result of our operations to date. As of December 31, 2024 and 2023, the total amount of these provisions amounted to Ps. 91.1 million and Ps. 176.6 million, respectively.
Others
In addition to the matters discussed above, we are a party to certain lawsuits and administrative proceedings which involve taxation, labor claims, social security, administrative and others arising in the ordinary course of business. Our management and our legal advisors estimate that the outcome of these differences will not have significant adverse effects on our financial position or results of operations. As of December 31, 2024 and 2023, the total amount of these provisions amounted to Ps. 330.0 million and Ps. 366.7 million, respectively.
Dividend Distribution Policy
According to Argentina’s General Companies Act , dividends may be lawfully declared and paid only out of retained earnings reflected in the financial statements that have been approved by shareholders, if losses for prior fiscal years have been absorbed, if the applicable payment has been expressly approved by our shareholders and applicable legal reserves have been created, as described below.
To that effect, every year our Board of Directors must submit our financial statements for the immediately preceding fiscal year, together with reports thereon by our statutory committee (“ Statutory Committee ”), for the consideration and approval of the shareholders at the General Annual Shareholders’ Meeting which must approve our annual financial statements and determine the allocation of net income for such year, within four months of the close of the fiscal year, that is, for tgs before April 30 of each year. Pursuant to the General Companies Act and the CNV Rules, we are required to allocate a legal reserve (“ Legal Reserve ”) equal to at least 5% of each year’s net income (as long as there are no losses for prior fiscal years pending to be absorbed) until the aggregate amount of such Legal Reserve equals 20% of the sum of (i) “common stock nominal value” plus (ii) “inflation adjustment to common stock,” as shown in our consolidated statement of changes in equity. If there are any losses pending to be absorbed from prior fiscal years, such 5% should be calculated on any excess of the net income over such losses, if any. Dividends may not be paid if the Legal Reserve has been impaired, nor until it has been fully replenished. The Legal Reserve is not available for distribution as a dividend.
Pursuant to our Bylaws, after the allocation to the Legal Reserve has been made, an amount will be allocated to pay dividends on preferred stock, if any, and an amount equal to 0.25% of the net income for the year will be allocated to pay the statutory employee profit-sharing. The balance of the retained earnings for the year may be distributed as dividends on common stock or retained as a voluntary reserve, as determined at the General Annual Shareholders’ Meeting. For information on dividend taxation, see “ Item 10. Additional Information—E. Taxation.”
In addition, under the General Companies Act, our shareholders may establish additional voluntary reserves from time to time and for different purposes. Once established, the terms and conditions of any voluntary reserve cannot be changed without the prior approval of the shareholders.
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In our Board of Directors meeting held on December 18, 2019, the Board approved a written dividend policy. This policy provides that in making its evaluation, our Board of Directors should consider our financial results, our liquidity, our future financing needs and other information, including economic and financial projections for both our and the economy as a whole. Each year, our Board evaluates whether to submit a distribution proposal to the shareholders’ meeting.
Nevertheless, there are a number of restrictions that limit our ability to distribute dividends, including:

•
Per the Tax Reform, for fiscal periods beginning on January 1, 2018, distribution of dividends made to human persons and foreign beneficiaries are subject to a tax withholding which we must withhold and enter to the tax authority as a single and definitive payment when the dividends are paid. This additional tax will be 7% or 13%, depending on whether the dividends distributed correspond to earnings of a fiscal period at the enacted income tax rate of 30% or 25%, respectively. For these purposes it is considered, without admitting proof to the contrary, that the dividends that are made available correspond, firstly, to the oldest accumulated earnings.

•
The acquisition of treasury shares and the additional paid-up capital for the distribution of treasury shares in accordance with CNV Rules, restricts the amount of the retained earnings that the Company may distribute. See “ Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders—Repurchase of Shares. ”

•
According to the BCRA regulations, under certain conditions, we have to obtain its previous authorization before transferring dividend payments outside of Argentina. For additional information see “Item 10. Additional Information—D. Exchange Controls.”
Further, our ability to make dividend payments may be limited by covenants in our existing debt instruments or in debt instruments we enter into in the future, and by our subsidiaries’ ability to generate income and cash flows to pay dividends to us. In particular, under the indenture dated July 24, 2024 (the “ 2031 Notes Indenture ”), entered into with Delaware Trust Company as trustee, co-registrar, paying agent and transfer agent, and Banco Santander Rio S.A., as registrar, Argentine paying agent, Argentine transfer agent and representative of the trustee in Argentina, relating to the issuance of our medium-term note program 8.500% senior notes due 2031 (the “ 2031 Notes ”), we may pay dividends as long as immediately after giving effect to such dividend payment we are able to incur at least U.S.$1.00 (other than “Permitted Indebtedness” as defined in the 2031 Notes Indenture) under the limitation of debt covenant of the 2031 Notes Indenture. To incur debt (other than Permitted Indebtedness), the 2031 Notes Indenture requires that (i) no default exists under the 2031 Notes Indenture at the time of such incurrence and (ii) (a) the Consolidated Coverage Ratio (as defined in the 2031 Notes Indenture, which is the ratio of our consolidated adjusted EBITDA to our consolidated interest expense) would be greater than or equal to 2.0:1.0; and (b) the Consolidated Debt Ratio (as defined in the 2031 Notes Indenture, which is the ratio of our consolidated total indebtedness to our consolidated adjusted EBITDA) would be less than or equal to 3.50:1.0. See “ Item 10. Additional Information—C. Material Contracts—Debt Obligations.”
Moreover, per CNV Rules the amounts subject to distribution are restricted up to the acquisition cost of treasury shares and the additional paid-up capital accounts balance as discussed elsewhere herein.
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For additional information regarding dividend payment restrictions see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Shares and ADSs—Shareholders outside Argentina may face additional investment risk from currency exchange rate fluctuations in connection with their holding of our shares or ADSs represented by ADRs. Exchange controls imposed by the Government may limit our ability to make payments to the Depositary in U.S. dollars, and thereby limit ADR holders’ ability to receive cash dividends in U.S. dollars.”
A summary of the dividends declared and paid during the five most recent fiscal years is set forth below:

Dividends declared and paid
Year ended
December 31,
(in millions
of Ps.) (1)
(in millions
of U.S.$) (2)
(Ps.per
share) (1)
(U.S.$ per
share) (2)
(U.S.$ per
ADS) (2)
2020
-
-
-
-
-
2021
-
-
-
-
-
2022
-
-
-
-
-
2023
-
-
-
-
-
2024
-
-
-
-
-

(1)
Stated in Ps.at Current Currency.
(2)
Stated in U.S. dollars translated from pesos at the exchange rate in effect on the payment date.
The General Annual Shareholders’ Meeting held on April 17, 2024 approved to allocate Ps. 2,560.6 million to the Legal Reserve and to create a Ps. 1,079,252 million “Reserve for capital expenditures, acquisition of treasury shares and/or dividends” (the “2024 Reserve” ) and to delegate to the Board of Directors the decision to use the 2024 Reserve to make investments, distribute dividends or repurchase stock. The amount of the 2024 Reserve will be restated in constant pesos at any given time pursuant to CNV Resolution No. 777/2018 . To determine the maximum distributable amount out of the 2024 Reserve, the restated amount of the stock that has actually been repurchased and the additional paid-up capital must be determined in advance, since an amount equal to such stock already repurchased cannot be released to shareholders pursuant to the provisions of the CNV Rules.
B.
Significant Changes
No undisclosed significant change has occurred since the date of our Financial Statements.
Item 9.
The Offer and Listing
A.
Offer and Listing Details
Not Applicable.
B.
Plan of Distribution
Not Applicable.
C.
Markets
The Argentine Securities Market . In Argentina, the oldest and largest exchange is the Buenos Aires Stock Exchange ( “BASE” ), founded in 1854. The BASE was the exchange on which the majority of equity trades in Argentina were executed. BYMA is the result of an alliance between BASE and Mercado de Valores de Buenos Aires S.A. (“ MERVAL ”), dated 2013. From April 17, 2017 all the shares previously listed in the MERVAL were transferred to BYMA without any further consequence for listed companies.
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Securities may also be listed and traded through over-the-counter market brokers who are linked to an electronic reporting system. The activities of such brokers are controlled and regulated by the Mercado Abierto Electrónico S.A. (the “ MAE ”), an electronic over-the-counter market reporting system that functions independently from the BYMA. Under an agreement between the BASE and the MAE, trading in equity and equity-related securities is conducted exclusively on the BASE (now BYMA) and trading in corporate debt securities is conducted on both the MERVAL/BASE (now BYMA) and the MAE. Trading in Government securities, which are not covered by the agreement, may be conducted on either or both of the BYMA and the MAE. The agreement does not extend to other Argentine exchanges.
Changes to the legal framework of securities trading have been introduced, permitting issuance and trading of new, non-bank financial products in the Argentine capital markets, including commercial paper, new types of corporate bonds, futures and options. The Government deregulated brokerage fees and eliminated transfer and stamp taxes on securities transactions in November 1991.
The Capital Markets Law, enacted in December 2012, sets out the rules to govern capital markets, its players, and the securities traded therein subject to the CNV regulation and monitoring. On May 9, 2018, the Argentine Congress approved the Act on Productive Financing No. 27,440, which introduces significant reforms to the Capital Markets Law, the Law on Common Investment Funds No. 24,083, the Argentine Law No. 23,576, as amended by Argentine Law No. 23,962 (the “ Negotiable Obligations Law ”), and other regulations, with the objective of promoting the development of the local capital market. Among other items, the new law seeks to broaden the base of investors and companies that can participate in the capital market, promoting productive financing, especially with respect to micro, small and medium enterprises, creating a regime that promotes and facilitates their access to financing. Likewise, this law provides for the modification of certain tax provisions, tax regulations, regulations related to derivative instruments and a program for the promotion of financial inclusion. The reforms also establish some limitations to the powers granted to the CNV by the Capital Markets Law.
The Capital Markets Law provides rules and provisions guided by the following goals and principles:

•
Promoting the participation of small investors, union associations, industry groups and trade associations, professional associations and all public savings entities in the capital market, particularly encouraging mechanisms designed to promote domestic savings and channel such funds towards the development of production;

•
Strengthening mechanisms for the protection of and prevention of abuses against small investors and for the protection of consumers’ rights;

•
Promoting access of small- and medium-sized companies to the capital market;

•
Fostering the creation of a federally integrated capital market through mechanisms designed to achieve an interconnection of computer systems from different trading markets, with the use of state-of-the-art technology; and

•
Encouraging simpler trading procedures available to users to attain greater liquidity and competitiveness in order to provide the most favorable conditions for the implementation of transactions.

167
The CNV is a self-administered agency of the Government with jurisdiction covering the territory of Argentina, governed by the provisions contained in the Capital Markets Law and the CNV Rules, among other related statutory regulations. The relationship of the CNV and the Argentine Executive Branch is maintained through the Ministry of Finance, which shall hear any appeals filed against decisions made by the CNV, notwithstanding any other legal actions and remedies contemplated in the Capital Markets Law.
The CNV supervises and regulates the authorized markets in which the securities and the collective investment products are traded, the corporations authorized in the public offer regime, and all the other players authorized to operate in the public offer regime, as the registered agents, the trading agents, the financial advisors, the underwriters and distributors, the brokers, the settlement and clearing agents, the managers of collective investment products, the custodians of collective investment products, the collective depositories, and the risk rating agencies, among others.
The BYMA. Pursuant to the Capital Markets Law, the CNV has authorized nine stock markets since September 2014. BYMA is a private entity whose stock capital is composed of publicly traded shares. On December 29, 2016, BYMA was authorized by CNV as a market, Registry No. 639. BYMA’s main functions comprise trading as well as performing as a Clearing House and Central Counterparty (CCP) in the settlement and monitoring of transactions carried out through its trading systems.
BYMA’s main functions under the Capital Markets Law are as follows:

•
issue regulations that allow stock brokers and brokerage firms authorized by the CNV to perform their duties;

•
authorize, suspend and cancel the listing and/or trading of negotiable securities pursuant to the provisions set forth in its bylaws;

•
issue regulations that ensure veracity in the record of prices and trades;

•
issue the regulations and policies deemed necessary to ensure transparency in the trades conducted by member stock brokers;

•
fix the margins that member brokers are to comply with for each type of trade BYMA guarantees; and

•
set up arbitration tribunals.
These powers may be exercised by BYMA or delegated, in whole or in part, to other qualified entities. Accordingly, BYMA has entered into an agreement with BASE to enforce items b) and f), due to the fact that BASE has been authorized to operate as a qualified entity, pursuant to Capital Markets Law.
New York Stock Exchange. The ADSs, each representing five Class B Shares, are listed on the NYSE under the trading symbol “TGS.” The ADSs began trading on the NYSE in November 1994, and have been issued by the Depositary.
According to data provided by the Depositary, as of March 31, 2025, there were 15,876,432 ADSs outstanding. Such ADSs represented approximately 9.99% of the total number of issued and outstanding Class B Shares as of such date.
Market Capitalization. Investors in the Argentine securities market are primarily individuals, companies and institutional investors consisting of a limited number of mutual funds.
168
D.
Selling Shareholders
Not applicable.
E.
Dilution
Not applicable.
F.
Expenses of the Issue
Not applicable.
Item 10.
Additional Information
A.
Share Capital
Not applicable.
B.
Memorandum and Articles of Association
Information contained in Item 14 of tgs’s Registration Statement on Form F-1 (Registration No. 33-85178) is hereby incorporated by reference.
Bylaws amendments
After having received the ENARGAS approval for the reduction of 41,734,225 class B shares due to the cancellation of our treasury shares, it will be put into consideration to the Annual General, Special and Class Meeting to be held on April 30, 2025 the following items:

•
Capital reduction due to cancellation of tgs’ treasury shares for an amount of AR$ 41,734,225 representing 41,734,225 class B book-entry shares of a nominal value of AR$ 1 each and entitled to 1 vote per share.

•
Amendment of Section 5, 6 and 13 of our Bylaws.

•
Consolidated version of tgs’ Bylaws which is presented below:
SECTIONS IN FORCE
AMENDMENT PROPOSED
SECTION 5. The capital stock and its evolution shall be recorded in the Company’s financial statements as it may result from the capital increases registered with the Public Registry of Commerce and shall be represented by common Class A, Class B and Class C shares. The capital stock may be increased by decision of the Shareholders’ Meeting without any limitation and without the need to amend the Bylaws. Shares shall be issued in book-entry form, of a nominal value of One (1) Peso each and entitled to One (1) vote per share. Class C Shares shall remain under the regime of the Stock Ownership Program [Programa de Propiedad Participada] in compliance to the provisions of Chapter III of Law 23,696. Class C shares for which the purchase price has been fully paid by purchaser, may be converted into Class B shares at the request of the holders thereof, after three years have elapsed from the organization of the Corporation.-
SECTION 5. The capital stock and its evolution shall be recorded in the Company’s financial statements as it may result from the capital increases registered with the Public Registry of Commerce and shall be represented by common Class A and Class B and Class C shares. The capital stock may be increased by decision of the Shareholders’ Meeting without any limitation and without the need to amend the Bylaws. Shares shall be issued in book-entry form, of a nominal value of One (1) Peso each and entitled to One (1) vote per share. Class C Shares shall remain under the regime of the Stock Ownership Program [Programa de Propiedad Participada] in compliance to the provisions of Chapter III of Law 23,696. Class C shares for which the purchase price has been fully paid by purchaser, may be converted into Class B shares at the request of the holders thereof, after three years have elapsed from the organization of the Corporation.-

169
SECTION 6. The issue of common shares corresponding to future capital increases shall be made in the following proportion: − FIFTY-ONE PER CENT (51%): Class A shares and FORTY-NINE PER CENT (49%): the addition of Class B and Class C shares, and the same proportion existing between these two classes at the moment such issue was decided shall be maintained. Class A, Class B and Class C shareholders shall be entitled to preemptive rights in the subscription for new shares to be issued by the Company, within their same class and in proportion of their respective holdings, and they shall be entitled to exercise purchase option pursuant to Section 194 et seq. of Law No. 19,550. Should any balance of unsubscribed shares remain, such shares may be offered to third parties. When Class C shares are issued and offered for subscription, the term of payment shall be the maximum term authorized by law.-
SECTION 6. The issue of common shares corresponding to future capital increases shall be made in the following proportion: − FIFTY-ONE PER CENT (51%): Class A shares and FORTY-NINE PER CENT (49%): the addition of Class B and Class C shares, and the same proportion existing between these two classes at the moment such issue was decided shall be maintained. Class A shares shall represent FIFTY-ONE PERCENT (51%) or more of the capital stock, while Class B shares shall represent the remaining capital stock. Class A and Class B and Class C shareholders shall be entitled to preemptive rights in the subscription for new shares to be issued by the Company, within their same class and in proportion of their respective holdings, and they shall be entitled to exercise purchase option pursuant to Section 194 et seq. of Law No. 19,550. Should any balance of unsubscribed shares remain, such shares may be offered to third parties. When Class C shares are issued and offered for subscription, the term of payment shall be the maximum term authorized by law.- The Company’s Board of Directors, at the request of Class A shareholders, may convert common Class A shares into common Class B shares, provided that, at the time of conversion, no regulatory restrictions exist and that, following such conversion, Class A shares continue to represent at least 51% of the capital stock.
170
SECTION 13. Pursuant to the Stock Ownership Program referred to in Section 5, the Corporation shall issue, in favor of its employees belonging to any hierarchy, Employees’ Participation Bonds pursuant to the terms of article 230 of Law 19,550 (R.T. Decree number 841/84), so as to distribute among beneficiaries a percentage of the profits for the year, after taxes, equivalent to ZERO POINT TWENTY-FIVE PER CENT (0.25%). Interests corresponding to the bonds shall be paid to beneficiaries at the time payment of dividends is made. Certificates representing Employees’ Participation Bonds shall be delivered by the Corporation to the holders thereof. Such Employees’ Participation Bonds shall be personal and non-transferable and ownership thereof shall terminate at the time the labor relationship concludes, regardless of the reason, and the same shall not grant to other bondholders any right to accretion. The Corporation shall issue a numbered certificate for each holder, which shall bear the quantity of bonds corresponding thereto. Such certificate shall be required to exercise bondholder’s rights. Each payment shall be evidenced therein. Bond issue conditions shall only be modified by resolution adopted in a special Meeting called pursuant to the terms of articles 237 and 250 of the Companies Act. Interest corresponding to bondholders shall be calculated as expenses and shall be due under the same conditions than the dividends. In case of issue of shares corresponding to future capital increases in which Class “C” shares had not been fully paid-in, up to 50% of the interest corresponding to each holder of class “C’’ shares could be applied to the payment of the balance owed.-
SECTION 13. Pursuant to the Stock Ownership Program referred to in Section 5, the Corporation shall issue, in favor of its employees belonging to any hierarchy, Employees’ Participation Bonds pursuant to the terms of article 230 of Law 19,550 (R.T. Decree number 841/84), so as to distribute among beneficiaries a percentage of the profits for the year, after taxes, equivalent to ZERO POINT TWENTY-FIVE PER CENT (0.25%). Interests corresponding to the bonds shall be paid to beneficiaries at the time payment of dividends is made. Certificates representing Employees’ Participation Bonds shall be delivered by the Corporation to the holders thereof. Such Employees’ Participation Bonds shall be personal and non-transferable and ownership thereof shall terminate at the time the labor relationship concludes, regardless of the reason, and the same shall not grant to other bondholders any right to accretion. The Corporation shall issue a numbered certificate for each holder, which shall bear the quantity of bonds corresponding thereto. Such certificate shall be required to exercise bondholder’s rights. Each payment shall be evidenced therein. Bond issue conditions shall only be modified by resolution adopted in a special Meeting called pursuant to the terms of articles 237 and 250 of the Companies Act. Interest corresponding to bondholders shall be calculated as expenses and shall be due under the same conditions than the dividends. In case of issue of shares corresponding to future capital increases in which Class “C” shares had not been fully paid-in, up to 50% of the interest corresponding to each holder of class “C’’ shares could be applied to the payment of the balance owed.-
C.
Material Contracts
Debt Obligations
2031 Notes
On July 24, 2024, we issued the 2031 Notes in the aggregate principal amount of U.S.$490 million, the proceeds of which were used to redeem all of our then outstanding 6.750% of the 2025 Notes pursuant to (i) a tender offer to purchase for cash (the “ Tender Offer ”) any and all of our 2018 Notes launched on July 15, 2024, which expired on July 19, 2024, and (ii) the optional redemption provisions of the 2018 Indenture. On July 24, 2024, U.S.$299,439,000 in aggregate principal amount of the 2018 Notes (or approximately 63.67% of the 2018 Notes then outstanding), were redeemed pursuant to the Tender Offer and the remaining 2018 Notes were redeemed on July 31, 2024 pursuant to the provisions of the 2018 Indenture.
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The 2031 Notes were issued pursuant to the program, which provides for the issuance of up to a maximum principal amount of U.S.$2,000 million in notes, and was authorized by resolutions of an extraordinary shareholders’ meeting dated April 25, 2013, April 13, 2017 and April 19, 2023, and by resolutions of our Board of Directors adopted on July 23, 2013, December 23, 2013, June 29, 2017, August 7, 2023 and July 15, 2024. The program was also authorized by the CNV by Resolution No. 17,262 dated January 3, 2014, Resolution No. 18,938 dated September 15, 2017 and Resolution No. DI-2023-52-APN-GE# dated October 11, 2023.
The scheduled maturity date of the 2031 Notes is July 24, 2031. The 2031 Notes accrue interest at an annual fixed rate of 8.500%, payable semiannually.
We are also permitted to redeem the 2031 Notes in whole, but not in part, at a price equal to 100% of the principal amount outstanding if, as a result of any change in, or amendment to, the laws or regulations of Argentina or any governmental authority thereof or therein having power to tax or as a result of any change in the application or official interpretation of such laws or regulations, we become obligated to pay additional amounts with respect to the 2031 Notes and cannot avoid such obligation by taking reasonable measures available to us.
In the event that the Republic of Argentina, directly or indirectly, through any one or more controlled entities, as a result of a condemnation, nationalization, confiscation, seizure, compulsory acquisition, expropriation or otherwise under power of eminent domain becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of at least 51% of our outstanding shares with voting power, holders of the 2031 Notes are entitled to require us to purchase all or a portion of the 2031 Notes at a price in cash equal to 101% of the principal amount of the 2031 Notes so purchased. The 2031 Notes are general, direct, unsecured and unsubordinated obligations and rank at all times pari passu in all respects, without any preference among themselves, with all of our other present and future unsecured and unsubordinated obligations, other than obligations preferred by statute or by operation of law.
Covenants
We are subject to several restrictive covenants under the terms of the 2031 Notes, which include, among others, the following:

•
limitations on our ability to terminate our License or take any action that, in our reasonable opinion, would result in the termination of the License. We may not agree to amend or waive any terms of the License unless such amendment or waiver would not, in our reasonable opinion, adversely affect (i) our ability to meet our obligations under the 2031 Notes on a timely basis or (ii) any material rights or interest of the trustee or the holders under the indenture or the 2031 Notes;

•
a requirement that we not enter into or consent to any amendment, restatement or modification of the SATFO or any successor agreement thereto, other than an amendment, restatement or modification that is not materially adverse to us and our subsidiaries, taken as a whole;

•
a limitation on our and our subsidiaries’ ability to create liens on our property, assets or revenues, other than certain permitted liens;
172

•
a limitation on our and our subsidiaries’ ability to incur additional indebtedness unless we meet certain financial ratios and no event of default exists, other than certain permitted indebtedness;

•
a limitation on our and our subsidiaries’ ability to pay dividends and making certain other restricted payments and investments with respect to any fiscal year or fiscal semester unless: (i) no event of default or potential event of default shall have occurred and be continuing and (ii) immediately after giving effect to such restricted payment, we would be able to incur at least U.S.$1.00 of additional indebtedness pursuant to the limitation on indebtedness covenant;

•
limitations on our and our subsidiaries’ ability to enter into sale-leaseback transactions;

•
limitations on our and our subsidiaries’ ability to enter into a transaction with an affiliate, unless such transaction is on terms that are not materially less favorable to us or our subsidiary than we or such subsidiary would obtain in a comparable arm’s-length transaction with a non-affiliate;

•
a limitation on our and our subsidiaries’ ability to sell our assets; and

•
a limitation on our and our subsidiaries’ ability to enter into a merger, consolidation or similar transaction.
Events of Default
The 2031 Notes include the following events of default, among others:

•
default in the payment of principal, interest or any other amount due under the terms of the 2031 Notes after a specified grace period with respect to payments other than principal;

•
breach of obligations contained in the 2031 Notes after a specified cure period;

•
cross-default and cross-acceleration with respect to other debt obligations with an aggregate principal amount equal to or exceeding U.S.$50 million;

•
the occurrence of certain bankruptcy events or enforcement proceedings;

•
enforcement of monetary judgments exceeding U.S.$50 million; and

•
the occurrence of certain material adverse events with respect to our License, such as the revocation, suspension for a period of greater than 180 days or termination of the License.
Lease with Pampa Energía
On August 11, 2016, we entered into a financial lease agreement with Pampa Energía. Starting on such date and for a term of nine years and 11 months (the “ Leasing Payment Term ”), Pampa Energía is leasing to us certain assets for a book value as of December 31, 2024 of Ps. 11,454 million, which we utilize in our Midstream business segment. Monthly lease payments to Pampa Energía amount to U.S.$0.6 million, before taxes.
Within 30 days of the expiration date of the Leasing Payment Term, we may exercise the option to purchase the assets leased to us under the agreement. The purchase option price will be equivalent to U.S.$0.6 million before taxes.
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For additional information, see Note 13 to our Financial Statements included under “ Item 18. Financial Statements. ”
D.
Exchange Controls
The following is a description of the main regulations of the BCRA regarding capital inflows and outflows in Argentina. For further details on the full scope of the current foreign exchange control restrictions and regulations, investors should seek advice from their legal advisors and review the applicable regulations referenced in the 20-F, which are available on the Argentine Ministry of Economy website: https://www.argentina.gob.ar/economia, or on the BCRA website: www.bcra.gob.ar. None of the information contained on either website is incorporated by reference into this 20-F.
On September 1, 2019, the Government enacted Decree No. 609/2019 (as amended and/or modified, the “Decree 609”), which permanently imposed controls through Decree No. 91/2019. Through Decree 609/2019, the Executive Branch reinstated foreign exchange controls and authorized the BCRA to (a) regulate access to the Foreign Exchange Market (the “Foreign Exchange Market”) for purchasing foreign currency and making payments abroad; and (b) establish regulations to prevent practices and transactions aimed at circumventing the measures adopted under Decree 609 through the use of securities and other instruments.
The consolidated text of the Foreign Exchange and External Sector Regulations is currently outlined in Communication “A” 8191 (as subsequently modified and supplemented by BCRA communications, the “Foreign Exchange Regime”). Below is a brief summary of the current foreign exchange control regulations.
The BCRA requested the CNV to implement aligned measures to prevent evasive practices and transactions. In this regard, the CNV, in line with Article 3 of Decree 609, established various measures to prevent such practices and transactions.
Specific Provisions for Inflows through the Foreign Exchange Market
Export of Goods
As a general rule, exporters of goods must bring in and settle foreign currency earnings in pesos through the Foreign Exchange Market within different timeframes depending on certain factors (type of exported products, relationship between exporter and importer, etc.). Regardless of the maximum timeframes established in each case, payments for exports must be brought in and settled in the Foreign Exchange Market within 20 (twenty) business days from the date of receipt. However, the ability to use this timeframe will be subject to compliance with the deadlines set forth in the Foreign Exchange Regime for each type of good.
Until April 2025, pursuant to Decree No. 28/2023 published on December 13, 2023 (“Decree 28/2023”), 80% of the foreign currency proceeds from exports had to be settled through the Foreign Exchange Market while the remaining 20% could be settled through securities transactions involving the purchase of securities settled in foreign currency and their subsequent sale settled in local currency within Argentina. On April 14, 2025, Decree No. 269/2025 repealed Decree 28/2023 and expressly established that the foreign currency proceeds from such exports shall be governed by the general provisions set forth in Decree 609 and its amending and supplementary regulations. Exporters of the goods included in the MERCOSUR Common Nomenclature (NCM) shall pay export duties, taxes, and other applicable charges pursuant to the terms, deadlines, and conditions set forth under the current regulations, applying the corresponding export duty rate based on the foreign exchange settlement regime described above.
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If the client is a Unique Project Vehicle (“VPU”) adhered to the Incentive Regime for Large Investments (“RIGI”) and has declared before the Ministry of Economy its intention to benefit from the provisions of Article 198 of Law 27,742 “Foundations and Starting Points for the Freedom of Argentinians” (the “Foundations Law”) concerning the collection of export proceeds for goods and services, the income and settlement percentages set forth in Sections 14.1.1. and 14.1.2. of the Foreign Exchange Regime will apply, as appropriate.
Sale of Non-Produced Non-Financial Assets
The consideration received by residents for the sale of non-produced non-financial assets to non-residents must be brought into the country in foreign currency and settled in the Foreign Exchange Market within 20 (twenty) business days from the date of receipt of funds in Argentina or abroad, or their crediting to foreign accounts.
Regarding funds received or credited to foreign accounts, compliance with the entry and settlement requirement may be deemed met up to the equivalent amount of usual expenses debited by foreign financial entities for the transfer of funds to Argentina.
Export of Services
As a general rule, payments for services provided by residents to non-residents must be brought in and settled in the Foreign Exchange Market within a maximum period of 20 (twenty) business days from the date of receipt abroad or in Argentina, or their crediting to foreign accounts. There are exceptions to the obligation to settle in the Foreign Exchange Market the foreign currency received as consideration for certain exports of specific services expressly contemplated in Section 2.2.2 of the Foreign Exchange Regime, subject to prior compliance with various requirements set forth therein for both individuals and legal entities.
If the client is a VPU adhered to the RIGI and has declared before the Ministry of Economy, the authority in charge of RIGI, its intention to benefit from the provisions of Article 198 of the Foundations Law (which establishes that such VPUs are not required to bring in or settle in the Foreign Exchange Market the foreign currency obtained for concepts other than the export of products, including services), the exception set forth in Section 14.1.3 of the Foreign Exchange Regime will apply. This section establishes that collections for services rendered to a non-resident by a VPU holding a project under the RIGI will be exempt from the requirement to bring in and/or settle the total foreign currency proceeds, provided that the service was rendered or accrued from the date of the VPU’s startup as reported by the Ministry of Economy to the BCRA.
Provided the requirements set forth in Section 7.9 of the Foreign Exchange Regime are met, collections for service exports may be used for the repatriation of direct investment contributions or the repayment of principal and interest on: (i) External Financial Indebtedness, (ii) publicly registered debt securities in Argentina that do not qualify as External Financial Indebtedness, denominated in foreign currency and whose services are payable in foreign currency, provided that the total funds obtained have been settled in the Foreign Exchange Market.
Additionally, provided that the specific requirements established in Sections 3.11.3 and 7.9.5 of the Foreign Exchange Regime are met, it is allowed for collections from service exports to be accumulated in accounts opened in local or foreign financial institutions, for the amounts required in debt contracts, to guarantee the payment of capital and interest services of External Financial Indebtedness and/or debt securities registered in Argentina that do not qualify as External Financial Indebtedness, denominated in foreign currency and whose services are payable in foreign currency, provided that the total funds obtained have been settled in the Foreign Exchange Market.
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Specific Provisions for Outflows through the Foreign Exchange Market
Import of Goods and Services
Regarding access to the Foreign Exchange Market for the payment of imports of goods with Customs Entry registration from December 13, 2023, the following must be verified:
1.   Payment deadlines, regarding to import transactions registered prior to April 14, 2025, shall be as follows: (a) From the date of customs entry registration, payment may be made for the following goods, among others: petroleum gases and other gaseous hydrocarbons (subchapter 2711 of the NCM). (b) For all other goods, payment may be made starting 30 (thirty) calendar days from the date of customs entry registration.
Pursuant to the provisions of Communication “A” 8226, for the importation of all types of goods registered as from April 14, 2025, the term established under this section shall be reduced to zero (0) calendar days as from the date of customs clearance (“registro de ingreso aduanero”)
2.   Deferred payments for new imports of goods with customs entry registration from December 13, 2023, before the deadlines established in point (1) above, may be processed when, in addition to complying with other applicable regulatory requirements, the payment falls within the situations provided for in Section 10.10.2 of the Foreign Exchange Regime, which covers various types of financing.
3.   Payments for imports with pending customs registration require prior approval from the BCRA, except when, in addition to complying with all other applicable requirements, the payment falls within the situations outlined in Section 10.10.2 of the Foreign Exchange Regime.
4.    Payments for imports of goods with customs entry registration before December 12, 2023, require prior approval from the BCRA, except for the exceptions detailed in Section 10.11 of the Foreign Exchange Regime.
For the payment of services provided by non-residents, the following provisions apply:
1.   Entities may grant access to the Foreign Exchange Market without prior approval from the BCRA to make payments for services provided by non-residents, as well as for new imports of services rendered or accrued from December 13, 2023, when it is verified that, in addition to meeting all other applicable regulatory requirements, the payment falls within specific situations.
2.    Regarding services provided by non-residents rendered and/or accrued until December 12, 2023, prior approval from the BCRA will be required, except for specific exceptions.
Formation of External Assets and Derivative Transactions
In general, prior approval from the BCRA is required for the formation of external assets (e.g., purchase of foreign currency, among others) and for derivative transactions carried out by legal entities that are not authorized exchange operators, local governments, mutual funds, and other legal structures established in Argentina.
Debt Securities Subscribed Abroad and External Financial Indebtedness
Debt securities with public registration abroad, other financial indebtedness abroad, and debt securities with public registration in Argentina that are denominated in foreign currency and fully subscribed abroad (collectively, “External Financial Indebtedness”) must be brought into and settled in the Foreign Exchange Market as a prerequisite for subsequent access to it for the purpose of servicing capital and interest payments. Consequently, although the settlement of proceeds from such transactions is not mandatory, failing to settle them will prevent future access to the Foreign Exchange Market for reimbursement purposes.
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This requirement to bring in and settle funds will be considered fulfilled in the following cases, among others:
(i)
Indebtedness that does not generate disbursements due to being refinancing arrangements, provided that the refinancing does not anticipate the maturity of the original debt.

(ii)
For the amount of issuance expenses debited abroad.

(iii)
For the difference between the effective value and the nominal value in issuances of publicly registered debt securities placed below par.

(iv)
For the portion corresponding to an interest capitalization as stipulated in the debt agreement.

(v)
For the portion subscribed with foreign currency within Argentina in issuances of publicly registered debt securities abroad carried out from February 5, 2021, provided all conditions detailed in the Foreign Exchange Regime are met.

(vi)
External Financial Indebtedness falling under Sections 7.11.1.3. and 7.11.1.5. of the Foreign Exchange Regime, provided that customs entry registration of goods is demonstrated for an amount equivalent to the financing received. The value of freight stated in the transport documentation related to the customs entry registration may also be considered, provided that the funds from these transactions were used for direct payment to the freight service provider for imports not included in the agreed purchase condition.

(vii)
For the portion of new debt securities delivered by a resident to its creditors as a participation premium, repurchase, early redemption, or similar, in the context of an exchange, repurchase, and/or early redemption of External Financial Indebtedness, provided that: (a) The nominal value of the new securities delivered as a participation premium, repurchase, or early redemption, or similar, does not exceed 5% (five percent) of the capital value of the debt effectively exchanged or repurchased; and (b) The new debt securities include at least a one-year grace period for capital repayment and involve a minimum two-year extension of the average life of the remaining exchanged or repurchased capital.
Subject to compliance with the established regulations, access to the Foreign Exchange Market will be granted for the early payment of capital and interest up to three business days before the due date for the capital or interest service payment.
In the case of a capital payment on debt securities issued from November 8, 2024, which is executed via transfer abroad, access to the Foreign Exchange Market must take place at least 365 (three hundred sixty-five) consecutive days from its issuance date. This term shall be reduced to 180 (one hundred eighty) days for new issuances carried out as from April 21, 2025.
Access to the Foreign Exchange Market for such payments more than three (3) days before the due date is generally subject to prior approval from the BCRA. The following cases of prepayment may be exempt from this prior BCRA approval:
(i) Prepayment of capital and interest with the settlement of funds brought in from abroad through the issuance of a new debt security qualifying as External Financial Indebtedness.
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(ii) Prepayment of capital and interest with the simultaneous settlement of other External Financial Indebtedness.

(iii) Prepayment of interest in the context of an exchange of debt securities qualifying as External Financial Indebtedness.
(iv) Simultaneous prepayment of capital and interest with the settlement of a new External Financial Indebtedness granted by a local financial entity based on a credit line from abroad.
(v) Prepayment of capital and interest by a Unique Project Vehicle (“VPU”) adhered to the RIGI.
Additionally, prior approval from the BCRA is required for local residents to access the Foreign Exchange Market for capital and interest payments under External Financial Indebtedness with related parties. Certain specific exceptions apply, (i) primarily requiring that the debt have an average life of no less than two (2) years and that the funds have been brought in and settled in the Foreign Exchange Market since October 2, 2020 or (ii) that it involves the repayment of principal under Foreign Financial Indebtedness with an average of no less than 180 (one hundred eighty) days, provided that the funds have been entered into and settled through the foreign exchange market as from April 21, 2025.
Debts Between Residents
Access to the Foreign Exchange Market for the settlement of debts and other financial obligations in foreign currency, contracted from September 1, 2019, is generally prohibited, except in specific cases (such as payments related to credit cards).
Profits and Dividends
To remit foreign currency abroad as profits and/or dividends to non-resident shareholders, prior approval from the Central Bank is mandatory, unless the following requirements are met:
(i)Profits and dividends must correspond to closed and audited financial statements.
(ii) The total amount paid to non-resident shareholders must not exceed the amount in Argentine pesos corresponding to them based on the distribution determined by the shareholders’ meeting.
(iii) If applicable, compliance with the Survey of External Assets and Liabilities for the relevant transactions must be met.
(iv) The company falls under one of the following situations and meets all stipulated conditions in each case:
(a) It registers direct investment contributions settled from January 17, 2020, where a partial dividend payment scheme is foreseen with a minimum payment period concerning the cutoff payment date.
(b) Profits are generated from projects under the GasAr Plan.
(c) It holds a “Certification of Increase in Goods Exports” for the years 2021 to 2023 issued under Section 3.18 of the Foreign Exchange Regime, equivalent to the value of profits and dividends paid.
(d) The client performs a swap and/or arbitration operation with funds deposited in a local account and originating from foreign currency receipts of capital or interest from BOPREAL.
(e) The client is a VPU adhered to the RIGI, and the profits correspond to direct foreign investment contributions that fall under Section 14.2.2 of the Foreign Exchange Regime. In this case, the client must provide documentation proving the definitive capitalization of the contribution.
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According to Communication ‘A’ 8226, financial institutions are authorized to grant their clients access to the Foreign Exchange Market for the remittance of funds abroad in the form of profits and dividends to non-resident shareholders, pursuant to the applicable Foreign Exchange Regime, provided that such distributions correspond to distributable profits derived from realized earnings recorded in duly audited and regular annual financial statements for fiscal years beginning on or after January 1, 2025.
Non-Residents
Non-residents must obtain prior approval from the Central Bank to access the Foreign Exchange Market and acquire foreign currency, with only a few permitted exceptions, such as the repatriation of direct investments in companies that are not controlling shareholders of financial institutions, and the repatriation of capital services, income, and proceeds from the sale of portfolio investments in instruments listed on local markets authorized by the CNV, in both cases subject to certain conditions and provided that such repatriation takes place at least 180 (one hundred eighty) days after the settlement of the funds.
General Requirements
As a general rule, and in addition to the specific rules for each operation, certain general requirements must be met by a company or local individual to access the Foreign Exchange Market for purchasing foreign currency or transferring it abroad (i.e., payments for imports and other purchases of goods abroad; payment for services provided by non-residents; distribution of profits and dividends; payment for debt securities subscribed abroad and external financial indebtedness; payment of interest on debts for the importation of goods and services, among others) without requiring prior approval from the BCRA. Accordingly, the company or local individual must submit an affidavit stating:
(a) That they did not hold Argentine deposit certificates representing foreign shares (“CEDEARs”) and/or available external liquid assets at the beginning of the day they request access to the Foreign Exchange Market for an amount exceeding the equivalent of US$100,000, and that all their foreign currency holdings in the country are deposited in financial institution accounts at the time of accessing the Foreign Exchange Market.
If the client had available external liquid assets and/or CEDEARs exceeding the amount established in the previous paragraph, the entity may also accept an affidavit from the client stating that the amount does not exceed the limit, considering that, partially or entirely, the external liquid assets were applied to specific exceptions provided for in the regulations, including:
(i) Funds deposited in foreign bank accounts in their name originating from External Financial Indebtedness, whose amount does not exceed the equivalent of capital and interest payments due in the next 365 (three hundred sixty-five) consecutive days.
(ii) Funds deposited in foreign bank accounts in their name originating in the last 180 (one hundred eighty) consecutive days from disbursements abroad received from November 29, 2024, onward, from External Financial Indebtedness.
(iii) Funds deposited in foreign bank accounts in their name originating from the sale of securities settled in foreign currency as outlined in Section 3.16.3.6.iii) of the Foreign Exchange Regime.
(iv) Funds deposited in foreign bank accounts in their name originating from debt securities issuances carried out in the last 120 (one hundred twenty) consecutive days, eligible for classification under Sections 7.11.1.5. and 7.11.1.6 of the Foreign Exchange Regime.
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Entities may also accept an affidavit from the client stating that their holdings exceeding the established limit correspond to funds deposited in foreign bank accounts originating from the subscription abroad of a new debt security in the last 60 consecutive days, which will be used to execute a refinancing, repurchase, and/or early redemption of debt securities or financial debts abroad, qualifying as External Financial Indebtedness.
(b) The client commits to settling in the Foreign Exchange Market, within five business days of availability, any funds received abroad originating from the collection of loans granted to third parties, the collection of a time deposit, or the sale of any type of asset, when the asset was acquired, the deposit was made, or the loan was granted after May 28, 2020.
(c) The client certifies that on the date of access to the Foreign Exchange Market and in the 90 (ninety) consecutive days prior, directly or indirectly or on behalf of third parties:(i) They have not made sales in the country of securities settled in foreign currency; (ii) They have not conducted swaps of securities issued by residents for external assets; (iii) They have not transferred securities to custodial entities abroad; (iv) They have not acquired securities issued by non-residents settled in pesos;(v) They have not acquired CEDEARs representing foreign shares; (vi) They have not acquired debt securities issued by private entities in foreign jurisdictions; (vii) They have not transferred local currency or other local assets (except for foreign currency funds deposited in local financial institutions) to any natural or legal person, resident or non-resident, related or unrelated, receiving as consideration, before or after, directly or indirectly, by themselves or through a related, controlled, or controlling entity, external assets, crypto assets, or securities deposited abroad.
Pursuant to Communication ‘A’ 8226 issued by the BCRA on April 11, 2025, foreign exchange outflows conducted through the Foreign Exchange Market by resident individuals shall not be subject to the requirement set forth in this section (c), and in the case of legal entities, transactions carried out up to such date shall not be considered for the purposes of the sworn statement required under this section.
(d) The client commits not to carry out any of the transactions described in subsection (c) above from the moment they request access to the Foreign Exchange Market and for the subsequent 90 (ninety) consecutive days, directly or indirectly or on behalf of third parties.
Pursuant to Communication ‘A’ 8226, foreign exchange outflows conducted through the Foreign Exchange Market by resident individuals are not subject to the requirement set forth in this section (d).
Section 3.16.3.6. of the Foreign Exchange Regime outlines various transactions that should not be considered in affidavits submitted to comply with subsections (c) and (d).
(e) Section 3.16.3 of the Foreign Exchange Regime states that if the client requesting access to the Foreign Exchange Market is a legal entity, in order for the transaction not to be subject to the prior approval requirement of the BCRA, the client must submit an affidavit to the corresponding financial institution stating:
(i) A detailed list of the individuals or legal entities that exercise direct control over the client and other legal entities within the same economic group. To determine the existence of a direct control relationship, the types of relationships described in Section 1.2.2.1 of the BCRA regulations on “Large Credit Risk Exposures” must be considered. Companies sharing a control relationship as defined in Sections 1.2.1.1 and 1.2.2.1 of the “Large Credit Risk Exposures” regulations must be considered members of the same “economic group.”
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(ii) That on the date of requesting access to the Foreign Exchange Market and in the preceding 90 (ninety) calendar days, the client has not transferred local currency funds or other liquid local assets—except for foreign currency funds deposited in local financial institutions—to any individual or legal entity exercising direct control over the client, or to other companies within the same economic group, except for those directly related to routine transactions between residents for the acquisition of goods and/or services. Pursuant to Communication ‘A’ 8226, transactions carried out up to April 11, 2025, shall not be considered for the purposes of the sworn statement referred to herein.
(iii) The requirements in (i) and (ii) above will be considered met if the client requesting access has submitted:
(1) An affidavit stating that within the period specified in Section (e)(ii), except for those directly related to routine transactions in the course of its business activities, it has not transferred local currency funds or other liquid local assets—except for foreign currency funds deposited in local financial institutions—to any individual or legal entity.
(2) An affidavit signed by each individual or legal entity listed in Section (e)(i) to whom the client has transferred funds under the terms of Section (e)(ii), confirming compliance with the requirements set out in Sections (c), (d), and (e)(ii).
(3) An affidavit signed by each individual or legal entity listed in Section (e)(i), confirming that: (x) they comply with the requirements in Sections (c) and (d), or (y) within the period specified in Section (e)(ii), except for those directly related to routine transactions between residents for the acquisition of goods and/or services, they have not received local currency funds or other liquid local assets—except for foreign currency funds deposited in local financial institutions—that originated from the client or from any entity listed in Section (e)(i) to whom the client transferred funds under the terms of Section (e)(ii).
Transfers of securities to foreign depositary institutions made or to be made for the purpose of participating in a repurchase operation of debt securities issued by an Argentine resident shall not be considered in the affidavits submitted for compliance with Sections (c) and (d) above.
For the preparation of affidavits required under Sections (c) and (d) above, sales settled in foreign currency in the country or abroad of BOPREAL securities, or transfers of these bonds to foreign depositaries, shall not be considered when they are carried out up to the amount acquired in the primary subscription. This also does not apply in cases of sales of securities settled in foreign currency abroad or transfers of securities to foreign depositaries, both executed from April 1, 2024, when the market value of these transactions does not exceed the difference between the value obtained from the sale of BOPREAL securities settled in foreign currency abroad and their nominal value, if the former is lower.
As a general rule, prior approval from the BCRA is required if the client is a natural or legal person included in the list of invoices or equivalent documents classified as fraudulent by the Tax Collection and Customs Control Agency (“ARCA”). The list of individuals or legal entities included in this register by ARCA is available at: https://servicioscf.afip.gob.ar/Facturacion/facturasApocrifas/default.aspx. This requirement does not apply to accessing the market for the cancellation of foreign currency financing granted by local financial institutions, including payments for foreign currency purchases made using credit or debit cards.
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Under the Foreign Exchange Regime, when preparing affidavits required under Sections 3.16.3.1 and 3.16.3.2, among others, sales of securities settled in foreign currency in the country or abroad should not be considered if all funds obtained from such settlements have been or will be used within 10 consecutive days for, among others, the following transactions:
(i) Payments of principal or interest on new External Financial Indebtedness disbursed from October 2, 2023, including at least a one-year grace period for principal repayment.
(ii) Payments of principal and interest on debt securities issued from October 2, 2023, with public registration in the country that do not qualify as External Financial Indebtedness, denominated and subscribed in foreign currency, with payments due in the country, and including a minimum grace period of two years for principal repayment.
(iii) Payments of principal or interest on External Financial Indebtedness that does not generate disbursements due to refinancing of principal and/or interest from transactions covered in (i) and (ii), provided the refinancing does not anticipate the maturity of the original debt.
(iv) Payments of principal or interest on debt securities issued with public registration in the country that do not qualify as External Financial Indebtedness, denominated in foreign currency, and payable in the country, that do not generate disbursements due to being refinanced capital and/or interest transactions as covered in (ii) above, provided the refinancing does not anticipate the maturity of the original debt.
In all cases mentioned above, the client must submit an affidavit stating that the funds received from the transactions in (i) to (iii) were used for making domestic payments related to investments in Argentina.
Other Specific Provisions
Securities Transactions
The Foreign Exchange Regime establishes that securities transactions executed abroad cannot be settled in pesos in Argentina. Only transactions involving securities may be settled in pesos in Argentina if they are executed domestically.
Except in the case of securities purchase and sale transactions carried out by resident individuals with settlement in foreign currency, the settlement of such transactions is not permitted through payment in foreign currency banknotes or by deposit into custody accounts or third-party accounts, unless they are liquidated in foreign currency and involving third-party accounts within the framework of section 4.3.2.3 of the Foreign Exchange Regime.
The CNV regulations establish a minimum holding period of one business day from its accreditation in the Central Securities Depository Agent with respect to clients who do not qualify as resident individuals for, among others:
(a) Sales of marketable securities settled in foreign currency, in any jurisdiction and under any applicable law, as long as the purchase of such securities was made with Argentine pesos.
(b) Transfers of marketable securities acquired with local currency settlement to foreign depositary institutions, regardless of the applicable law governing their issuance.
(c) Applying marketable securities from foreign depositary institutions to transactions settled in foreign currency, in any jurisdiction, and under any applicable law.
The above restrictions do not apply to transfers of securities to foreign depositary institutions if the client intends to participate in an exchange of debt securities issued by the National Government, local governments, or private sector resident issuers. The client must provide the corresponding certification for the exchanged debt securities.
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Nonetheless, the acquisition of securities settled in pesos in Argentina with funds from abroad is not prohibited, provided the transaction is not documented abroad. Additionally, the transfer of securities from abroad to commissary accounts in Argentina for subsequent sale settled in pesos in the country is not restricted, provided the transaction is executed within Argentina.
According to the CNV regulations, Trading Agents, Settlement and Clearing Agents, and Negotiable Securities Brokerage Agents must comply with specific requirements to process orders and record transactions in authorized markets, particularly concerning the transactions outlined in Sections 3.16.3.1 and 3.16.3.2 of the Foreign Exchange Regime. These requirements vary depending on the type of client and the nature of the transaction. For non-resident clients (non-intermediaries), they must verify that the transactions are for the client’s own portfolio and funded with their own resources, ensuring that the daily trading volume does not exceed AR$200,000,000 (Two Hundred Million Pesos).
Exceptions to the aforementioned trading restrictions apply to BOPREAL acquired in primary auctions and to the sale of negotiable securities settled in foreign currency and under local jurisdiction, previously acquired in pesos by individual or corporate resident clients with funds from UVA mortgage loans granted by financial institutions authorized to operate under Law No. 21.526, up to the amount of the relevant loans and provided that the proceeds from these sales are applied to the purchase of real estate in Argentina under the framework of such loans
RIGI
BCRA Communication “A” 8099 has regulated the foreign exchange benefits for VPUs that adhere to the RIGI. The BCRA has established: (i) exceptions to the obligation to bring in and settle foreign currency from exports carried out by a VPU adhered to the RIGI; (ii) exceptions to the obligation to bring in and settle foreign currency from service exports; (iii) access to the Foreign Exchange Market to make payments for certain expenses; (iv) access to the Foreign Exchange Market to make dividend payments to non-resident shareholders; (v) application abroad of income derived from goods exports; and (vi) foreign exchange stability applicable to the VPU as of the date of adherence to the RIGI.
BCRA Reporting Regimes. Survey of External Assets and Liabilities
In all cases, and subject to compliance with the remaining applicable requirements, access to the Foreign Exchange Market will be granted for the payment of financial or commercial debts and for the payment of profits or dividends, provided that such debts are reported through the Central Bank’s reporting system established by Communication “A” 6401 (and its complementary Communication “A” 6795), known as the Survey of External Assets and Liabilities.
Advance Notice of Foreign Exchange Transactions
Entities authorized to operate in foreign currency must provide the BCRA, at the end of each business day and with two business days’ notice, with information on outgoing transactions through the Foreign Exchange Market for daily amounts equal to or greater than the equivalent of US$100,000. Clients must notify financial institutions in advance so that they can comply with the requirements of this reporting system and, consequently, as long as they simultaneously meet other requirements established in foreign exchange regulations, they may process the foreign exchange transactions.
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Foreign Exchange Criminal Regime
The Foreign Exchange Regime establishes that transactions that do not comply with the foreign exchange regulations set forth in this regulatory framework will be subject to the Foreign Exchange Criminal Regime (Law No. 19,359 and its amendments).
For more information on the current foreign exchange control restrictions and regulations, investors should seek advice from their legal advisors and review the applicable regulations referenced in this document, as well as its amendments and complementary regulations, which are available on the following websites: www.infoleg.gob.ar or www.bcra.gob.ar, as applicable. None of the information contained on or linked to these websites is incorporated by reference into this 20-F.
Money Laundering
The concept of money laundering is commonly used to refer to operations that aim to enter funds from criminal activities into the institutional system and thus convert profits from illegal activities into assets of apparently lawful origin.
On April 13, 2000, the Argentine Congress passed the Anti-Money Laundering Law which classifies money laundering as a crime. Additionally, such law, which amended several sections of the Argentine Criminal Code, has established sanctions for those incurring in such illicit activity and has created the UIF, a unit of the Ministry of Economy created to prevent money laundering and financing of terrorist activities.
The Argentine Criminal Code defines money laundering as the exchange, transfer, management, sale or any other use of money or other assets obtained through a crime, by a person who did not take part in such original crime, with the potential result that such original assets (or new assets resulting from such original assets) appear as if obtained through legitimate means, provided that the aggregate value of the assets involved exceed in the aggregate (through one or more related transactions) Ps.300,000. As previously mentioned, the Anti-Money Laundering Law created the UIF, which is in charge of the analysis, supervision and conveyance of information in order to prevent (A) the laundering of assets obtained from: (i) Crimes related to illegal traffic and commercialization of narcotics (Law No. 23,737); (ii) Crimes related to arms trafficking (Law No. 22,415); (iii) Crimes related to the activities of an illegal association as defined in Article 210 bis of the Argentine Criminal Code; (iv) Illegal acts committed by illegal associations (Article 210 of the Argentine Criminal Code) organized to commit crimes with political or racial motivation; (v) Crimes of fraud against the Public Administration (Article 174, Section 5 of the Argentine Criminal Code); (vi) Crime against the Public Administration under Chapters VI, VII, IX and IX bis of Title XI of Book Two of the Argentine Criminal Code; (vii) Crimes of underage prostitution and child pornography under Articles 125, 125 bis, 127 bis and 128 of the Argentine Criminal Code; (viii) Crimes related to financing terrorism (Articles 41quinquies and 306 of the Argentine Criminal Code); (ix) Crimes of extortion (Article 168 of the Argentine Criminal Code); (x) Tax crimes, related to social security and fiscal resources (pursuant to law 24,769) and (xi) Crimes related to human trafficking; and (B) Crimes related to financing terrorism.
The Anti-Money Laundering Law assigns information and control duties to certain private sector entities, such as banks, agents, stock exchanges and insurance companies, according to the regulations of the UIF, and for financial entities, the Central Bank.
Financial entities must inform the UIF about any suspicious or unusual transaction, or transactions lacking economic or legal justification, or that are unnecessarily complex. In addition, guidelines and internal procedures were created to detect unusual or suspicious transactions, which must be implemented by financial institutions and other entities.
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Pursuant to the same criteria that underlies the aforementioned law, in 2012, the office of the Attorney General issued Resolution No. 914/12, which created the PROCELAC. As PROCELAC has no competence to apply sanctions, its main role is to collaborate with the Federal Prosecutors in the investigation of crimes and in receiving complaints in order to initiate preliminary investigations.
The UIF issued Resolution No. 229/2011, which was replaced by Resolution UIF No. 21/2018 and, subsequently amended by Resolutions No. 156/2018, No. 18/2019, No. 117/2019, No. 112/2021, No. 6/2022 and 50/2022 (“AML in the Capital Market Sector”). The AML in the Capital Market Sector establishes certain procedures that must be followed by the authorized agents of the CNV involved in the placement, intermediation and public offering of securities (the “Obliged Subjects in the Capital Market Sector”) in order to prevent, detect and report (within the deadlines established) the acts, transactions or omissions that may arise from committing money laundering and terrorist financing crimes in the capital market sector. Additionally, the AML in the Capital Market Sector introduced general guidelines to identify different types of customers (including a distinction between frequent, casual and inactive customers), the requested information, the documentation to be kept and the procedure to detect and report all suspicious transactions within the established deadlines.
The main obligations pursuant to the AML in the Capital Market Sector are the following: (i) to prepare manuals providing the mechanisms and procedures for the prevention of money laundering and financing of terrorism; (ii) to appoint a compliance officer; (iii) to audit regularly; (iv) to provide training programs to the employees; (v) to enforce measures that would allow the Obliged Subjects in the Capital Market Sector to compile the transactions performed by the customers using a computerized method, as well as technological tools which would enable the analysis and supervision of different transactions to identify behaviors and detect potential suspicious operations; (vi) the implementation of technological tools that would result in effective control and prevention procedures against money laundering and financing of terrorism; and (vii) to record the analysis and risk management of the suspicious transactions that were detected and those that, for having been considered suspicious, have been reported.
The Central Bank and the CNV should also comply with provisions of the Anti-Money Laundering Law. In this respect, the CNV regulations provide that entities involved in the public offering of securities (other than issuers), including, among others, underwriters of any primary issuance of securities, must comply with the standards set forth by the UIF. In particular, they must comply with the obligation regarding customer identification and required information, record-keeping, precautions to be taken to report suspicious transactions, policies and procedures to prevent money laundering and terrorist financing. Whilst, the acquirers of notes will provide the information and documentation required regarding the origin and legality of the funds used for the subscription.
On the other hand, pursuant to Resolution No. 21/2018, as amended subsequently, the Obliged Subjects in the Capital Market Sector shall identify and evaluate the risks that they are exposed to and, as a result, to adopt administrative measures for mitigating them, in order to more effectively prevent money laundering. In accordance with this standard, the Obliged Subjects in the Capital Market Sector must have policies and procedures to know their client (“KYC”), which must be applied according to the risk rating resulting from the implemented risk model. Within this framework, individuals are enabled to implement reputable technological platforms, which allow long-distance procedures without the need to present documentation in person, without prejudice to the fulfillment of due diligence duties.
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In accordance with Annex I of the UIF Resolution No. 154/2018 (which established the supervision and inspection mechanism of the UIF), both the Central Bank and the CNV are considered “Specific Controllers”. Therefore, they must collaborate with the UIF in complying with the procedures for the prevention of money laundering and finance of terrorism implemented by the obligated subjects subject to its control. For these purposes, they are empowered to supervise, monitor and inspect such entities. The refusal to cooperate or obstruction of inspections by the obliged subjects may result in penalties by the UIF, CNV or the Central Bank. Both UIF Resolution No. 30/2017, as amended, as well as the Central Bank regulations require banks to take certain minimum precautions to prevent money laundering.
With respect to issuers (such as the company), CNV regulations provide that any person (either individuals or legal entities) performing significant capital contributions or loans must be identified, whether a shareholder or not at the time of the contributions, and must meet the requirements for general participants in the public offering of securities, set forth in the CNV regulations and the UIF regulations, especially with respect to the identification of such persons and to the origin and legality of the funds and loans provided.
On October 14, 2016, the UIF issued Resolution No. 135/2016, which strengthened the regulations regarding the international exchange of information between similar authorities which may enter into agreements or memoranda of understanding as well as to the foreign public bodies that are members of the Egmont Group of Financial Information Unit or the Asset Recovery Network of the Financial Action Task Force of Latin American.
On January 11, 2017, the UIF published Resolution No. 4/2017, which established that special due diligence measures must be applied for identifying foreign and domestic investors (who shall comply with the requirements therein set forth to qualify as such) in the Republic of Argentina upon requesting the opening of special investment accounts.
In addition, the Argentine tax amnesty law (Law 27,260 and its regulatory decree No. 895/16, as amended) (the “Tax Amnesty Law”) provided that the information that has been voluntarily disclosed may be used for investigating and sanctioning crimes of money laundering and finance of terrorism. To this end, the UIF is authorized to inform other public intelligence agencies about investigations, based on a previous resolution of the president of the UIF and provide those agencies with information that evidences crimes of money laundering and/or financing of terrorism. In the same way, the AFIP is obliged to report to the UIF any suspicious transactions detected in the context of the Tax Amnesty Law and to provide all the information that the UIF requires, not being able to invoke fiscal confidentiality.
In November 2018, the UIF passed Resolution No. 134/2018, which updates the list of persons considered to be “politically exposed persons” (“PEP”) in Argentina, taking into account any positions occupied by them in the present or in the past, and their relationship by closeness or affinity with third parties who occupy or have occupied such positions. Also, during 2019, the UIF issued Resolution No. 15/2019, which modified the PEP list and Resolution 128/19 established that foreign PEPs will be considered high risk and therefore subject to reinforced due diligence measures, with some exceptions.
On December 26, 2018, the UIF published UIF Resolution No. 154/2018, which amended the supervision procedures then in effect providing for new procedures consistent with and conforming to the international standards promoted by the Financial Action Task Force (“FATF”), which shall be applied in accordance with a risk-based approach.
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In July 2019, by Decree No. 489/2019, the Executive Branch created the Public Registry of Persons and Entities Linked to Acts of Terrorism and its Financing (Registro Público de Personas y Entidades Vinculadas a Actos de Terrorismo y su Financiamiento) (the “RePET”), to centralize and manage all information related to the administrative freezing of assets linked to acts of terrorism and its financing. RePET is empowered to provide public access and guarantee the exchange of information with the agencies with competence in the field and with third countries, and the reporting parties must provide all information related to transactions carried out or attempted by individuals or legal entities included in RePET.
In turn, on November 14, 2019, by means of General Resolution No. 816, the CNV adapted the regulations related to the prevention of money laundering and financing of terrorism, in order to include the new obliged subjects contemplated in the Law on Prevention of Money Laundering and in the Regulations on Money Laundering in the Capital Market Scope. Among the new obligated subjects were included crowdfunding platforms, global investment advisory agents and human or legal persons acting in the placement of mutual funds or other collective investment products.
On November 17, 2019, through Resolution No. 117/2019, the UIF updated the minimum thresholds above which reporting entities must carry out the enhanced control and due diligence requirements established by the applicable anti-money laundering and anti-terrorist financing regulations. This measure aims to “contribute to an efficient prevention of money laundering and terrorist financing” from a risk-based approach, in accordance with international standards promoted by the FATF.
On October 21, 2021, the UIF issued Resolution 112/2021, whereby it establishes the measures and procedures that the regulated entities listed in Article 20 of the Money Laundering Prevention Law must observe to identify the beneficial owner of the customer in question. In this sense, such Resolution 112/2021 established that the beneficial owner shall be considered the human person who owns at least 10% of the capital or voting rights of a legal person, a trust, an investment fund, an affectation patrimony and/or any other legal structure; and/or the human person who by other means exercises the final control of the same.
On January 13, 2022, the UIF issued Resolution 6/2022. Pursuant to such resolution, the profile to be prepared by each obliged subject shall be based on the understanding of the purpose and expected nature of the commercial relationship, the transactional information and the documentation related to the economic, equity, financial and tax situation provided by the client or obtained by the obliged subject itself.
On April 11, 2022, pursuant to Resolution 50/2022, the UIF updated the thresholds for obliged subjects to perform due diligence measures on their clients and systematic transaction reports.
On February 2, 2023, the reform of UIF Resolution No. 14/2023 applicable to financial and exchange entities was published in the Official Gazette. The reform specifies the main guidelines for AML and Countering the Financing of Terrorism (CFT) risk management and the minimum compliance that each financial entity must adopt and apply to manage the risk of being used by third parties for the commission of these crimes. This is done through a Risk-Based Approach (RBA), considering the results of National Risk Assessments for AML/CFT and CFT/FP approved in 2022. In this way, and in accordance with Recommendation 1 of the FATF, it aims to ensure that competent authorities, financial institutions, and Designated Non-Financial Businesses and Professions (DNFBPs) can ensure that measures to prevent or mitigate AML/CFT risks correspond to the identified risks, enabling more effective decision-making regarding the allocation of resources.
Additionally, based on international recommendations, the reform establishes the prohibition of maintaining anonymous or under fictitious names, specifies required measures concerning foreign Politically Exposed Persons (PEPs), emphasizes the need to apply proportionate Enhanced Due Diligence measures to identified risks, and incorporates the possibility for financial institutions to rely on third parties for the execution of certain due diligence measures.

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On May 2, 2023, UIF issued Resolution No. 72/2023, which consolidates the collaboration duty of regulatory bodies (BCRA, CNV, Superintendencia de Seguros de la Nación, and Instituto Nacional de Asociativismo y Economía Social) in supervision procedures. This regulation facilitates coordination among the bodies and adopts a risk-based approach for obligated entities. Additionally, the “Working Group Regulations” and the “Model of Final Technical Report” are approved as references for the preparation of reports by the regulatory bodies.
On May 9, 2023, Resolution No. 78/2023 was published in the Official Gazette, coming into effect on July 1, 2023. The purpose of this resolution is to establish minimum requirements for the identification, assessment, monitoring, management, and mitigation of AML/CFT risks. It is directed towards obligated entities included in Article 20, subsections 4, 5, and those of subsection 22 of the Anti-Money Laundering Prevention Law, particularly those entities acting as Financial Trustees. The resolution mandates the implementation of an Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) Prevention System, adopting a risk-based approach. This system is required to encompass comprehensive policies, procedures, and controls aimed at effectively identifying, assessing, managing, and mitigating the AML/CFT risks to which the obligated entity is exposed. Furthermore, it delineates, among other aspects, specific risk factors that obligated entities must consider. It imposes the obligation to conduct technical self-assessment risk reports and emphasizes the need for duly justified and approved risk tolerance declarations by the management and highest authority. Additionally, the resolution underscores the establishment of suitable policies, procedures, and controls to mitigate risks.
Moreover, the resolution mandates that obligated entities adopt policies, procedures, and minimum compliance controls to ensure adherence to regulations and detect irregularities. It establishes essential requirements that prevention manuals should incorporate, alongside other control measures such as appointing compliance officers and a Prevention Committee, implementing training plans, conducting Prevention System evaluations, and formulating a Code of Conduct, among other measures. Finally, the resolution compels the implementation of measures for customer identification, verification, and knowledge, as well as for monitoring, analysis, and reporting.
On June 16, 2023, Resolution No. 99/2023 was published, outlining the obligations that Obligated Entities of Cooperatives and Mutuals must fulfill to manage AML/CFT risks in accordance with prevailing international standards, best practices, guidelines, and recommendations from the FATF. The primary objective of the reform is to adopt a risk-based approach for more effective prevention, introducing key definitions such as risk self-assessment, the effectiveness of the preventive system, and advisory alerts. Additionally, systematic compliance reports are established, allowing differentiated reporting periods for certain Obligated Entities. The resolution will become effective on August 1, 2023, replacing UIF Resolution No. 11/2012.
Furthermore, on June 14, 2023, Resolution No. 126/2023 was published, rendering Resolution No. 28/2018 null and void as of September 1 of the same year. It amends the minimum requirements for the identification, assessment, monitoring, management, and mitigation of AML/CFT risks that obligated entities, as outlined in Article 20, subsections 8 and 16 of the Anti-Money Laundering Prevention Law, must adopt and apply in accordance with their policies, procedures, and controls to prevent the risk of being used by third parties for criminal AML/CFT purposes.
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Subsequently, on September 1, 2023, Resolution 169/2023, as adjusted by Resolution 177/2023, established new minimum requirements for the identification, assessment, monitoring, management, and mitigation of AML/CFT risks that capitalization, savings, savings and loan, economic, capital formation, or other similar or equivalent societies, requiring money or securities from the public under any form with the promise of awarding or delivering goods, providing services, or future benefits, as outlined in Article 9 of Law No. 22,315, must adopt and apply according to their policies, procedures, and controls to prevent the risk of being used by third parties for criminal AML/CFT purposes. On September 18, 2023, through UIF Resolution 177/2023, certain articles of Resolution UIF No. 169/23 were rectified, including the consecutive order of subsections in Article 12 and normative references included in Articles 26, 28, 29, 30, and 40.
On March 15, 2024, Law 27.739 was published in the Official Gazette, and introduced certain modifications to the regulatory framework for AML/CFT. Among these, the creation of a Centralized Public Registry of Ultimate Beneficial Owners, managed by the AFIP, stands out. All companies, legal entities, or other contractual entities or legal structures established in Argentina or of foreign origin that carry out activities in the country and/or own goods and/or assets located and/or placed in the country must be registered.
E.
Taxation
General
The following general summary of the main tax consequences in Argentina and the United States relating to the, ownership and disposition of securities issued by us is based on the tax laws of Argentina, the United States and regulations thereunder (as applicable) as in effect on the date hereof, each subject to any changes that may come into effect after such date under the Argentine and United States laws and regulations (as applicable) as may become effective subsequently to such date, possibly with retroactive effect.
Even though this summary is considered to constitute an appropriate interpretation of the effective Argentine tax laws and United States federal income tax laws as of the date hereof, no assurance may be given that the courts or tax authorities in charge of application of such laws will agree to this interpretation. Furthermore, it should be noted that there have been many changes in Argentine tax laws and United States tax laws in the past and in particular in recent years, and that such laws may be subject to restatements, revocation of exemptions, reestablishment of taxes and other changes.
Prospective investors should consult their own tax advisors as to the Argentine tax consequences and United States federal income tax consequences of the purchase, ownership and disposition of our securities, including, the effect of any foreign, state or local tax laws.
Argentine Taxes
Income Tax
Law No. 27,430, enacted on December 27, 2017 and published in the Official Gazette on December 29, 2017, had introduced several amendments to Income Tax Law No. 20,628, among others, a corporate tax rate reduction in two phases. For fiscal years beginning on or after January 1, 2018 until December 31, 2019, there had been a reduction of the tax rate from 35% to 30%. Beginning on or after January 1, 2020 the tax rate would have been further reduced to 25%. Additionally, a withholding of 7% or 13% had been established for the fiscal years mentioned above, on the dividends distributed by local entities in favor of their shareholders provided they are resident individuals or undivided estates, or are foreign beneficiaries.
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On June 16, 2021, Law 27,630 was enacted and published in the Official Gazette. This law increases corporate income tax rates for tax years beginning January 1, 2021, and onwards. The new law increases tax rates by replacing the fixed tax rate with a progressive tax scale. It also extends the 7% withholding tax rate currently in force to dividends from profits accrued in tax years beginning January 1, 2021, and thereafter.
Taxation on Dividends
In view of the last amendments introduced to the Income Tax Law by virtue of the Tax Reform, as of fiscal years beginning on January 1, 2018, the taxation applicable to dividends distributed from Argentine companies would be as follows, as amended by the Solidarity Law:
Dividends originated from profits obtained during fiscal years 2019, 2020 and 2021: dividends on Argentine shares paid to Argentine individuals and/or non-residents (“Foreign Beneficiaries”) are subject to a 7% income tax withholding on the amount of such dividends (“Dividend Tax”).
Dividends originated from profits obtained during fiscal year 2021 onward: the tax rate is raised to 7%.
For Argentine individuals not registered before the AFIP as payers of income tax and foreign beneficiaries, the Dividend Tax withholding will be considered as a unique and final payment. In addition, under the Tax Reform, rules are created that regulate and limit the possibility to offset gains derived from the distribution of dividends with losses generated in other operations.
If dividends are distributed to Argentine Entities as defined below, no Dividend Tax should apply.
However, Law No. 27,451, published in the Official Gazette on December 23, 2019, suspended, until fiscal years starting on January 1st, 2021, the application of the withholding tax at a 13% rate on payment of dividends and profit distribution, and reestablished the 7% rate for this withholding tax.
Capital Gains Tax
Resident individuals
Capital gains obtained by resident individuals or undivided estates situated in Argentina from the sale or disposition of common shares and other securities are subject to income tax at a 15% rate on net income, unless such securities were traded in stock exchange under the supervision of the CNV, in which case an exemption applies.
Losses arising from the sale, exchange or other disposition of common shares or ADSs can be applied only to offset such capital gains arising from the sale, exchange or other disposition of these securities, for a five‑year carryover period.
Foreign beneficiaries
Capital gains of Argentine source (as it is the case of both our ADSs and shares) obtained by non-Argentine individuals or non-Argentine entities from the sale, exchange or other disposition of shares are subject to income tax at a 15% rate on the net capital gain or at a 13.5% rate on the gross price at the seller’s election. Notwithstanding, Law No. 27,430 established an exemption for foreign beneficiaries participating in the sale of publicly traded shares traded in stock exchanges under the supervision of the CNV. Said Law also established an exemption for capital gains derived from the sale, exchange or other disposition of share certificates issued abroad that represent shares issued by Argentine companies (i.e. ADRs). The exemptions will apply only if the foreign beneficiaries do not reside in, and the funds do not arise from, “non-cooperating” jurisdictions for tax transparency purposes.
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In case the foreign beneficiaries reside in or the funds arise from “non-cooperating jurisdictions”, the tax rate applicable for the sale, exchange or other disposition of shares and/or ADSs amounts to 35%. The non-cooperating jurisdictions list is prepared and published by the executive branch. The ARCA (ex AFIP) has prepared an indicative and non-exhaustive list of jurisdictions considered to be low-or-no-tax jurisdictions, which can be consulted on their web site at: https://www.afip.gob.ar/fiscalidad-internacional/jurisdicciones-no-cooperantes/jurisdicciones-baja-nula-tributacion/que-son.asp. The U.S. is currently not a non-cooperating jurisdiction.

The Tax Reform, effective as of January 1, 2018, specifies that in case of share certificates issued abroad that represent shares issued by Argentine companies (i.e., ADSs), the “source” is defined by the location of the original issuer of the shares. However, the tax will not be due if the publicly traded exemption, described above, applies in respect of the underlying shares
Argentine entities
Capital gains obtained in tax years beginning from January 1, 2024 by Argentine entities (in general entities organized or incorporated under Argentine law, certain traders and intermediaries, local branches of non-Argentine entities, sole proprietorships and individuals carrying on certain commercial activities in Argentina) derived from the sale, exchange or other disposition of shares or ADSs are subject to the following tiered structure of corporate income tax rates for different brackets of earnings:
Annual taxable income (ARS)
Tax due on lower limit
(ARS)
Marginal rate on the excess of the
lower limit
0 to 34.73 million
ARS 0
25%
Over 34.7 million to 347.03 million
ARS 8.67 million
30%
Over 347.03 million
ARS 102.37 million
35%
Losses arising from the sale, exchange or other disposition of shares or ADSs can be applied only to offset such capital gains arising from the sale, exchange or other disposition of these securities, for a five-year carryover period.
WE RECOMMEND PROSPECTIVE INVESTORS TO CONSULT THEIR OWN TAX ADVISOR REGARDING THE PARTICULAR TAX CONSEQUENCES CONCERNING THE SALE OR OTHER DISPOSITIONS OF SHARES AND ADSs.
Value Added Tax (“VAT”)
The sale, exchange or other disposition of our ADSs or common shares and the distribution of dividends are exempted from VAT.
Personal Assets Tax
Argentine entities, like us, are subject to the personal assets tax corresponding to Argentine individuals and Foreign Beneficiaries (be they legal entities or individuals) for the holding of company shares at December 31 of each year.
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Pursuant to Law No. 27,541, as of December 31, 2019, the rate is 0.50% and is levied on the proportional net worth value (“valor patrimonial proporcional”), of the shares as per the Argentine entity’s last financial statements prepared under Argentine GAAP.
Pursuant to the Personal Assets Tax Law, the Argentine company is entitled to seek reimbursement of such paid tax from the applicable Argentine domiciled individuals and/or foreign domiciled shareholders.
Tax on Credits and Debits on Bank Accounts
Law No. 25,413, as amended and regulated by Law No. 25,453, established a tax, with certain exceptions, levied on debits and credits of any nature on bank accounts held at Argentine financial institutions, except for those specifically exempted pursuant to legal provisions and regulations thereof. The general tax rate is 0.6% for each debit and credit (although in certain cases an increased rate of 1.2% and a reduced rate of 0.075% may apply).
Certain transfers of money or cash movements through other mechanisms may also trigger application of this tax. In general, the financial institutions involved act as tax collection and tax calculation agents.
Decree No. 409/2018 established that as of January 1st, 2018, 33% of the tax paid on credits and debits levied at the 0.6% general tax rate and 1.2% tax rate, and 20% of the tax paid on transactions levied at the lesser tax rate, will be considered as a payment on account of income tax, taxes on presumed minimum income or the special contribution on cooperatives capital by the bank account holders. The exceeding amount will not be subject to compensation with other taxes or transfer in favor of third parties; however, it can be carried forward to other fiscal periods of the above-mentioned taxes.
This tax has certain exemptions; as an example, debits and credits in banking accounts opened by foreign legal entities in accordance with BCRA Communication “A” 3250 and used exclusively for the purpose of making financial investments in Argentina are exempted from this tax is accordance with section 10, paragraph s) of Decree No. 380/2001. Likewise, Law No.27,264 established that the Tax on Credits and Debits on Bank Accounts that had actually been deposited may be computed in a 100% as payment on account of the income tax by companies that are considered “micro” and “small” and in 50% by manufacturing industries considered “medium -trench 1-” under the terms of article 1 of Law No. 25,300 and its complementary regulations. In case securities’ holders receive payments in local bank checking accounts, such tax may apply.
Turnover Tax
The turnover tax is a local tax; therefore, the rules of the relevant provincial jurisdiction should be considered, which may levy this tax on the customary purchase and sale, exchange or other disposition of common shares and ADSs, and/or the collection of dividends at an average rate between 5% and 10%, unless an exemption is applicable. In the particular case of the City of Buenos Aires, any transaction involving common shares and/or the collection of dividends and revaluations is exempt from this tax. To date, there is no withholding regime provided for foreign holders of common shares and ADSs.
Stamp Tax
The stamp tax is a local tax that is generally levied on the consummation of onerous transactions executed within a certain provincial jurisdiction or outside a certain provincial jurisdiction but with effects in such jurisdiction.
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Notwithstanding the fact that the stamp tax is a local tax, for Buenos Aires City, the acts, contracts and transactions, including money delivery or receipt transactions, related to the issuance, subscription, placement and transfer of notes, issued pursuant to the Negotiable Obligations Law regime are exempted from application of this tax.  This exemption shall include the creation of any real or personal guarantees in favor of investors or third-parties guaranteeing the issuance, either prior to, simultaneous with or subsequently to such issuance.
This exemption also covers security rights related to issuances. However, this exemption is forfeited if, within a 90-calendar days term, the relevant authorization is not requested for the public offering of such securities before the CNV.
The acts and/or instruments related to the trading of shares and other securities duly authorized for public offering by the CNV are exempted from application of stamp tax in the City of Buenos Aires.  This exemption is also ineffective if the circumstances mentioned in the last sentence of the previous paragraph occur.
In turn, in the Province of Buenos Aires, any acts, contracts, transactions, including money delivery or receipt transactions, related to the issuance, subscription, placement and transfer of notes issued pursuant to the Negotiable Obligations Law regime and Law No. 23,962 are exempted from application of this tax.  This exemption shall include the creation of any real or personal guarantees in favor of investors or third-parties guaranteeing the issuance, either prior to, simultaneous with or subsequently to such issuance.
Considering the autonomous authority vested in each provincial jurisdiction in connection with tax matters, any potential effects derived from these transactions must be analyzed, in addition to the tax treatment established by the other provincial jurisdictions.  Potential investors must consider the stamp tax impact depending on the local jurisdictions involved.
Transfer Taxes
The sale, exchange or other disposition of our common shares or ADSs is not subject to transfer taxes
Court Taxes
In the event that it becomes necessary to institute legal actions in relation to our securities before a federal court in Argentina or the courts sitting in the City of Buenos Aires, a court tax will be imposed on the amount of any claim (currently at a rate of 3.0%). Certain court and other taxes could be imposed on the amount of any claim brought before the courts of the relevant province.
Treaties to Avoid Double Taxation
Argentina has signed tax treaties for the avoidance of double taxation with Australia, Belgium, Bolivia, Brazil, Canada, Chile, Denmark, Finland, France (which amendment protocol is pending ratification), Germany, Italy, Mexico, Norway, Qatar, Russia, Spain, Sweden, Switzerland, Turkey, the Netherlands, the People’s Republic of China, United Arab Emirates, United Kingdom, and Uruguay (through an information exchange treaty that contains clauses for avoidance of double taxation). In addition, Argentina has signed tax treaties with Austria, Japan and Luxembourg, but they are still pending approval by the Argentine Congress. In turn, tax treaties are being negotiated with Colombia and Israel, and amendments to the current tax treaty with Germany. There are currently agreements between Argentina and the United States on the exchange of Country-by-Country Reports, and automatic exchange of financial account information to facilitate implementation of the U.S. Foreign Account Tax Compliance Act (FATCA), but there is no tax treaty or convention in force between both countries. It is not clear when, if ever, a treaty will be ratified or entered into effect. As a result, the Argentine tax consequences described in this section will apply, without modification, to a holder of our common shares or ADSs that is a U.S. resident. Foreign shareholders located in certain jurisdictions with a tax treaty in force with Argentina may be exempted from the payment of the personal asset tax.
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Inflow of Funds from Non‑Cooperative Jurisdictions
Non-cooperative jurisdictions are those countries or jurisdictions that do not have in force with the Government an agreement for the exchange of information on tax matters or a treaty to avoid international double taxation with a broad clause for the exchange of information.  Likewise, those countries that, having an agreement of this type in force, do not effectively comply with the exchange of information will be considered non-cooperative. The aforementioned treaties and agreements must comply with international standards of transparency and exchange of information on fiscal matters to which the Argentine Republic has committed itself. After the tax reform the white list system in force was replaced by a black list system. In this system, the Executive Branch would have to prepare and update a list of the countries considered as non-cooperative based on the aforementioned criteria. As of today, the United States is considered a cooperating country.
According to the legal assumption established by Law No. 11,683 Section 18.1 as amended, incoming funds from non-cooperative jurisdictions are considered unjustified net worth increases for the local receiver.
Unjustified net worth increases are subject to the following taxes:

•
Income tax would be assessed on 110% of the amount of funds transferred;

•
VAT would be assessed on 110% of the amount of funds transferred. Even though the concept “income arising from” is not clear, it could be construed as any fund transfer;

•
from an account in a non-cooperative jurisdiction, or from a bank account opened outside of a non-cooperative jurisdiction but owned by an entity located in a non-cooperative jurisdiction; or

•
to a bank account located in Argentina or to a bank account opened outside of Argentina but owned by an Argentina tax resident.
Notwithstanding the above, the Law provides that the Federal Administration of Public Revenues can accept those funds that derived from activities genuinely performed by an Argentine taxpayer, or by a third party in said jurisdiction.
With respect to the application of the above-mentioned legal presumption on incoming funds from jurisdictions considered as low or null tax jurisdictions (defined under section 15.3 of the Argentine Income Tax Law) further clarifications are expected to be issued by the implementing decree of the Tax Reform.
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THE ABOVE SUMMARY DOES NOT REPRESENT A FULL ANALYSIS OF ALL THE TAX CONSEQUENCES AND DOES NOT ADDRESS ALL OF THE ARGENTINE TAX CONSEQUENCES THAT MAY BE APPLICABLE DERIVED FROM THE OWNERSHIP OF NEGOTIABLE OBLIGATIONS. POTENTIAL HOLDERS AND BUYERS SHOULD CONSULT THEIR OWN TAX ADVISERS REGARDING THEIR PARTICULAR TAX CONSEQUENCES. IT DOES NOT PURPORT TO BE A COMPREHENSIVE DESCRIPTION OF ALL THE ARGENTINE TAX CONSIDERATIONS THAT MAY BE RELEVANT TO A DECISION TO PURCHASE, OWN OR DISPOSE OUR SHARES. IN PARTICULAR, THIS SUMMARY DOES NOT DESCRIBE ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCALITY, MUNICIPALITY OR TAXING JURISDICTION OTHER THAN CERTAIN FEDERAL LAWS OF ARGENTINA.
United States Taxes
General . This following discussion is a summary of U.S. federal income tax consequences generally applicable to a U.S. holder (as defined below) who holds our Class B Shares or ADSs. It applies to a U.S. holder only if such holder holds our Class B Shares or ADSs as “capital assets” within the meaning of the Internal Revenue Code of 1986, as amended (the “ Code ”) and is not a member of a special class of holders subject to special rules, including: a dealer in securities; a trader in securities that elects to use a mark-to-market method of accounting for his or her securities holdings; a tax-exempt organization; a life insurance company; a person liable for alternative minimum tax; a person that actually or constructively owns 10% or more of the voting power or value of our aggregate shares outstanding; a person that holds Class B Shares or ADSs as part of a hedging or straddle or conversion transaction; a person that purchases or sells Class B Shares or ADSs as part of a wash sale for tax purposes; a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) and partners or members therein; or a person whose functional currency is not the U.S. dollar.
This discussion is based on the Code, its legislative history, existing and proposed regulations, published rulings and court decisions, and the laws of Argentina all as currently in effect. These laws are subject to change, possibly on a retroactive basis. In addition, this section is based in part upon the assumption that each obligation in the Deposit Agreement and any related agreement will be performed in accordance with its terms.
If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Class B Shares or ADSs, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the tax treatment of the partnership. A partner in a partnership holding Class B Shares or ADSs should consult its tax advisor with regard to the U.S. federal income tax treatment of an investment in Class B Shares or ADSs.
A holder is a U.S. holder if such holder is a beneficial owner of Class B Shares or ADSs and such holder is: a citizen or resident of the United States; a domestic corporation or other entity taxable as such; an estate whose income is subject to U.S. federal income tax regardless of its source; or a trust, if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust.
In general, and taking into account the earlier assumptions, for U.S. federal income tax purposes, a holder of ADRs evidencing ADSs will be treated as the owner of the underlying Class B Shares represented by those ADSs, and exchanges of Class B Shares for ADRs, and ADRs for Class B Shares, will not be subject to U.S. federal income tax.
This discussion does not generally address any aspects of U.S. taxation other than federal income taxation. Holders of Class B Shares or ADSs are urged to consult their tax advisors regarding the U.S. federal, state and local tax consequences of owning and disposing of the Class B Shares or ADSs in their particular circumstances.
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Taxation of Dividends . Under the United States federal income tax laws, and subject to the passive foreign investment company (“ PFIC ”) rules discussed below, a U.S. holder must include in his or her gross income the gross amount of any dividend that we pay out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). If the holder is a non-corporate U.S. holder, dividends that constitute qualified dividend income will be taxable at the preferential rates applicable to long-term capital gains; provided that the Class B Shares or ADSs are held for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and certain other holding period requirements are met. Provided that we are not a PFIC, for the year in which a dividend is paid or the preceding taxable year, dividends that are paid with respect to the ADSs that are readily tradable on an established securities market in the United States are qualified dividend income. Under this rule, we expect that the dividends we pay with respect to the ADSs will be qualified dividend income. Because the Class B Shares are not readily tradable on an established securities market in the United States, it is unclear whether dividends paid with respect to the Class B Shares will also be qualified dividend income.
The holder must include any Argentine tax withheld from the dividend payment in this gross amount even though the holder does not in fact receive it. The holder must include the gross amount of dividends in income when the holder, in the case of Class B Shares, or the depositary, in the case of ADSs, receives the dividend, actually or constructively. The dividend will not be eligible for the dividends-received deduction generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations. Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a non-taxable return of capital to the extent of a holder’s basis in the Class B Shares or ADSs and thereafter as capital gain.
The amount of the dividend distribution that a holder must include in his or her income will be the U.S. dollar value of the peso payments made, determined at the spot peso/U.S. dollar rate on the date such dividend distribution is includible in such holder’s income, regardless of whether the payment is in fact converted into U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date a holder includes the dividend payment in income to the date such payment is converted into U.S. dollars will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income. Such gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes.
For foreign tax credit purposes, the dividend will generally be income from sources outside the United States. Dividends will, depending on the holder’s circumstances, generally be either “passive” or “general” income, for purposes of computing the foreign tax credit allowable to the holder. Subject to certain limitations, the Argentine tax withheld and paid over to Argentina will generally be creditable or deductible against your U.S. federal income tax liability. Special rules apply in determining the foreign tax credit limitation with respect to dividends that are subject to the preferential tax rates.
However, it is likely that no U.S. foreign tax credit will be allowed to U.S. holders of Class B Shares or ADSs in respect of any personal property or similar tax imposed by Argentina (or any taxing authority thereof or therein) (for example, if such tax is not treated as an income tax for U.S. federal income tax purposes). The calculation of foreign tax credits and, in the case of a U.S. holder that elects to deduct foreign taxes, the availability of deductions, involve the application of complex rules that depend on a U.S. holder’s particular circumstances. All U.S. holders should consult their own tax advisors regarding the creditability or deductibility of such taxes.
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Taxation of Capital Gains . Subject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of Class B Shares or ADSs will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the U.S. dollar value of the amount realized and his or her tax basis (determined in U.S. dollars) in such Class B Shares or ADSs. Capital gain of a non-corporate U.S. holder is generally taxed at preferential rates where the holder has a holding period greater than one year. The gain or loss generally will be income or loss from sources within the U.S. for foreign tax credit limitation purposes.
As discussed in the previous paragraph, it is possible that a U.S. holder who sells or purchases the Class B Shares or ADSs may be subject to Argentine tax upon such sale or acquisition. If the seller is legally liable for the tax and the seller pays this tax, then the seller should be able to claim a foreign tax credit for U.S. federal income tax purposes in an amount equal to the amount of the tax, subject to generally applicable limitations. However, because the gain from a sale or other disposition of Class B Shares or ADSs will be U.S. source income, such seller would need a sufficient amount of other foreign source income that is untaxed, or that is taxed at a tax rate that is sufficiently lower than the U.S. tax rate applicable to such seller, in order to be able to claim this foreign tax credit. Additionally, if an Argentine tax is withheld on the sale or other disposition of Class B Shares or ADSs, then the seller must include the amount of such tax withheld in the amount realized upon the sale or disposition, even though the seller does not in fact receive it. If the purchaser is legally liable for the tax, then the purchaser will likely not be entitled to receive any tax credit in the United States in respect of the payment of any such taxes.
PFIC Rules . In general, a non-U.S. corporation will be classified as a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes, if either (i) 75% or more of its gross income consists of certain types of “passive” income or (ii) 50% or more of the fair market value of its assets (determined on the basis of a quarterly average) produce or are held for the production of passive income. For this purpose, cash is categorized as a passive asset. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more (by value) of the shares. We do not believe that we were a PFIC for the taxable year ended December 31, 2017. We do not anticipate being a PFIC for our current taxable year, although we can make no assurances in this regard. Our status as a PFIC in any year depends on our assets and activities in that year. We have no reason to believe that our assets or activities will change in a manner that would cause us to be classified as a PFIC for the current taxable year or for any future year, however this is a factual determination that is made annually and thus may be subject to change.
If we were to be treated as a PFIC, unless a U.S. holder makes a valid election to be taxed annually on a mark-to-market basis with respect to the Class B Shares or ADSs, gain realized on the sale or other disposition of the shares or ADSs would in general not be treated as capital gain. Instead, the U.S. holder would be treated as if he had realized such gain and certain “excess distributions” ratably over the holding period for the shares or ADSs and would be taxed at the highest tax rate in effect for each such year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each such year. With certain exceptions, Class B Shares or ADSs will be treated as stock in a PFIC if we were a PFIC at any time during the holding period of a U.S. holder. In addition, dividends received from us will not be eligible for the special tax rates applicable to qualified dividend income if we are treated as a PFIC (or are treated as a PFIC with respect to a U.S. holder) either in the taxable year of the distribution or the preceding taxable year, but instead will be taxable at rates applicable to ordinary income. Additionally, U.S. holders owning our ADSs or Class B Shares may be subject to certain reporting obligations with respect to our ADSs or Class B Shares for years in which we were a PFIC.
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If we were to be treated as a PFIC, we do not intend to provide the information necessary for U.S. holders of our ADSs or Class B Shares to make “qualified electing fund,” or QEF, elections, which, if available, would result in tax treatment different from the general tax treatment for PFICs described above.
Each U.S. holder should consult its own tax advisors concerning the U.S. federal income tax consequences of holding and disposing of our ADSs or Class B Shares if we were, are or become classified as a PFIC, including the possibility of making a mark-to-market election.
Information Reporting and Backup Withholding. Dividend payments with respect to ADSs or Class B Shares and proceeds from the sale, exchange or redemption of ADSs or Class B Shares may be subject to information reporting to the IRS and possible U.S. backup withholding. Backup withholding will not apply to you, however, if you furnish a correct taxpayer identification number and make any other required certification or that are otherwise exempt from backup withholding. U.S. holders that are required to establish their exempt status generally must provide such certification on IRS Form W-9. You should consult your tax advisor regarding the application of the U.S. information reporting and backup withholding rules.
Backup withholding is not an additional tax. Amounts withheld as backup withholding can be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required information in a timely manner.
Individual U.S. holders and certain entities may be required to submit to the IRS certain information with respect to his or her beneficial ownership of the ADSs or Class B Shares, if such ADSs or Class B Shares are not held on his or her behalf by a financial institution. This law also imposes penalties if an individual U.S. holder is required to submit such information to the IRS and fails to do so. All U.S. holders are urged to consult their tax advisors regarding the application of information reporting rules to them.
THE DISCUSSION OF U.S. FEDERAL INCOME TAX CONSEQUENCES ABOVE IS NOT TAX ADVICE AND IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSEQUENCES RELATING TO THE OWNERSHIP OR DISPOSITION OF ADSS OR CLASS B SHARES. ALL U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE, LOCAL AND FOREIGN TAX CONSEQUENCES TO THEM OF OWNERSHIP AND DISPOSITION OF ADSS OR CLASS B SHARES.
F.
Dividends and Paying Agents
Not applicable.
G.
Statement by Experts
Not applicable.
H.
Documents on Display
We are subject to the informational requirements of the CNV and BYMA and file reports and other information relating to our business, financial condition and other matters with the CNV and BYMA. You may read such reports, statements and other information, including our publicly filed Financial Statements, at the public reference facilities of the CNV and BYMA maintained in Buenos Aires. We are also required to file annual and special reports and other information with the SEC. You may read and copy any documents filed by us at the SEC’s public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our filings with the SEC will also be available to the public at the offices of the NYSE, 11 Wall Street, New York, New York 10005.
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We have appointed Citibank NA to act as depositary for our ADRs. For so long as our ADRs are deposited with the depositary, we will furnish the depositary with our annual reports and summaries of all notices of general meetings of shareholders and other reports and communications that are made generally available to our shareholders.
The depositary will, as provided in the Deposit Agreement, arrange for the mailing of summaries in English of such reports and communications to all record holders of our ADRs. Any record holder of ADRs may read such reports, notices, or summaries thereof, and communications at the depositary’s office. The depositary’s office is located at 388 Greenwich Street – 6th Floor New York, NY 10013.
Whenever a reference is made in this Annual Report to a contract or other document of ours, please be aware that such reference is not necessarily complete and that you should refer to the exhibits that are a part of the Annual Report for a copy of the contract or other document. You may review a copy of the Annual Report at the SEC’s public reference room in Washington, D.C.
I.
Subsidiary Information
Not applicable.
J.
Annual Report to Security Holders
Not applicable.
Item 11.
Quantitative and Qualitative Disclosures About Market Risk
Our activities are exposed to market risk, including the foreign exchange rate risk, the interest rate risk and the commodity price risk. Financial risks are those derived from financial instruments we are exposed to during or at the closing of each fiscal year. Our risk management policy is defined with the objective of reducing the impact of the loss of purchasing power. Based on this, the Management Committee is in charge of defining policies, procedures, limits and measures to mitigate the impact of such risks.
For further information on our market risks, please see Note 16 to our Audited Financial Statements.
Item 12.
Description of Securities Other than Equity Securities
American Depositary Shares
Fees and Charges Payable by a Holder of ADRs
Our ADSs are listed on the NYSE under the symbol “TGS.” Citibank NA is the Depositary of our ADSs pursuant to the Deposit Agreement. Each ADS represents the right to receive five shares.
Under the terms of the Deposit Agreement, as of the date of this Annual Report, an ADS holder may have to pay to the Depositary the fees specified in the table below.
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The charges of the Depositary payable by investors are as follows:
Service
Rate
By Whom Paid
Issuance of ADSs ( e.g. , an issuance upon a deposit of Shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any other reason), excluding issuances as a result of distributions described in the Deposit Agreement.
Up to U.S.$5.00 per 100 ADSs (or fraction thereof) issued.
Person receiving ADSs.
Cancellation of ADSs ( e.g. , a cancellation of ADSs for delivery of deposited Shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any other reason).
Up to U.S.$5.00 per 100 ADSs (or fraction thereof) canceled.
Person whose ADSs are being canceled.
Distribution of cash dividends or other cash distributions ( e.g. , upon a sale of rights and other entitlements).
Up to U.S.$5.00 per 100 ADSs (or fraction thereof) held.
Person to whom the distribution is made.
Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) an exercise of rights to purchase additional ADSs.
Up to U.S.$5.00 per 100 ADSs (or fraction thereof) held.
Person to whom the distribution is made.
Distribution of securities other than ADSs or rights to purchase additional ADSs ( e.g. , spin-off shares).
Up to U.S.$5.00 per 100 ADSs (or fraction thereof) held.
Person to whom the distribution is made.
ADS Services.
Up to U.S.$5.00 per 100 ADSs (or fraction thereof) held on the applicable record date(s) established by the Depositary.
Person holding ADSs on the applicable record date(s) established by the Depositary.
Disclosure for Fees Incurred in Past Annual Period . From January 1, 2024, to April 24, 2025, we received from the Depositary U.S.$ 314,082.73 for the expenses incurred by us related to the administration and maintenance of the ADR program and investor relation activities.
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PART II
Item 13.
Defaults, Dividend Arrearages and Delinquencies
No events required to be reported have occurred that materially affect tgs .
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds
None.
Item 15.
Controls and Procedures.
A.
Disclosure Controls and Procedures
We carried out an assessment under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2024. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon this assessment, our CEO and CFO concluded that our disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
B.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management, including our CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Financial Statements for external purposes in accordance with applicable IFRS Accounting Standards.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on this assessment, management concluded that, as of the end of fiscal year 2024, our internal control over the financial reporting was effective.
C.
Attestation Report of the Registered Public Accounting Firm
PwC and EY have jointly audited and reported on the effectiveness of our internal controls over financial reporting as of December 31, 2024, as stated in their reports appearing herein.
D.
Changes in Internal Control Over Financial Reporting
There have not been any changes in our internal control over financial reporting during the year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Item 16.
[Reserved]
Item 16A.
Audit Committee Financial Expert
We have one audit committee financial expert serving on our Audit Committee. Our Board of Directors has identified Mr. Carlos Olivieri as an audit committee financial expert. Mr. Olivieri is an independent director within the meaning of Rule 10A-3 under the Exchange Act.
Item 16B.
Code of Ethics
We have adopted a code of ethics (the “ Code of Ethics ”), applicable to all employees, including our principal executive, accounting and financial officers, and all directors. We will provide our Code of Ethics to any person without charge. Our Code of Ethics is available both on our website at https://www.tgs.com.ar/investors/Corporate-governance and is part of our integrity program. The information on our website is not incorporated into this Annual Report.
Any waivers to the Code of Ethics for directors or executive officers requiring disclosure under the NYSE Standards will be disclosed on our website. For more information, see, “ Item 16G. Corporate Governance. ”
Item 16C.
Principal Accountant Fees and Services
Audit and Non-Audit Fees
Fees billed for professional services provided to us by PwC and EY, during the years ended December 31, 2024 and 2023 in each of the following categories are:
Year ended December 31,
PwC
EY
2024
2023
2024
2023
(In thousands of pesos)
Audit fees
646,971
586,895
661,058
600,531
Tax fees
-
-
-
25,731
Total fees
646,971
586,895
661,058
626,262
Audit fees. Audit fees in the above table represent services rendered for the audit of our annual Financial Statements for Form 20-F, the review of our quarterly reports, and services provided by PwC and EY in connection with statutory and regulatory filings or engagements.
Tax fees in the above table represent services rendered by EY in connection with GNL incentives.
Audit Committee Pre-Approval Policies and Procedures
Consistent with SEC requirements regarding auditor independence, the Audit Committee pre-approves services prior to commencement of the specified service. Before the accountant is engaged to render audit or non-audit services, the Audit Committee must pre-approve the provision of services by our independent auditors prior to commencement of the specified service. The Audit Committee has delegated to its financial expert the authority to grant pre-approvals to auditors’ services. The decision of the financial expert to pre-approve a service is presented to the full Audit Committee at the next scheduled meetings.
All audit fees, audit-related fees, tax fees and other fees, if any, are submitted to our Audit Committee for prior approval. The Audit Committee evaluates the scope of the work to be performed by our accountants and the fees for such work prior to their engagement.
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Consequently, all services and fees rendered by our independent auditors during the year ended December 31, 2024 were approved by the Audit Committee prior to their engagement to perform such work.
The general annual shareholders´ meeting designates the external auditor.
Item 16D.
Exemptions from the Listing Standards for Audit Committees
None.
Item 16E.
Purchases of Registered Equity Securities of the Issuer by the Issuer and Affiliated Purchasers
Not applicable.
Item 16F.
Change in Registrant’s Certifying Accountant
None.
Item 16G.
Corporate Governance
Our corporate governance practices are governed by:

•
applicable Argentine law (particularly, the General Companies Act),

•
the standards of BYMA,

•
Capital Markets Law and Decree No. 1,023/2013,

•
the standards of the CNV,

•
our Bylaws,

•
our integrity program and other internal control policies and procedures, and

•
certain rules of the NYSE applicable to listed foreign private issuers.
We have securities that are registered with the SEC and listed on the NYSE and, consequently, we are subject to the rules and regulations of the NYSE.
Under the Corporate Governance Standards issued by the NYSE Standards, non-U.S. companies are permitted, in general, to follow their home country corporate governance practices in lieu of the provisions included in such standards. However, non-U.S. companies must comply with sections 303A.06, 303A.11 and 303A.12(b) and (c).
Our Corporate Governance Guidelines are available on our website www.tgs.com.ar.
According to Section 303A.11 of the NYSE Standards, foreign private issuers must disclose any significant ways in which their corporate governance practices differ from those followed by U.S. issuers. Accordingly, the following list reflects such differences:
Directors
According to NYSE Standards, listed companies must have a majority of independent directors. Argentine law does not require a majority of independent directors, but does require at least two independent directors on the Audit Committee. At our Board of Directors meeting held on April 17, 2024, three independent directors, meeting the independence criteria set forth under SEC regulations and NYSE Standards (but under CNV regulations, two qualify as independents) were appointed to the Audit Committee. We also have three alternate directors who qualify as independent.
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Meeting of Non-Management Directors
According to NYSE requirements, non-management directors must meet at regularly scheduled executive sessions without management. None of Argentine law, the CNV Rules or our Bylaws requires that any such meetings be held. Under Argentine law, a board of directors must meet at least once every three months.
Nominating/Corporate Governance Committee
U.S. listed companies must have a nominating/corporate governance committee composed entirely of independent directors. Argentine law and regulations do not require us to have a nominating or corporate governance committee.
Compensation Committee
U.S. listed companies must have a compensation committee composed entirely of independent directors. Argentine law and regulations do not require this committee. However, our Audit Committee is required to give an opinion about the reasonableness of directors’ fees and stock option plans (if applicable), as proposed by our Board of Directors, and the compensation paid to members of our Board of Directors is approved by our shareholders at their ordinary annual meeting.
Audit Committee
According to SEC regulations and NYSE Standards, listed companies must have an audit committee consisting of a minimum of three independent members. The members of the Audit Committee must be financially literate or must acquire such financial knowledge within a reasonable period and at least one of its members shall have expertise in accounting or financial management. Also, if a member of the Audit Committee is simultaneously a member of the Audit Committee of more than three public companies, and the listed company does not limit the number of Audit Committees on which its members may serve, then, in each case the Board of Directors shall determine whether the simultaneous service would prevent such member from effectively serving on the listed company’s Audit Committee, and shall disclose its decision in the annual proxy statement of the company or in the company’s annual report filed with the SEC.
Argentine law requires an Audit Committee to be comprised of at least three members with a majority of independent members. Pursuant to CNV standards, Audit Committee members are required to have knowledge in business, financial or accounting matters and issues. In addition, CNV standards require the training of Audit Committee members in the practice areas that would permit them to carry out their duties on the Audit Committee. Messrs. Carlos Olivieri, Carlos Alberto Di Brico and Luis Rodolfo Secco are independent directors under SEC regulations and NYSE Standards. Mr. Carlos Alberto Di Brico and Luis Rodolfo Secco are independent directors under CNV regulations.
Mr. Carlos Olivieri qualifies as a “financial expert” within the meaning of Item 16A of Form 20-F. See “ Item 16A. Audit Committee Financial Expert. ” The Audit Committee’s functions and duties are similar to those required by the NYSE. Furthermore, Argentine law does not limit the number of audit committees on which a member of its Audit Committee may serve.

Code of Conduct
According to Section 303A.10 of the NYSE Standards, listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers. In October 2005, our Board of Directors approved a “Code of Conduct” with the purpose of introducing SEC rules applicable to foreign registrants. Such code applies to all Board of Directors’ members, senior management, and employees, with no exceptions. Our Code of Conduct is available to the public on our website and as an Exhibit to this Annual Report. Our Code of Conduct is currently an annex of the integrity program.
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CEO’s Certification
Each listed company’s CEO must annually certify to the NYSE that he or she is not aware of any violation by the company of the NYSE’s corporate governance listing standards. There is no such requirement under Argentine law.
Item 16H.
Mine Safety Disclosure
Not applicable.
Item 16I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspection
Not applicable.
Item 16J.
Insider Trading Policies
We have a “Stock Market Best Practices Policy” which establishes the procedures to be followed for executing purchase or sale transactions, or any type of transaction on any security listed on the stock markets of the company and its subsidiaries and/or affiliates. It ensures greater transparency by guaranteeing that no employee obtains any type of advantage or economic benefit for themselves or others through the misuse of the Company’s insider information or that of its subsidiaries and affiliated companies. All our employees must accept and comply with this policy.
No employee who possesses Insider Information can, until such information is publicly announced:

-
Use such Insider Information in order to obtain any type of advantage through the purchase, sale, or any type of transaction in the company’s securities listed on stock markets (Covered Securities).

-
Disclose or communicate Insider Information to third parties, except in the normal course of one’s work, position, or profession.

-
Based on Insider Information, recommend or advise a third party to execute any type of transaction in the company’s securities listed on stock markets.
Also, within the 12 and 14 previous days of the publication of quarterly and annual Financial Statements, respectively and 1 day after such publication, the policy states a temporary restriction period where it is forbidden to all the employees to execute any type of transaction in the company’s securities listed on stock markets, regardless, of whether they have Insider Information or not.
Any breach of the policy by the Company employees carries out sanctions, such as: i) warnings, ii) restitution of financial gains obtained by the infringing Applicable Recipient, iii) other sanctions provided for in the Employment Contracts Act.

Item 16K.
Cybersecurity

Risk Management and Strategy



We take a risk-based approach to cybersecurity and have implemented policies across our operations designed to identify, prevent, detect, and respond to cybersecurity threats and incidents. We regularly assess risks from cybersecurity threats, monitor our information systems for potential vulnerabilities, and test those systems pursuant to our cybersecurity policies, standards, processes, and practices. To protect our information systems, we utilize a variety of tools and technologies that support the timely identification, escalation, investigation, resolution, and recovery from cybersecurity incidents.


205

Our efforts include, among other measures: mandatory employee training and phishing simulations, as well as penetration testing to evaluate and strengthen the effectiveness of our information security defenses and planning. Our cybersecurity program includes an incident response plan that facilitates cross-functional engagement across the Company and ensures timely reporting of cybersecurity incidents to appropriate levels of management, including senior executives and the Audit Committee or Executive Committee, depending on potential impact. We conduct annual cybersecurity awareness training and regularly test cybersecurity awareness across the organization.



We consider the Cybersecurity Framework developed by the U.S. Department of Commerce’s National Institute of Standards and Technology (“NIST”) as a guiding reference. This framework helps us identify compliance gaps and inform our ongoing evaluation of cybersecurity priorities and evolving threats, though we do not claim full conformance with every aspect of the framework. As part of our cybersecurity risk management efforts, we also assess the maturity of our program by benchmarking it against the latest cybersecurity trends and disclosure-related research, allowing us to adapt our practices to a dynamic threat environment.



Our strategic business partners are required to maintain security certifications and provide immediate notification in the event of a security breach that could affect our operations or data integrity.



To further strengthen our cybersecurity posture, we also engage independent third-party cybersecurity experts to test, evaluate and recommend improvements on the effectiveness of our cybersecurity program through penetration testing, breach assessments, and regular cybersecurity incident drill testing. These evaluations help us test, validate, and improve the effectiveness of our cybersecurity program on a recurring basis.


Governance



Our board of directors, through the Audit Committee, oversees our overall risk management processes, including those related to cybersecurity. The risk management program addresses the most significant short-, medium-, and long-term risks to the Company. Throughout the year, the Audit Committee discusses specific risk areas, including those related to cybersecurity.



Annually, and as needed, members of management and/or the risk committee provide presentations to the Audit Committee regarding cybersecurity matters . These updates cover material risks, the evolution of those risks, and strategic initiatives aimed at improving cybersecurity processes.



Our Internal Audit Department conducts audits of certain IT controls to assess whether there are any material weaknesses or significant deficiencies in the design or operation of those controls. Specialized external experts are engaged to assist in these assessments, helping to identify areas for improvement and enhance the effectiveness of our cybersecurity measures.



Our Chief Information Security Officer (“CISO”), in coordination with our planning and risk management functions, leads the assessment and oversight of cybersecurity risks. The current CISO brings over 20 years of experience in information security and provides regular reports to senior management and, when appropriate, to the Audit Committee or Executive Committee. These reports include updates on the Company’s cybersecurity strategy, key initiatives, key security metrics, insights from penetration testing and benchmarking, business response plans, and developments in the threat landscape; in the case of a specific cybersecurity incident, presentations include relevant details such as the status of the incident, stakeholders informed, and plans for remediation.



As of the date of this Annual Report, we have not identified any cybersecurity threats or incidents that have materially affected—or are reasonably likely to materially affect—our operations, business strategy, financial condition, or results. While we believe our cybersecurity program is suitable for managing evolving risks, no program can fully protect against all adverse events. For more information, see “Item 3. Key Information. D. Risk Factors: We rely heavily on digital technologies for our daily operations and we may be subject to cyberattacks or other risks related to new technologies.

PART III
Item 17.
Financial Statements
The registrant has responded to Item 18 in lieu of responding to this Item.
Exhibits
No.
Corporate Charter and Bylaws. (2)
Bylaws Amendments. (1)
Indenture dated July 24, 2024, entered into among tgs, Delaware Trust Company as trustee, co-registrar, paying agent and transfer agent, and Banco Santander Rio S.A., as registrar, Argentine paying agent, Argentine transfer agent and representative of the trustee in Argentina, relating to the issuance of tgs’s 8.500% senior notes due 2031.

206
Officers’ Certificate establishing the terms of tgs’ 8.500% senior notes due 2031.
Description of Securities Registered under Section 12 of the Exchange Act. (3)
CIESA Shareholders’ Agreement. (5)
CIESA’s Fourth Amendment to the Restructuring Agreement. (6)
CIESA’s Settlement Agreement. (5)
Technical Assistance Service Agreement between tgs and Pampa Energía, dated December 26, 2017. (2)
Financial lease agreement between Petrobras Argentina and tgs, dated July 25, 2016. (7)
List of tgs’s Subsidiaries.
Code of Ethics. (4)
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Audit Committee Charter. (8)
Insider Trading Policy
Clawback Policy (9)

(1)
Amendment incorporated by reference to our Annual Report on Form 20-F filed with the Securities and Exchange Commission for the year ended December 31, 2015 (Commission File No. 1-13396), (ii) amendment previously filed with the Securities and Exchange Commission pursuant to current report on Form 6-K, dated April 12, 2017 (Commission File No. 1-13.396), and (iii) amendment previously filed with the Securities and Exchange Commission pursuant to current report on Form 6-K, dated April 8, 2021 (Commission File No. 1-13.396).
(2)
Incorporated by reference to our Annual Report on Form 20-F filed with the Securities and Exchange Commission for the year ended December 31, 2018 (Commission File No. 1-13396).
(3)
Incorporated by reference to our Annual Report on Form 20-F filed with the Securities and Exchange Commission for the year ended December 31, 2019 (Commission File No. 1-13396).
(4)
Incorporated by reference to our Annual Report on Form 20-F filed with the Securities and Exchange Commission for the year ended December 31, 2005 (Commission File No. 1-13396).
(5)
Incorporated by reference to our Annual Report on Form 20-F filed with the Securities and Exchange Commission for the year ended December 31, 2012 (Commission File No. 1-13396).
(6)
Incorporated by reference to our Annual Report on Form 20-F filed with the Securities and Exchange Commission for the year ended December 31, 2010 (Commission File No. 1-13396).
(7)
Incorporated by reference to our Annual Report on Form 20-F filed with the Securities and Exchange Commission for the year ended December 31, 2017 (Commission File No. 1-13396).
(8)
Incorporated by reference to our Annual Report on Form 20-F filed with the Securities and Exchange Commission for the year ended December 31, 2003 (Commission File No. 1-13396).
(9)
Incorporated by reference to our Annual Report on Form 20-F filed with the Securities and Exchange Commission for the year ended December 31, 2023 (Commission File No. 1-13396).
We agree to furnish to the SEC upon request any instrument with respect to long-term debt that we have not filed as an exhibit pursuant to the exemption provided by instruction 2(b)(i) to Item 19 of Form 20-F.
207
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.
TRANSPORTADORA DE GAS DEL SUR S.A.
(Registrant)
By:
/s/ Oscar José Sardi
Name: Oscar José Sardi
Title:
Chief Executive Officer
/s/ Alejandro M. Basso
Name: Alejandro M. Basso
Title:
Chief Financial Officer and Services Vice President
Dated: April 24, 2025
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

To the Board of Directors and Shareholders of
Transportadora de Gas del Sur S.A.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Transportadora de Gas del Sur S.A. and its subsidiaries (together the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).  In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board .
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in the Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated April 24, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.  We are public accounting firms registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.  We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

F-1
Impairment of long-lived assets related to Property, Plant & Equipment of the Natural Gas Transportation cash-generating unit
Description of the matter

At December 31, 2024, the Company’s net book value of Property, Plant & Equipment (“PPE”) related to the Natural Gas Transportation cash-generating unit was Argentine Pesos 1,275,875 million. As discussed in Notes 4 (j) and 5 (a) to the consolidated financial statements, PPE is tested to assess whether an impairment or reversal of a previous impairment is required when significant changes that took place during the period, or will take place in the near future, indicate that the recoverable value of the PPE amounts may be affected. An asset’s recoverable amount is the higher of the fair value less costs to sell that asset, and its value-in-use. The value in use is calculated based on discounted future cash flows. Management’s projected cash flows for the Natural Gas Transportation cash-generating unit considered significant judgements and assumptions relating to: discount rate, estimates of future tariffs and the recognition of cost adjustments, and expected macroeconomic variables such as inflation and foreign exchange rates. During the year ended December 31, 2024, the Company recorded a gain of Argentine Pesos 39,625 million due to the reversal of previous impairment charged to PPE related to the Natural Gas Transportation cash-generating unit.

The principal considerations for our determination that performing procedures relating to the impairment of long-lived assets for PPE of the Natural Gas Transportation cash-generating unit is a critical audit matter are the significant judgment by management in estimating the value in use of this cash-generating unit, a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to discount rate, estimates of future tariffs and the recognition of cost adjustments and expected macroeconomic variables such as inflation and foreign exchange rates. In addition, the audit effort involved professionals with specialized skill and knowledge.

How we addressed the matter in our audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These audit procedures included obtaining an understanding, evaluating the design and testing the operating effectiveness of controls over management’s impairment review process, including controls over the review of the significant assumptions. These procedures also included, among others, evaluating the estimation methodology and testing the aforementioned significant assumptions and the completeness, accuracy, and relevance of underlying data used. The significant assumptions were compared with available economic trend data; the historical accuracy of management’s estimates was evaluated; sensitivity analyses of the significant assumptions were performed to evaluate the changes in the value in use that would result from changes in the assumptions; the arithmetical accuracy of the discounted cash flows model was evaluated; and the disclosures in the consolidated financial statements were assessed. Professionals with specialized skill and knowledge were involved to assist in the evaluation of the methodology and the significant assumptions used in the future cash flows estimated by management.
/s/ Price Waterhouse & Co. S.R.L.
/s/ PISTRELLI, HENRY MARTIN Y ASOCIADOS S.A.

/s/ Paula Verónica Aniasi
Member of Ernst & Young Global Limited

Price Waterhouse & Co. S.R.L (“PwC”) has served as the Company’s sole auditor since 2012. PwC and Pistrelli, Henry Martin y Asociados S.A. have served as the Company’s joint auditors since 2017.
City of Buenos Aires, Argentina
April 24, 2025

F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

To the Board of Directors and Shareholders of
Transportadora de Gas del Sur S.A.

Opinion on Internal Control over Financial Reporting

We have audited Transportadora de Gas del Sur S.A. and its subsidiaries (together the “Company”) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (“the COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated statements of financial position of the Company as of December 31, 2024 and 2023, and the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”), and our report dated April 24, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.  Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.  We are public accounting firms registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit i n accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

F-3
Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Price Waterhouse & Co. S.R.L.
/s/ PISTRELLI, HENRY MARTIN Y ASOCIADOS S.A.

/s/ Paula Verónica Aniasi
Member of Ernst & Young Global Limited

City of Buenos Aires, Argentina
April 24, 2025

F-4
TRANSPORTADORA DE GAS DEL SUR S.A.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(Stated in thousands of pesos as described in Note 3 and 4.d. except for share and per share information)

Notes
2024
2023
2022
Revenues
8.h.
1,219,766,287
986,052,768
1,115,696,199
Net cost of sales
8.i
( 575,240,137
)
( 620,072,661
)
( 651,289,136
)
Gross profit
644,526,150
365,980,107
464,407,063
Administrative expenses
8.j.
( 47,427,682
)
( 44,522,329
)
( 39,022,685
)
Selling expenses
8.j.
( 77,239,778
)
( 66,247,822
)
( 69,193,916
)
Other operating results, net
8.l.
815,391
( 1,652,362
)
( 518,759
)
Reversal of Impairment of Property, plant and equipment
5.a. 39,625,359 - -
Operating profit
560,299,440
253,557,594
355,671,703
Net financial results
Financial income
8.k.
116,195,431
641,108,048
201,925,553
Financial expenses
8.k.
( 207,479,604
)
( 1,096,881,998
)
( 399,450,268
)
Other financial results
8.k.
162,251,162
420,365,449
150,542,585
(Loss) / Gain on net monetary position
8.k.
( 49,407,255
)
( 123,081,449
)
25,553,954
Total net financial results
21,559,734
( 158,489,950
)
( 21,428,176
)
Share of profit / (loss) from associates
11
243,800
( 66,198
)
611,256
Net income before income tax
582,102,974
95,001,446
334,854,783
Income tax expense
14
( 211,939,479
)
( 43,787,727
)
( 115,697,238
)
Total comprehensive income for the year
370,163,495
51,213,719
219,157,545
Total comprehensive income attributable to:
Owners of the Company
370,163,706
51,212,469
219,157,465
Non-controlling interests
( 211
)
1,250
80
Total comprehensive income for the year
370,163,495
51,213,719
219,157,545
Total comprehensive income per share attributable to owners of the Company:
Weighted average number of outstanding ordinary shares
752,761,058
752,761,058
752,761,058
Basic and diluted earnings per share
491.74
68.03
291.14

The accompanying notes are an integral part of these consolidated financial statements.

F-5
TRANSPORTADORA DE GAS DEL SUR S.A.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2024 AND 2023
(Stated in thousands of pesos as described in Note 3 and 4.d.)

Notes
2024
2023
ASSETS
Non-current assets
Property, plant and equipment
12
2,384,877,108
2,162,194,240
Investments in associates
9
1,225,330
981,530
Financial assets measured at amortized cost
8.m.
-
233,423,075
Deferred income tax assets
14
4,914
-
Other receivables
8.a.
437,399
78,380
Total non-current assets
2,386,544,751
2,396,677,225
Current assets
Other receivables
8.a.
51,807,641
81,116,032
Inventories
3,664,704
16,700,896
Trade receivables
8.b.
156,016,473
110,627,111
Contract assets
26,063
43,383
Financial assets measured at amortized cost
8.m.
271,609,495
229,365,109
Financial assets at fair value through profit or loss
8.n.
464,955,449
473,717,157
Cash and cash equivalents
8.c.
59,973,684
14,370,655
Total current assets
1,008,053,509
925,940,343
Total assets
3,394,598,260
3,322,617,568
EQUITY
Common stock
738,540,164
738,540,164
Treasury shares
40,945,570
40,945,570
Cost of acquisition of treasury shares
( 74,082,856
)
( 74,082,856
)
Additional paid-up capital
( 21,490,781
)
( 21,490,781
)
Legal reserve
100,182,840
97,622,216
Reserve for capital expenditures, acquisition of treasury shares and/or dividends
1,079,251,752
1,030,599,907
Accumulated retained earnings
370,163,706
51,212,469
Equity attributable to equity holders of the parent
2,233,510,395 1,863,346,689
Non-controlling interests
1,784
1,995
Total equity
2,233,512,179
1,863,348,684
LIABILITES
Non-current liabilities
Deferred tax liabilities
14
178,701,020
184,193,701
Taxes payables
8.f.
- 204,959
Contract liabilities
8.d.
111,716,068
119,360,467
Loans
13
501,713,249
895,185,496
Total non-current liabilities
792,130,337
1,198,944,623
Current liabilities
Provisions
15
421,095
5,388,809
Contract liabilities
8.d.
7,462,653
9,835,782
Other payables
8.e.
243,983
161,960
Taxes payables
8.f.
10,773,589
5,527,089
Income tax payable
175,487,218
3,102,955
Payroll and social security taxes payable
8.o.
19,448,300
13,556,405
Loans
13
78,396,382
131,893,312
Trade payables
8.g.
76,722,524
90,857,949
Total current liabilities
368,955,744
260,324,261
Total liabilities
1,161,086,081
1,459,268,884
Total equity and liabilities
3,394,598,260
3,322,617,568

The accompanying notes are an integral part of these consolidated financial statements.

F-6
TRANSPORTADORA DE GAS DEL SUR S.A.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(Stated in thousands of pesos as described in Note 3 and 4.d.)

Shareholders Contributions
Retained Earnings
Outstanding shares
Treasury shares
Reserve for




capital,

Inflation
Inflation
Acquisition


expenditures


adjustment
adjustment
cost of Additional acquisition of Accumulated Non-
Common to common
Common
to common
treasury
paid-up
Legal
treasury shares
retained

Controlling
stock
stock
stock (1)
stock (1)
shares (1) capital
Subtotal
reserve
and/or dividends
earnings
Subtotal Total interests Total
Balances at December 31, 2021
752,761
737,787,403
41,734
40,903,836
( 74,082,856
)
( 21,490,781
)
683,912,097
72,839,829
559,734,539
276,490,290
909,064,658
1,592,976,755
665
1,592,977,420
Resolutions of the Ordinary and Extraordinay Shareholders ´
Meeting held on April 5, 2022
Legal Reserve
-
-
-
-
-
-
-
13,824,513
-
( 13,824,513
)
-
-
-
-
Derecognition of reserves
-
-
-
-
-
-
-
-
( 559,734,539
)
559,734,539
-
-
-
-
Reserve for capital expenditures, acquisition of treasury
shares and/or dividends
- - - - - - - - 822,400,316 ( 822,400,316 ) - - - -
Comprehensive income for the year
-
-
-
-
-
-
-
-
-
219,157,465
219,157,465
219,157,465
80
219,157,545
Balances at December 31, 2022
752,761
737,787,403
41,734
40,903,836
( 74,082,856
)
( 21,490,781
)
683,912,097
86,664,342
822,400,316
219,157,465
1,128,222,123
1,812,134,220
745
1,812,134,965

Resolutions of the Ordinary and Extraordinay Shareholders ´
Meeting held on April 19, 2023
Legal Reserve
- - - - - - - 10,957,874 - ( 10,957,874 ) - - - -
Derecognition of reserves
- - - - - - - - ( 822,400,316 ) 822,400,316 - - - -
Reserve for capital expenditures, acquisition of treasury shares and/or dividends
- - - - - - - - 1,030,599,907 ( 1,030,599,907 ) - - - -

Comprehensive income for the year - - - - - - - - - 51,212,469 51,212,469 51,212,469 1,250 51,213,719
Balances at December 31, 2023 752,761 737,787,403 41,734 40,903,836 ( 74,082,856 ) ( 21,490,781 ) 683,912,097 97,622,216 1,030,599,907 51,212,469 1,179,434,592 1,863,346,689 1,995 1,863,348,684

Resolutions of the Ordinary and Extraordinay Shareholders ´
Meeting held on April 17, 2024
Legal Reserve
- - - - - - - 2,560,624 - ( 2,560,624 ) - - - -
Derecognition of reserves
- - - - - - - - ( 1,030,599,907 ) 1,030,599,907 - - - -
Reserve for capital expenditures, acquisition of treasury shares and/or dividends
- - - - - - - - 1,079,251,752 ( 1,079,251,752 ) - - - -

Comprehensive income for the year - - - - - - - - - 370,163,706 370,163,706 370,163,706 ( 211 ) 370,163,495

Balances at December 31, 2024 752,761 737,787,403 41,734 40,903,836 ( 74,082,856 ) ( 21,490,781 ) 683,912,097 100,182,840 1,079,251,752 370,163,706 1,549,598,298 2,233,510,395 1,784 2,233,512,179

(1)
As of December 31, 2024, corresponds to 41,734,225 shares of par value Ps. 1 each, equivalent to 5.25 % of the share capital. The acquisition cost of these shares amounted to Ps. 74,082,856 .

The accompanying notes are an integral part of these consolidated financial statements.

F-7

TRANSPORTADORA DE GAS DEL SUR S.A.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(Stated in thousands of pesos as described in Note 3 and 4.d.)

2024
2023
2022
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Total comprehensive income for the year
370,163,495
51,213,719
219,157,545
Reconciliation of total comprehensive income to cash flows provided by operating activities:
Depreciation of property, plant and equipment
129,666,014
132,025,049
132,728,649
Derivative financial instrument results
-
-
865,194
Disposal of property, plant and equipment
2,813,761
2,418,109
652,648
Share of (gain) / loss from associates
( 243,800
)
66,198
( 611,256
)
Increase in provisions
( 1,955,883
)
3,117,127
5,261,163
Interest expense accrual, net
58,827,531
53,420,014
44,333,563
Interest income on other financial assets other than cash and cash equivalents
( 187,400,075
)
( 434,892,215
)
( 143,604,875
)
Income tax
211,939,479
43,787,727
115,697,238
Reversal of Impairment of Property, plant and equipment
( 39,625,359
)
-
-
Allowance for doubtful accounts
-
371,535
-
Foreign exchange loss
85,167,175
524,913,229
190,569,354
Notes repurchase result
- - 6,985,912
Loss / (gain) on net monetary position
9,650,887
107,295,735
( 61,761,142
)
Changes in assets and liabilities:
Trade receivables
( 120,856,960
)
( 84,669,564
)
( 52,981,725
)
Other receivables
( 43,895,260
)
( 31,852,057
)
( 44,149,015
)
Inventories
4,004,573
( 12,708,102
)
( 4,502,400
)
Trade payables
30,454,048
63,927,411
30,106,936
Contract assets
( 6,141
)
8,974
-
Payroll and social security taxes
13,223,018
7,380,528
7,852,504
Taxes payables
8,141,355
3,550,899
2,102,950
Other payables
169,609
( 468,917
)
( 219,872
)
Provisions
-
( 10,122
)
( 137,309
)
Interest paid
( 32,062,121
)
( 34,378,618
)
( 38,824,019
)
Income tax paid
( 3,991,215
)
( 24,346,128
)
( 174,195,706
)
Contract liabilities
( 10,017,528
)
42,647,097
5,569,137
Derivative financial instruments payment
- - ( 741,191 )
Cash flows provided by operating activities
484,166,603
412,817,628
240,154,283
CASH FLOWS USED IN INVESTING ACTIVITIES
Additions to property, plant and equipment
( 289,810,806
)
( 294,161,584
)
( 171,618,681
)
Financial assets not considered cash equivalents
( 95,087,060
)
( 155,364,399
)
( 101,096,588
)
Cash flows used in investing activities
( 384,897,866
)
( 449,525,983
)
( 272,715,269
)
CASH FLOWS (USED IN) / PROVIDED BY FINANCING ACTIVITIES
Proceeds from loans
585,355,570
77,837,122
41,805,876
Payment of loans
( 615,942,992
)
( 23,716,258
)
( 584,462
)
Payments of leases
( 761,036 ) ( 436,152 ) -
Cost of repurchase of notes
-
-
( 16,631,309
)
Cash flows (used in) / provided by financing activities
( 31,348,458
)
53,684,712
24,590,105
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
67,920,279
16,976,357
( 7,970,881
)
Cash and cash equivalents at the beginning of the year
14,370,655
20,269,016
58,502,525
Foreign exchange gain on Cash and cash equivalents
170,952
3,159,840
1,983,871
Monetary results effect on Cash and cash equivalents
( 22,488,202
)
( 26,034,558
)
( 32,246,499
)
Cash and cash equivalents at the end of the year
59,973,684
14,370,655
20,269,016

The accompanying notes are an integral part of these consolidated financial statements.
For further information, see Note 6.

F-8
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)

1.
BUSINESS DESCRIPTION

Business Overview

Transportadora de Gas del Sur S.A. (“ tgs ” or the “Company”) is one of the companies created as a result of the privatization of Gas del Estado S.E. (“GdE”). tgs commenced operations on December 28, 1992 and it is mainly engaged in the Transportation of Natural Gas, and Production and Commercialization of natural gas Liquids (“Liquids”). TGS’s pipeline system connects major natural gas fields in southern and western Argentina with natural gas distributors and industries in those areas and in the greater Buenos Aires area. The natural gas transportation license to operate this system was exclusively granted to tgs for a period of thirty-five years (“the License”). tgs is entitled to a one -time extension of ten years provided that it has essentially met the obligations imposed by the License and by Ente Nacional Regulador del Gas (National Gas Regulatory Body or “ENARGAS”). The General Cerri Gas Processing Complex (the “Cerri Complex”), where TGS processes natural gas to obtain liquids, was transferred from GdE along with the gas transmission assets. tgs also provides midstream services, which mainly consist of gas treatment, removal of impurities from the natural gas stream, gas compression, wellhead gas gathering and pipeline construction, operation and maintenance services. In addition, telecommunications services are provided through the subsidiary Telcosur S.A. (“Telcosur”). These services consist of data transmission services through a network of terrestrial and digital radio relay.

Subsequently, the corporate purpose of the Company was modified to incorporate the development of complementary activities, incidental, linked and / or derived from natural gas transportation, such as the generation and commercialization of electric power and the provision of other services for the hydrocarbon sector in general.

Dedicated Branch

On November 4, 2024, the Board of Directors of the Company decided to establish the Dedicated Branch Transportadora de Gas del Sur S.A. – Sucursal Dedicada 1 (hereinafter “Dedicated Branch”), to request adherence to the Large Investment Incentive Regime (“RIGI”), in relation to the project to expand the transportation capacity of the Perito Francisco Pascasio Moreno Gas Pipeline (“Perito Moreno Gas Pipeline”), on the Tratayén – Salliqueló route.

The RIGI promotes investment in projects that qualify as large long-term investments in Argentina by granting a series of tax, customs, and exchange incentives, as well as an efficient system for the protection of rights and resolution of disputes. Projects that adhere to the RIGI must be developed in specific sectors defined by Law 27,742 and Decree 749/2024, including the activities of Transportation and Storage of oil and gas.

The Dedicated Branch will have the sole purpose of executing of a unique project in the oil and gas sector, which involves the transportation capacity of section I of the Perito Moreno Gas Pipeline, on the Tratayén - Saliquelló route and the exploitation of the project, which includes transporting and/or using and/or disposing of the natural gas transportation capacity resulting from the expansion project for itself and for third parties through any title, modality or figure permitted by applicable regulations. For such purposes, the Dedicated Branch may carry out all those activities that are accessory, complementary and/or subsidiary to the execution, operation and maintenance of said project (including but not limited to the construction, operation and/or maintenance of pipelines, facilities and/or plants) and the transportation and/or disposal of hydrocarbon transportation capacity under the terms permitted by applicable laws; having full legal capacity to acquire rights and/or enter into obligations and/or perform all acts that are not prohibited by law or its bylaws (including fulfilling mandates and commissions). To achieve its purpose, it may also carry out any type of financial operations in general, excluding those provided for in the Financial Institutions Act.

On December 2, 2024, the Dedicated Branch was registered in IGJ.

F-9
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
As of the date of issuance of these consolidated financial statements, the National Government has not issued the tender.

For more information, see note 17.d) Regulatory framework – Dedicated Branch.

Major Shareholders

tgs’ controlling shareholde r Compañía de Inversiones de Energía S.A. (“CIESA”), holds 51 % of the common stock of the company, the National Social Security Administration (“ANSES”) holds 24 % and the remaining 25 % is held by the investing public ( tgs has 5.25 % of the shares in the portfolio).

CIESA is under joint control of Pampa Energía S.A. (“Pampa Energía”) with 50 % and Grupo Inversor Petroquímica S.L. (“GIP”) and PCT L.L.C. with the remaining 50 %.

The following table shows the organizational structure, shareholders and related parties of tgs as of December 31, 2024:
graphic

44 %, 24 %, 8 %, 12 %, 5 %, 99.98 %, 0.02 %, 49 %, 25.5 %, 20.4 %, 5.10 %

Economic context

The Company operates in a complex economic context whose main variables have recently had strong volatility as a result of political and economic events at the national level.

Among the main macroeconomic variables for 2024 we can mention:

•
The CPI for 2024 was 117.8 %, while the CPI for 2023 was 211.4 %. After taking office on December 10, 2023 and raising the official exchange rate from $ 366 to $ 800 , inflation for the month of December 2023 registered a variation of 25.5 %, the highest in the last 3 decades. In 2024, meanwhile, after increases of 20.6 %, 13.2 % and 11 % were recorded in the first 3 months of the year, the speed of inflation slowed down to 2.7 % in October, the lowest figure in 3 years.

•
The WPI variation for the year 2024 was 67.1 %, having accumulated 276.4 % in 2023.

•
Following the aforementioned devaluation of the Argentine peso on December 12, 2023, the Argentine government defined a stable devaluation path of 2 % per month for the US currency. The exchange rate, as published by the BNA, ended 2024 at $ 1,032.00 per US dollar, while as of December 31, 2023, it was $ 808.45 at the end of 2023 (representing an increase of approximately 27.7 %, below the inflation measured by the CPI). Regarding the exchange rate gap, at the time of the current administration’s assumption of office, it was above 150 %, while at the end of 2024 it was 13 % approximately.

F-10
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
•
The risk premium paid on Argentine debt, measured by the EMBI+ prepared by JP Morgan, stood at around 1,906 points as of December 31, 2023. As of December 31, 2024, it was 635 points.

•
Economic activity: GDP showed a decline of 2.1 % in the third quarter of 2024, compared to the same period of the previous year. Meanwhile, in November 2024, the monthly economic activity estimator (“EMAE”) recorded a year-on-year decline of 0.9 %. During 2024, the performance of this indicator was somewhat uneven and heterogeneous depending on each sector of the economy. While energy (favored by the development of Vaca Muerta) and mining showed the most significant increases, construction, industry and commerce fell compared to 2023.

•
The December 2024 Wage Index recorded a year-on-year increase of 145.5 %. It is important to highlight the disparity shown by the wage evolution of private workers, compared to state workers and unregistered wages. Something similar has occurred with the unemployment rate, which rose to 6.9 % in the third quarter of 2024.

•
BCRA reserves remained under pressure despite measures implemented to accelerate the inflow of foreign currency. As of December 31, 2024, net reserves reached US$ 29,612 million, from US$ 23,073 million in December 2023.

•
The trade balance for 2024 was in surplus by US$ 18,899 million, having been in deficit by US$ 6,925 million in 2023. This was mainly driven by the increase in agricultural and energy exports and the decrease in imports.

•
Since the first month of management, Javier Milei’s government has managed to reverse the fiscal deficit, achieving for the first time in 14 years a primary and financial surplus. In this regard, the financial surplus was $ 1.8 trillion, equivalent to 0.3 % of GDP. Meanwhile, the primary surplus reached 1.8 % of GDP. This was achieved thanks to a 27 % reduction in primary expenditures.

On December 10, 2023, a new administration took office, marking a change in the economic, political, and international direction the country was taking. At the time of its inauguration, unfavorable macroeconomic conditions and uncertainty regarding the political governability of the new administration led to the adoption of a series of measures within the framework of an emergency scheme aimed at eliminating the fiscal deficit (via a strong fiscal adjustment), reducing monetary issuance to zero by the BCRA (with the consequent drop in inflation), and readjusting relative prices, especially for public services.

Along with these measures, the government formalized a series of reforms, including the decree deregulating the Argentine state, the tax law and perhaps the most relevant of all, the submission to the National Congress of the text of the Ley Bases. After six months of debate in the National Congress, on June 28, 2024, the Chamber of Deputies approved the final text of the Basic Law, which had previously received partial approval from the Senate. Among other issues, the Basic Law includes:

•
The declaration of public emergency in administrative, economic, financial and energy matters for a period of one year .
•
Changes in the calculation of income tax for individuals, in the single tax regime, personal property and money laundering.
•
The privatization, whether total or partial, of certain companies and corporations that are wholly or majority owned by the national State is authorized.
•
A Large Investment Incentive Regime (“RIGI”) for projects that meet certain conditions. The RIGI is a regime that grants tax, customs and exchange benefits with the aim of increasing the level of private investment in the economy.

F-11
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
•
A reform of the labor and retirement system.
•
The amendment to the Natural Gas Law N° 24,076 in order to, among other things, allow the extension of the License for an additional period of 20 years (as opposed to the 10-year extension originally established).
•
Amendments to Hydrocarbons Law N° 17,319 to provide legal certainty for Argentinas´ energy development and ensure free trade and competition.

The Ley Bases has been challenged by various sectors of the economy and the political spectrum and has been challenged in court, however, this is of utmost importance for the economic and institutional restructuring and recovery of the country.

Although some of the reforms proposed by the Ley Bases have already been implemented, others are in the process of being regulated and discussed by the legislature. For this reason, at the date of issue of the Report, it is not possible to foresee the impact that the Ley Bases and the fiscal package could have on the results, financial situation and cash flow of the Company. However, given the financial situation of tgs , it is estimated that it will be able to continue to meet its financial commitments in the near future.

On April 11, 2025, the Government announced the launch of the next phase of its macroeconomic plan, which includes, among other measures: (i) allowing the exchange rate of the U.S. dollar in the official foreign exchange market (MULC) to fluctuate within a moving band between ARS 1,000 and ARS 1,400, with the band limits widening at a monthly rate of 1%; (ii) eliminating the “dólar blend” mechanism, lifting foreign exchange restrictions for individuals, allowing profit distributions to foreign shareholders starting from fiscal years beginning in 2025, and relaxing deadlines for foreign trade payments; and (iii) reinforcing the nominal anchor by enhancing the monetary policy framework, under which the Central Bank will not issue pesos to finance the fiscal deficit or to remunerate its monetary liabilities.

The context of volatility and uncertainty continues at the date of issue of these consolidated financial statements. Government measures already implemented, or those that may be implemented in the future, could eventually affect the results of operations, financial situation and assets of the Company.

Likewise, the Company’s management permanently monitors the evolution of the variables that affect its business, to define its course of action and identify the potential impacts on its equity and financial situation. The reforms proposed by the new government began their legislative discussion process. It is not possible to predict at this time its evolution or new measures that could be announced. Likewise, the Company cannot guarantee that the aforementioned macroeconomic difficulties or the adoption of new measures by the Argentine Government to control inflation may affect its operations and financial situation.

The Company’s financial statements must be read in light of these circumstances.

2.
CONSOLIDATED FINANCIAL STATEMENTS

tgs presents its consolidated financial statements including Telcosur S.A. (“Telcosur”), its consolidated subsidiary, which are jointly referred to as “ tgs ” or “the Company”.

These consolidated financial statements were approved and authorized for issuance by the Company’s Board of Directors on April 24, 2025.

3.
BASIS OF PRESENTATION

These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”).

The CNV, in Title IV, Chapter III, Article 1 of the Rules has provided that listed companies must submit their consolidated financial statements by applying Technical Resolution No. 26 amended by Resolution N° 29 of the Argentine Federation of Professional Councils of Economic Sciences (“FACPCE”), which adopts the IFRS Accounting Standards issued by the IASB, its amendments and circulars for the adoption of IFRS Accounting Standards that the FACPCE dictates in accordance with the provisions of that Technical Resolution.
The preparation of the consolidated financial statements in conformity with IFRS Accounting Standards requires management to make accounting estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting fiscal year. Estimates are used when accounting for the allowance for doubtful accounts, income taxes, provisions for legal claims and others, depreciations and recoverable value of assets. Actual results could be significantly different from such estimates.

F-12
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
The presentation in the statement of financial position distinguishes between current and non-current assets and liabilities. The assets and liabilities are those expected to be realized or settled within twelve months after the end of the reporting period under review, and those held for sale. The fiscal year begins on January 1 and ends on December 31 of each year. The economic and financial results are presented on a fiscal year basis.

The consolidated financial statements have been stated in thousands of Argentine pesos (“Ps.”) which is the functional currency of the Company, unless otherwise stated, and restated to reflect the effects of inflation as indicated in Note 4.d).

4.
SIGNIFICANT ACCOUNTING POLICIES

4.a) New IFRS accounting standards

4.a 1) New standards and interpretations issued by the IASB effective for the years beginning on or after January 1, 2024 adopted by the Company

The new accounting standards, amendments and interpretations issued by the IASB that became effective as of January 1, 2024 and that have not had an impact on the Company’s consolidated financial statements are the following:


Supplier finance arrangements – Amendments to IAS 7 “Statement of cash flows” and IFRS 7 “Financial instruments – Disclosure”


In May 2023, the IASB has issued new reporting requirements on supplier financing arrangements. The modifications include new requirements for qualitative and quantitative information regarding financing agreements with financial providers that allow evaluating the effects of these agreements on liabilities, cash flows and exposure to liquidity risk.


Supplier financing arrangements are those characterized by: (i) a financial provider paying the amount that an entity owes to its commercial supplier and (ii) the entity pays the financial provider, according to the terms of the agreement.


The application of this accounting standard did not have a significant impact on the Company´s consolidated financial statements.


Amendments to IAS 1 - Classification of Liabilities as Current or Non-current and Non-current liabilities with covenants

Amendments made to IAS 1 clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the entity’s expectations or events after the reporting date (for example, the receipt of a waiver or a breach of covenant that an entity is required to comply with only after the reporting period).

Covenants of loan arrangements will not affect classification of a liability as current or non-current at the reporting date if the entity must only comply with the covenants after the reporting date. However, if the entity must comply with a covenant either on or before the reporting date, this needs to be considered in the classification as current or non-current even if the covenant is only tested for compliance after the reporting date.

F-13
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
The application of this accounting standard did not have a significant impact on the Company´s consolidated financial statements.

Amendments to IFRS 16 – Lease liability in sale and leaseback

In September 2022, the IASB finalized narrow-scope amendments to the requirements for sale and leaseback transactions in IFRS 16 - Leases which explain how an entity accounts for a sale and leaseback after the date of the transaction.

The amendments specify that, in measuring the lease liability subsequent to the sale and leaseback, the seller-lessee determines ‘lease payments’ and ‘revised lease payments’ in a way that does not result in the seller-lessee recognizing any amount of the gain or loss that relates to the right of use that it retains. This could particularly impact sale and leaseback transactions where the lease payments include variable payments that do not depend on an index or a rate.

The amendments are applicable for annual periods beginning on or after January 1, 2024. Early application is permitted. Allows application to transactions made after the date of initial application of the amendment.

The application of this accounting standard did not have significant impact on the Company´s consolidated financial statements.

4.a.2) New IFRS Accounting standards issued that are not yet effective for the year beginning January 1, 2024.

The IFRS accounting standards that potentially have an impact on the Company, which are not mandatory and have not been adopted early in the year beginning January 1, 2024, are listed below.

On August 15, 2023, CNV General Resolution No. 972/2023 was published in the BO, which indicates that the early application of IFRS Accounting Standards and/or its modifications will not be admitted, unless the CNV specifically admits it.


Amendments to IAS 21– Lack of exchangeability


On August 15, 2023, the IASB issued the modification to IAS 21 called “Lack of exchangeability” to provide guidelines in the latter case. The amendment requires entities to apply a consistent approach to evaluating whether a currency can be exchanged for another currency, and if not, determining the exchange rate to use for measurement purposes and the disclosures that need to be provided in its financial statements.


Once the absence of exchangeability between currencies has been identified, the exchange rate must be estimated that represents that which would be obtained in an orderly transaction between market participants and that reflects economic conditions. These modifications do not specify a methodology for estimating the exchange rate to be used, but rather it must be developed by each entity.


The amendments are effective for annual reporting periods beginning on or after January 1, 2025. Early adoption is permitted.



IFRS 18 - Presentation and Disclosure in Financial Statements



This is the new standard on presentation and disclosure in financial statements, which replaces IAS 1, with a focus on updates to the statement of profit or loss.



The key new concepts introduced in IFRS 18 relate to:

F-14
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
•
the structure of the statement of profit or loss with defined subtotals;
•
requirement to determine the most useful structure summary for presenting expenses in the statement of profit or loss
•
required disclosures in a single note within the financial statements for certain profit or loss performance measures that are reported outside an entity’s financial statements (that is, management-defined performance measures); and
•
enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general

The amendments are effective for annual reporting periods beginning on or after January 1, 2027. Early adoption is permitted.

IFRS 19 - Subsidiaries without Public Accountability: Disclosures

IFRS 19, published by the IASB, focuses on financial reporting by non-public interest subsidiaries. This standard allows these subsidiaries to disclose reduced information compared to other IFRS Accounting Standards, which simplifies the preparation of their financial statements and reduces costs, while maintaining the usefulness of the information for users.

A subsidiary is eligible if:


•
it does not have public accountability; and
•
it has an ultimate or intermediate parent that produces consolidated financial statements available for public use that comply with IFRS Accounting Standards.

The amendments are effective for annual reporting periods beginning on or after January 1, 2027. Early adoption is permitted.

Amendments to IFRS 9 and IFRS 7 - Classification and measurement of financial instruments

On 30 May 2024, the IASB issued targeted amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures to respond to recent questions arising in practice, and to include new requirements not only for financial institutions but also for corporate entities. These amendments: (i) clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system; (ii) clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion; (iii) add new disclosures for certain instruments with contractual terms that can change cash flows (such as some financial instruments with features linked to the achievement of environment, social and governance targets); and (iv) update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI).

The amendments are effective for annual reporting periods beginning on or after January 1, 2026. Early adoption is permitted.

F-15
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
4.b)
Consolidation

4.b.1) Subsidiaries

Subsidiaries are all entities over which the Company has control. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases. For this purpose and unless there are specific requirements, it is generally considered that tgs has control, when it has a participation greater than 50% of the available voting rights.

The accounting policies of the subsidiaries are consistent with the accounting policies adopted by the Company.

Inter-company transactions, balances and profit or loss from transactions between group companies are eliminated. Unrealized profit or loss are also eliminated.

Detailed data reflecting subsidiary control as of December 31, 2024 is as follows:

% of shareholding and
voting
Company
Incorporation
country
Direct
Indirect
Closing date
Main activity
Telcosur Argentina 99.98 % - December 31 Telecommunication services

For consolidation purposes for the year ended December 31, 2024, the financial statements of Telcosur have been used at those dates.

The subsidiary CTG (Liquidated) does not record operations or significant assets and liabilities as of December 31, 2023. It was dissolved on December 31, 2024, having conducted no operations during the 2024 fiscal year.

Detailed data reflecting subsidiary control as of December 31, 2023 is as follows:

% of shareholding and
voting
Company
Incorporation
country
Direct
Indirect
Closing date
Main activity
Telcosur Argentina 99.98 % - December 31 Telecommunication services
CTG Argentina 100 % -
December 31
Electricity related services

On June 29, 2023, TGSLatam Energía S.A. was dissolved, and its dissolution, liquidation and cancellation of registration was registered on July 3, 2023. Therefore, as of December 31, 2024 and 2023, these financial statements do not contain the consolidation of this company. As of December 31, 2022, the Company has used the financial statements of TGSLatam as of that date.

Detailed data reflecting subsidiary control as of December 31, 2022 is as follows:

% of shareholding and
voting
Company
Incorporation
country
Direct
Indirect
Closing date
Main activity
Telcosur Argentina 99.98 % - December 31 Telecommunication services
CTG Argentina 100 % -
December 31
Electricity related services
TGSLatam Bolivia 80 % 100 % December 31 Hydrocarbons and Electricity related services

F-16
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
4.b.2) Associates

Associates are entities over which the group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the profit or loss of the investee after the date of acquisition.

The Company accounted for the investments in its associates, under the equity method  on the basis on the financial statements as of September 30, 2024, of Gas Link S.A . (“Link”) and Transporte y Servicios de Gas en Uruguay S.A. (Liquidated) (“TGU”). Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Company. The Company’s management is not aware of any significant subsequent events which affected the financial statements as of September 30, 2024, of Link from this date to December 31, 2024.

On December 26, 2024 , the TGU board decided to dissolve and liquidate said company.

Unrealized gains and losses resulting from transactions between tgs and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture.

In the table below, associate is disclosed, together with the percentage of shareholding and voting as of December 31, 2024:

Incorporation
% of
shareholding
Company
country
and voting
Closing date
Main activity
Link
Argentina
49.00 %
December 31
Pipeline exploitation and construction

As of December 31, 2022, the Company additionally considered its 49 % interest in EGS , company that was liquidated in March 2023 .

As of December 31, 2023 and 2022, the Company additionally considered its 49 % interest in TGU , company that was liquidated as of December 26, 2024 .

4.b.3) Joint arrangement

As indicated in “Note 23 – Associates and Joint Arrangement”, on August 7, 2017, the Company proceeded to create a UT (similar to a joint operation) with SACDE Sociedad Argentina de Construcción y Desarrollo Estratégico S.A. (“SACDE”) (“UT”). This operation is evaluated as a joint agreement under the provisions included “IFRS 11 - Joint Arrangements” since the parties have joint control of the operation, meaning that the decisions of the relevant activities are taken under the unanimous consent of the parties.

The Company has defined that the UT constitutes a joint operation given that it grants its participants a percentage of the rights over the assets and liabilities arising from each contract. Accordingly, the Company recognizes its share in the jointly operated assets, liabilities, revenues, costs and expenses.

Accounting policies applicable to the UT have been modified and adapted, if applicable, to ensure consistency with the policies adopted by the Company. For further information regarding the UT, see Note 23.

F-17
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
4.c)
Foreign currency translation

4.c.1) Functional and presentation currency

The consolidated financial statements are presented in thousands of Argentine Pesos, which is the Company’s functional currency restated to reflect the effects of inflation as indicated in Note 4.d). Each subsidiary or associate determines its own functional currency based on the currency of the primary economic environment in which these entities operate.

4.c.2) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at reporting date exchange rates, are recorded in the Statement of Comprehensive Income within financial income and financial expenses, as appropriate.

4.c.3) Associates

The functional currency of the associate company TGU was the US dollar, because it was the currency in which it substantially generated its income and incurred its expenses. Assets and liabilities were converted into Argentine pesos using the exchange rate prevailing at the end of each year, their common stock and retained earnings at their historical exchange rates and results at average exchange rates.

On December 26, 2024, said company was liquidated, so no balances are recorded for it as of December 31, 2024.

4.d)
Restatement to current currency - Comparative Information

4.d.1) Regulatory framework

The consolidated financial statements as of December 31, 2024, including comparative figures, have been restated to take into account changes in the general purchasing power of the Company’s functional currency (the Argentine peso) in accordance with IAS 29 “Financial Reporting in hyperinflationary economies” (“IAS 29”) and CNV General Resolution No. 777/2018. As a result, the financial statements are stated in terms of the current unit of measurement at the 2024 balance sheet date.

IAS 29 requires that the financial statements of an entity that reports in the currency of a hyperinflationary economy, regardless of whether they are based on the historical cost method or the current cost method, are expressed in terms of the current unit of measurement at the closing date of the reporting period. In order to conclude on the existence of a hyperinflationary economy, the standard details a series of factors to be considered, among which is a cumulative inflation rate over three years that approaches or exceeds 100%.

The accumulated inflation in three years is over 100%. Likewise, both the National Government projections and other available projections indicate that this trend will not be reversed in the short term.

To evaluate the aforementioned quantitative condition, and also to restate the financial statements, the CNV has established that the series of indexes to be used for the application of IAS 29 is determined by the FACPCE. This series of indexes combines the National Consumer Price Index (“CPI”) as of January 2017 (base month: December 2016) with the Domestic Wholesale Price Index (“WPI”), both published by the Institute National Statistics and Census (“INDEC”) until that date. For the months of November and December 2015, for which there is no information from the INDEC on the evolution of the WPI, the variation in the CPI of the Autonomous City of Buenos Aires was applied.

Considering the aforementioned index, inflation was 117.8 %, 211.4 % and 94.8 % in the years ended December 31, 2024, 2023 and 2022 respectively.

F-18
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
4.d.2) Restatement mechanism

The financial statements must be adjusted to consider changes in the general purchasing power of the currency, so that they are expressed in the current unit of measurement at the end of the reporting period. Said requirements also include all the comparative information of the financial statements, without modifying the decisions made based on the financial information corresponding to those financial years.

The figures as of December 31, 2023 and 2022, which are presented in these Consolidated Financial Statements for comparative purposes, arise from the restatement to the current unit of measure of the Financial Statements as of said dates, in accordance with IAS 29.

Restatement of the balance sheet


i. Monetary items (those with a fixed nominal value in local currency) are not restated, since they are already expressed in the current unit of measurement at the closing date of the reporting period. In an inflationary period, maintaining monetary assets generates loss of purchasing power and maintaining monetary liabilities generates a gain in purchasing power, provided that such items are not subject to an adjustment mechanism that compensates to some extent for these effects. The monetary loss or gain is included in the result of the period in which it is reported.


ii. The non-monetary items measured at their current values at the end of the reporting period are not restated for the purpose of their presentation in the balance sheet, but the adjustment process must be completed to determine in terms of a homogeneous unit of measurement the results produced by the holding of these non-monetary items.


iii. The non-monetary items measured at historical cost or at a fair value as of a date prior to the closing date of the reporting period are restated by coefficients that reflect the variation in the general price level from the date of acquisition or revaluation to the closing date, proceeding then to compare the restated amounts of those assets with the corresponding recoverable values.


iv. The restatement of non-monetary assets in the terms of the current unit of measurement at the end of the reporting period without an equivalent adjustment for tax purposes, results in a temporary taxable difference and the recognition of a deferred tax liability whose counterparty is recognized in the result of the period. For the closing of the subsequent period, the deferred tax items are restated for inflation to re-determine the charge to the result of the next period.


v. When the capitalization of costs for loans in non-monetary assets in accordance with IAS 23 is applicable, the portion of those costs that compensate the lender for the effects of inflation is not capitalized.

Restatement of the Comprehensive Income Statement

Revenues and expenses (including interest and foreign exchange differences) are restated from the date of their booking, except for those items of the result that reflect or include in their determination the consumption of assets measured in purchasing power of a date before the consumption booked, which are restated based on the date of origin of the asset to which the item is related (for example, depreciation and other consumption of assets valued at historical cost); and also those results that arise from comparing two measurements expressed in purchasing power currency of different dates, for which it is necessary to identify the amounts compared, restate them separately, and make the comparison, but with the amounts already restated.

The result of the exposure to the change in the purchasing power of the currency (monetary results) is presented in a separate line and reflects the effect of inflation on the monetary items.

Restatement of the statement of changes in equity

As of the transition date (January 1, 2016), the Company applied the following special rules:

F-19
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
i. The components of the capital stock were restated from the dates they were contributed.

ii. Reserved earnings were maintained at the date of transition at their nominal value (legal amount without restatement).

iii. The restated unallocated results were determined by the difference between the net assets restated at the transition date and the rest of the initial equity components expressed as indicated in the preceding sections.


iv. After the restatement at the transition date, all the components of the equity are restated by applying the general price index from the beginning of the period, and each variation of those components is restated from the date of contribution or from the moment in which is added by any other means.

Restatement of the statement of cash flows

IAS 29 requires that all items in this statement should be restated in terms of the current unit of measurement as of the closing date of the period for which it is reported.

The monetary result generated by cash and cash equivalents is presented in the Statement of Cash Flows separately from cash flows from operating, investing and financing activities, as a specific item of the reconciliation between cash and cash equivalents at the beginning and at the end of the year.

4.e)
Financial instruments

4.e.1) Financial assets

Recognition and initial measurement

Financial assets are classified, at the time of initial recognition, as:

i.
Financial assets subsequently measured at amortized cost, and
ii.
Financial assets subsequently measured at fair value (either with changes in other comprehensive income or with changes in results).

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. For additional information, see Note 16.2.1.

Subsequent measurement

After initial recognition, financial assets are measured according to their initial classification according to the following categories:

Financial assets measured at amortized cost

It is the most relevant category used by the Company, financial assets are classified and measure at amortized cost if both of the following conditions are met:

•
The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and
•
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets measured at amortized cost are subsequently measured using the effective interest method.

Gains and losses are recognized in the Statement of Comprehensive Income under financial results when the asset is derecognized, modified or impaired.

F-20
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Financial assets measured at fair value through OCI (Debt instruments)

Corresponds to financial assets that are maintained in a business model whose objective is achieved by obtaining contractual cash flows and selling them.

Unrealized gains or losses arising from changes in fair value are recognized as other comprehensive income, except for the accrual of interest, exchange rate difference and the impairment of such assets that are recognized as financial results in the Statement of Comprehensive Income. At the time the asset is written off, the accumulated gain or loss is recognized as a financial result and it is eliminated from the respective reserve.

As of December 31, 2024 and 2023, the Company has not recognized any financial assets under this category.

Financial assets designated at fair value through OCI (equity instruments)

Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under IAS 32.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognized as other income in the Statement of Comprehensive Income when the right of payment has been established, except when the Company benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.

As of December 31, 2024 and 2023, the Company has not recognized any financial assets under this category.

Financial assets measured at fair value through profit or loss

In the event that financial assets are not classified according to the aforementioned categories, they will be subsequently measured at fair value, presenting gains or losses arising from changes in fair value in the income statement within financial results in the year in which they are originated.

Impairment of financial assets

The Company applies the Expected Credit loss (“ECL”) model for those financial assets accounted for at amortized cost or at fair value through OCI. The ECL is based on the difference between the contractual cash flows due in accordance with the contract and the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. To this end, the Company evaluates various factors, including credit risk, historical trends and other available information.

The application of this model implies recognition of:


•
Expected credit losses within of 12 months: these are expected credit losses that result from possible default events within 12 months after the filing date; and


•
Expected credit losses during the life of the asset: these are expected credit losses that result from possible events of default during the expected life of a financial instrument.

In case a loss allowance is recognized, the carrying amount of the asset is reduced through an impairment account and the amount of the loss is presented in the Statement of Comprehensive Income at the time it occurs. Subsequent recoveries of amounts previously written off are credited in the same line item.

The impairment tests performed on accounts receivable are described in Note 4.h).

F-21
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
4.e.2) Financial liabilities

Includes trade payables, loans, other payables and certain payroll and social security taxes payable.

Recognition and initial measurement

Financial liabilities are classified, at initial recognition, as subsequently measured at amortized cost or at fair value through profit or loss, as appropriate.

All financial liabilities are initially recognized at fair value net of transaction costs.

They are classified in current liabilities, except those whose maturity exceeds twelve months, which are classified as non-current liabilities.

Subsequent measurement

Financial liabilities measured at fair value through profit or loss

I ncludes financial liabilities held for trading. As of December 31, 2024 and 2023, there are no instruments classified in this category.

Financial liabilities measured at amortized cost

The Company includes financial liabilities with fixed or determinable payments that are not quoted in an active market. Current liabilities are included, except those whose maturity exceeds twelve months including premiums, discounts and direct expenses, which are included as non-current liabilities. They are measured using the effective interest method. As of December 31, 2024 and 2023, all of the Company’s financial liabilities were classified in this category.

Offsetting of financial instruments

Financial assets and liabilities are offset when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.

4.f)
Derivative financial instruments

Derivative financial instruments are recognized at their fair value at inception and subsequently measured at their fair value and disclosed as assets or liabilities depending on if it is gain or loss. The results of derivative financial instruments are classified under “Financial income / expenses” in the Statement of Comprehensive Income, or in the other comprehensive income if hedge accounting is applied.

Derivative financial instruments are measured in accordance with IFRS 13 “Fair value measurement”.

The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument or not and, according to the nature of the item being hedged.

4.g)
Inventories

Inventories consist of natural gas (in excess of the “Line Pack” classified as property, plant and equipment) in the Company’s pipeline system, and the liquids stored obtained from natural gas processing at the Cerri Complex.

F-22
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Inventories are measured at the lower of cost restated for the inflation effects as mentioned in Note 4.d. or net realizable value. Cost is determined using the weighted average cost method. The cost of inventories includes expenditure incurred in purchasing and production and other necessary costs to bring them to their existing location and condition.

The net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs to make the sale.

The assessment of the recoverable value of these assets is made at each reporting date, and the resulting loss is recognized in the statement of comprehensive income when the inventories are overstated.

4.h)
Trade receivables, contract assets and other receivables

Trade receivables are amounts due from customers for goods and services performed in the ordinary course of business. Contract assets are unbilled amounts due to customers related to works in progress.

Trade receivables, contract assets and other receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less allowance for trade receivables.

The Company applies the simplified approach to measuring expected credit losses for trade receivables, contract assets and other receivables. For this purpose, customers have been grouped based on shared credit risk characteristics, the existence of guarantees, historical credit losses experienced and the existence of judicial proceedings aimed at obtaining payment. Once each group was defined, an expected uncollectibility rate calculated based on historic default rates adjusted to future economic conditions was defined.

If an impairment loss is recognized, the book amount of the asset is reduced through a provision account and the amount of the loss is recognized in the Statement of Comprehensive Income at the time it occurs. If in subsequent periods the amount of the impairment loss decreases, the reverse of the same is also recorded in the Statement of Comprehensive Income .

4.i)
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits with banking institutions and other short-term, highly liquid investments with original maturities not exceeding three months and without being subject to a risk of a significant change of value.

4.j)
Property, plant and equipment (“PPE”)

Assets transferred from the privatization of GdE: The value of these assets was determined based on the price paid for the acquisition of 70 % of the Company’s common stock, which amounted to U.S.$ 561.2 million. This price was the basis to determine a total value of common stock of U.S.$ 801.7 million, which, when added to the debt assumed under the Company’s privatization agreement (the “Transfer Agreement”) of U.S.$ 395 million, resulted in a total value for PPE of U.S.$ 1,196.7 million. Such value, converted at the exchange rate in effect as of the date of the Transfer Agreement, has been restated for the effects of inflation as mentioned in Note 4.d, and less accumulated depreciation.

Line pack: It represents the natural gas in the transportation system that is necessary to keep the system at operating capacity, valued at acquisition cost and restated for the effects of inflation as mentioned in Note 4.d.

Materials: Materials are recognized at historical cost restated in accordance with Note 4.d. Consumption is restated based on the origin date of the acquisition of the asset.

Other items of PPE: have been valued at acquisition cost restated for the effects of inflation as mentioned in Note 4.d, and net of accumulated depreciation. They include, mainly, all the investments made to achieve system integrity and public safety equal to those required by international standards. Such investments included, among others, the costs of survey programs related to internal and external pipeline inspection, cathodic protection, pipeline replacement and recoating, and the facilities affected to the Liquids Production and Commercialization and Midstream segment.

F-23
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
PPE additions are recorded at acquisition or construction cost less accumulated depreciation and impairment losses (if applicable), except la nd, which is recorded at historical cost acquisition minus any impairment (if applicable), all this restated for the effects of inflation as mentioned in Note 4.d. The cost includes the cost of replacing significant components and the borrowing costs derived from loans that finance its construction to the extent that the requirements for recognition as assets are met.

Subsequent costs restated for the effects of inflation as mentioned in Note 4.d. are included in the carrying amount of the asset or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be reliably measured. The carrying amount of a replaced component is written off. In the same way, when a major maintenance is carried out, they are added to the cost of the equipment if the recognition criteria are satisfied, eliminating any remaining non-depreciated remaining value restated for the effects of inflation as mentioned in Note 4.d, if any, of previous overhaul.

In this sense, Resolutions No. 1660/2000 (“Resolution 1660”) and No. 1903/2000 (“Resolution 1903”) issued by ENARGAS include definitions about the costs that should be considered as improvements or maintenance expenses. All other repairs and maintenance are charged to the statement of comprehensive income when incurred.

In accordance with IAS 23, the Company capitalizes financial expense on long term construction projects, until the moment in which the asset is in conditions for its use. Capitalization of borrowing costs is carried out considering the provisions of IAS 29, recording as an expense in the Statement of Comprehensive Income the part of the borrowing costs that compensates for inflation during the same period. For the years ended December 31, 2024 and 2023, there have not been capitalized borrowing costs.

Depreciation related to natural gas transportation assets is computed under the straight-line method over the estimated useful lives of the specific assets, which are not exceeding the maximum useful lives established by ENARGAS through Resolutions 1660 and 1903.

For depreciation of all other PPE, the Company uses the straight-line method of depreciation based on the useful life assigned to each item.

Major maintenance costs are depreciated according to the estimated time until the next major maintenance planned. Regarding the capitalized financial costs, they are depreciated based on the remaining useful lives of those components of PPE that originated such capitalization.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. For further information, see Note 12.

The result generated by the disposal of PPE components is recognized in the year in which it is generated.

Impairment of non-financial assets: The Company’s Management assesses at each reporting period whether there is an indication that an individual component or a group of PPE may be impaired.

If any indication exists, the Company estimates the asset´s recoverable amount. An asset´s recoverable amount is the higher of the fair value less costs to sell that asset, and its value-in-use.

That amount is determined for and individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets; in which case, the cash flows of the group of assets that form part of the cash-generating unit (“CGU”) to which the belong are taken.

F-24
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Where the carrying amount of an individual asset or CGU exceeds its recoverable amount, the individual asset or CGU, as the case may be, is considered impaired and is written down to its recoverable amount. Impairment losses are recognized in the consolidated statement of comprehensive income.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. To such end, the Company makes estimates and assumptions of the economic conditions that will prevail throughout the useful life of the assets.

As a result of the factors mentioned above, actual cash flows and values could vary significantly from projected cash flows and the values derived from the discounting techniques used.

Impairment losses, if any, are recognized in the statement of comprehensive income.

As of December 31, 2024 and 2023, the book value of PPE did not exceed its recoverable value.

A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the recoverable amount of the individual asset or CGU since the last time an impairment loss was recognized. The reversal is limited so that the carrying amount of the asset or CGU does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of applicable depreciation, if an impairment loss had not been recognized for that asset or CGU in prior periods. Such a reversal is recognized in the income statement on the same line item in which the respective impairment charge was previously recognized, unless the asset is carried at its revalued amount, in which case the reversal is treated similarly to a revaluation increase.

Infrastructure used in the natural gas transportation service: for its measurement and disclosure, the Company has evaluated the application of Interpretation No. 12 “Service Concession Agreements” (IFRIC 12) that sets the guidelines for the accounting of private entities that provide public services through a service concession agreement or a contract of a similar nature.

Considering the current terms and conditions of the License, tgs concluded that the License is outside the scope of IFRIC 12, as it is considered in substance to provide for an indefinite term because the infrastructure will never revert to the grantor and due to the characteristics of renewal of the License that give a similar result to what which would result from having obtained a perpetual right to operate the infrastructure.

The evaluation carried out and the conclusions reached by tgs are consistent with those of other transportation and natural gas distribution companies in Argentina that are subject to the similar regulations and license agreements. The evaluation was carried out jointly, when the transportation and distribution companies adopted the IFRS Accounting Standards in Argentina in 2012, together with the FACPCE, the Buenos Aires Stock Exchange ( Bolsas y Mercados Argentinos - “BYMA”) and the CNV, considering the contributions of ENARGAS with respect to the regulatory aspects of the License agreements. In this regard, the CNV issued General Resolution No. 613/2012, ratifying that IFRIC 12 does not apply to natural gas transportation and distribution licenses established under the regulatory framework described in Note 17.

F-25
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
4.k)
Leases

Leases are recognized as a right-of-use asset and a corresponding liability at the date on which the leased asset is available for use by the Company. Each lease payment is allocated between the liability and the finance cost. The finance cost is expensed over the lease term to produce a constant periodic interest rate on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the useful life of the asset or the term of the contract.

Assets and liabilities arising from a lease are initially measured based on the present value of the lease. Liabilities include the net present value of the following lease payments:


a) Fixed payments, less any incentive receivable;
b) Variable lease payments;
c) Amounts expected to be collected as a guarantee of the residual value;
d) The exercise price of the lease option; and
e) Penalty payments for termination of the lease.

Lease payments are discounted using the interest rate implicit in the lease. If such rate cannot be determined, the Company’s incremental borrowing rate is used, which is the rate that tgs would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment.

Right-of-use assets are measured at cost which comprises the following:

a) The amount of the initial measurement of the lease liability;
b) Any lease payments made on or before the commencement date less any lease incentives received;
c) Any initial direct costs; and
d) Restoration costs

These assets, which are subject to the risk of impairment, are depreciated on a straight-line basis over the shorter of the useful life of the leased asset or the lease term.

Payments associated with short-term leases and low-value assets are recognized on a straight-line basis as an expense in the Statement of Income. Short-term leases are those with a term of 12 months or less. Low-value assets comprise computer equipment, vehicles, small items of office furniture and real estate.

The Company has rights to use assets that are shown as part of Property, plant and equipment (see Note 12). Lease liabilities are shown under Financial Debt (see Note 13). For further information regarding the expense related to short-term and low value leases and the interest expense on lease liabilities, see Note 8.j. and 8.k., respectively.

4.l)
Loans

Loans have been initially recorded at fair value net of direct attributable transaction costs. Subsequently, loans are valued at their amortized cost. Liabilities are disclosed as non-current when their maturity exceeds twelve months.

4.m)
Trade payables

Trade payables are initially recognized at fair value. Subsequently they are measured at amortized cost using the effective tax method.

4.n)
Income tax and deferred income tax

Income tax

Income tax includes current tax and deferred income tax. Income tax is presented in the Statement of Comprehensive Income.

The current income tax is calculated on the basis of tax regulations in force at each reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which tax regulations are subject to interpretation and establishes provisions if applicable. As of December 31, 2024, 2023, and 2022, there are no provisions booked for this concept.

F-26
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
The Company has calculated income tax charges using the deferred tax method, which considers the effect of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred income tax assets and liabilities are measured at undiscounted nominal value at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting period date (See Note 14).


On December 29, 2017, the National Executive Branch promulgated Law No. 27,430 (the “Law 27630”) on Tax Reform. It has introduced several changes to the text of the Income Tax Law. Law 27630 establishes a new treatment with the application of the following scale, updated for the years beginning on January 1, 2023, maintaining the 7 % rate on dividends.


Accumulated taxable net profit



More than $
to $
Will pay $
More than %
On the surplus of $
$
0
$
34,703,523
$
0
25 %

$
0
$
34,703,523
$
347,035,231
$
8,675,881
30 %

$
34,703,523
$
347,035,231
On forward
$
102,375,393
35 %

$
347,035,231

A deferred tax is recognized on the temporary differences arising from investments in subsidiaries and associates, except for deferred tax liabilities where the Company is able to control the timing of the reversal of the temporary difference and it is probable that the reversal will not occur in the foreseeable future.

Deferred tax assets and liabilities are offset if the Company has a legally enforceable right to offset recognized amounts and when deferred tax assets and liabilities relate to income tax levied by the same tax authority on the same taxable entity or different taxable entities that intend to settle tax assets and liabilities on a net basis. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be generated against which the temporary differences can be used.

The assets and liabilities generated by the application of the deferred tax were valued at their nominal amount considering the restatements for inflation mentioned in Note 4.d) and are classified as non-current assets or liabilities.

4.o)
Provisions

The Company has recorded provisions related to legal actions, judicial court, claims and administrative proceedings, including interpretive questions of the current legislation and those of regulatory nature.

Provisions for legal claims and/or claims by third parties (“legal claims and others”) are recorded at the expected cancellation value when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Estimates are reviewed and adjusted, as the Company obtains additional information to be received.

4.p)
Revenue recognition from contract with customers

Revenue is measured at the fair value of the consideration received or to be received, and represents amounts receivable for goods and/or services supplied. Revenue is recognized when the control of goods or services is transferred to the customer and the consideration is determined by an amount that reflects the consideration that the Company expects to receive.

Tax on exports and turnover tax are disclosed as Selling Expenses.

The following are the accounting policies of the Company for the recognition of revenue of each of the business segments defined by our management:

F-27
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Natural Gas Transportation

Natural Gas transportation services includes: (i) firm natural gas transportation, whose revenues are recognized when the capacity is reserved and paid for regardless of actual usage by the customer, (ii) interruptible natural gas transportation and exchange and displacement services whose revenues are recognized when services are rendered and (iii) the operation and maintenance service of the assets affected by the natural gas transportation service corresponding to the expansions promoted by the National Government and whose ownership corresponds to the trusts created for such purpose whose revenues are recognized when services are rendered.

The applicable rates arise from the tariff tables published by ENARGAS. Thus Company’s revenues are recognized by the amount for which it will be entitled to receive as consideration.

At the end of each month, tgs recognizes, over the time, its revenues from sales equivalent to the firm reserved capacity, the volumes of natural gas transported under the modalities of interruptible and exchange and displacement and by the operation and maintenance services. In return, a trade receivable is recognized which represents an unconditional right that the Company has to receive the consideration owed by the customer. On the other hand, the billing of the service is done monthly and according to the guidelines established by ENARGAS, the consideration is received within said calendar month.

Liquids Production and Commercialization

This business segment includes: (i) production and commercialization of liquids, and (ii) other liquid services.

Liquids Production and Commercialization in the domestic market

In the domestic market, tgs sells the production of propane and butane to LPG retailers in the framework of the programs created by the National Government to supply the domestic market. The sale prices are determined by the ex-Secretary of Hydrocarbon Resources (“SHR”). For more information, see Note 17.b) - Regulatory framework - Regulatory framework for non-regulated segments - to these consolidated financial statements.

The price of those tons of propane and butane that are not sold within the framework of the aforementioned programs is determined by the Secretary of Energy based on the international reference prices.

Regarding ethane sales, they are made to PBB Polisur S.R.L. (“PBB”), the only customer to whom this product is sold. To estimate transaction price, the Company uses the most probable amount method. In this regard, the Company only recognizes those transactions where it is highly probable that they will not be reversed in the future.

Liquids Production and Commercialization in the foreign market

In the foreign market, the Company markets propane, butane and natural gasoline to international traders (“traders”) and other clients of worldwide renown, some of them through trucks.

These sales are made under short-term contracts (less than one year), with the price determined as reference to international prices plus / minus a fixed amount per ton sold.

For both domestic and foreign market sales, tgs transfers control and recognizes revenues when the products are delivered to the customer and therefore the product has been accepted and there is no evidence of the existence of pending obligations by the Company. It is at that moment when a trade receivable is recognized given that the receipt of the consideration is unconditional and only the passage of time is the only requirement for receiving the consideration owed by the customer.

F-28
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Other liquids services

The Liquids production and commercialization segment also comprises reception, storage and dispatch of the liquids from the facilities located in Puerto Galván.

Revenues are recognized when the service is effectively rendered, that is, after the dispatch to each vessel. The price is agreed by the parties being a fixed amount per ton of product dispatched, there being no variable components in them. These services are billed monthly, at which time an unconditional right to receive the consideration from the client arises.

Midstream

The services included in the Midstream segment consist mainly in (i) treatment, removal of impurities and natural gas compression, including the collection and transport of natural gas (ii) inspection and maintenance of pipelines and compressor plants, (iii) services of steam generation for electricity production and management services for expansion works and steam generation for the production of electricity and (iv) natural gas transportation services in Vaca Muerta.

Revenues from sales of this business segment are recognized over the time in the period in which the service is provided. The sale price is determined according to what arises from the contractual conditions agreed between tgs and its customers. In all cases, the recognition and billing of sales income is made on a monthly basis so that at that time a sales credit is recorded.

Revenues from the participation in the joint venture, which correspond to the construction activities provided by the joint venture, are recognized based on the stage of completion of the contractual activity (percentage of completion method), considering the estimated final margin of the work. To apply the percentage of completion method, the revenue recognized at the end of the period will correspond to the total contractual revenue multiplied by the actual percentage of completion, based on the proportion of the total direct contractual costs incurred to date, and the total direct contractual costs, including the estimated costs to complete the construction. Costs incurred in excess of the costs associated with revenue are recognized in Contract assets.

Telecommunications

Revenues from the provision of Telecommunications services are recognized in the statement of comprehensive income at the time of effective performance of the service. The sale price is determined according to what arises from the contractual conditions agreed between Telcosur and its customers. The consideration is determined as a fixed monthly amount. In all cases, the recognition and billing of sales income is made on a monthly basis so that at that time a sales receivable is recorded.

Financial components

The Company does not have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

4.q)
Government grants


As part of its participation in propane and butane supply programs in the local market carried out by the National Government, (for more information see “Note 17 - Regulatory Framework - b) Regulatory framework for non-regulated segments”), the Company receives from the Secretary of Energy a series of subsidies that are recognized in accordance with the provisions of IAS 20 “Accounting for government grants and disclosures of government assistance” because they correspond to economic compensations calculated as the difference between the sale prices of the products determined in accordance with the legislation in force and the reference prices calculated by the Secretary of Energy.
F-29
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)

Government grants are recognized at fair value whenever there is reasonable assurance that will be received and that the product has been delivered. They are presented within the caption “Revenues” of the Statement of Comprehensive Income.

4.r)
Contract liabilities

Mainly consist of pre-payments for services made by customers in order to finance the works to render the service. Contract liabilities are recognized initially at their fair value. Subsequent to initial recognition, advances from customers are measured at their amortized cost based on the projections of the services to be provided that cancel the advances, restated for the inflation effects as mentioned in Note 4.d).

4.s)
Equity accounts

The activity in the Equity accounts reflects resolutions adopted by Shareholders in their meetings, or the effects of the laws or regulations in force. The equity accounts are restated for the inflation effects according to what is mentioned in Note 4.d), except the account Capital stock which is maintained at its original value.

Common stock and adjustment to common stock

The common stock consists of contributions made by shareholders represented by shares and comprises outstanding shares at their face value, net of treasury shares mentioned below.

Common stock accounts were restated in constant currency as mentioned in Note 4.d). Common stock account was kept at original value and the adjustment arising from such restatement is shown under “Inflation Adjustment to common stock”.

Common stock adjustment is not distributable in cash or in kind but may be capitalized through issuance of shares. In addition, this balance may be used to compensate accumulated losses.

Treasury shares and adjustments to treasury shares

Corresponds to the reclassification of the nominal value and corresponding restatement in constant peso (Inflation Adjustment to Common Stock) of shares issued and repurchased by the Company in market transactions, as required by the current regulations of the CNV.

Own equity instruments that are reacquired (treasury shares) are recognized at cost restated for the inflation effects as mentioned in Note 4.d) and deducted from equity. No gain or loss is recognized on the purchase, sale or cancellation of the Company’s treasury shares. Any difference between the carrying amount and the consideration, if reissued, is recognized as a premium on common stock or additional paid-up capital.

Additional paid-up capital

Corresponds to the difference between the carrying value of the treasury shares and the quoted value at the time were distributed (for more information see Note 19.b). It is restated according to what is mentioned in Note 4.d).

F-30
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Legal Reserve

Pursuant to the provisions of the Argentine Business Association Law and the CNV, the Company is required to set up a legal reserve by providing at least 5 % of the aggregate amount of net income for the year, prior year adjustments, transfers of other comprehensive income to retained earnings and accumulated losses of prior years, when this aggregate amount exceeds zero until the legal reserve equals 20 % of the sum of Capital stock and Adjustment to capital stock balances.

Distribution of dividends

The cash dividend is recognized as a liability in the Company’s financial statements in the year in which they are approved by the shareholders of the Company or the Board of Directors according to the powers delegated by the Shareholders’ Meeting, as appropriate.

Retained earnings

The outstanding balance of retained earnings includes accumulated gains or losses which were not allocated to a specific purpose reserve and, when positive, may be distributed pursuant to the decision of the Shareholders provided these retained earnings are not subject to legal restrictions, as mentioned above “Legal reserve”.

4.t)
Basic and diluted earnings per share

Earnings per share for the years ended  December 31, 2024, 2023 and 2022 were calculated as follows:

2024
2023
2022
Net income attributable to owners of the Company
370,163,706
51,212,469
219,157,465
Weighted average number of outstanding shares (1)
752,761,058
752,761,058
752,761,058
Basic and diluited earnings per share
491.74
68.03
291.14
(1)
The weighted average number of shares excludes treasury shares.

As of December 31, 2024, 2023 and 2022, there are no tgs instruments outstanding that imply the existence of potential ordinary shares, thus the basic net income per share for the years ended on December 31, 2024, 2023 and 2022 matches the diluted net income per share.

5.
CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with professional accounting standards requires the Company to make accounting estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The making of such estimates involves tgs using assumptions and presumptions that are based on a number of factors, including past trends, events known at the date of issuance of these financial statements, and expectations of future events and their outcomes.

5.a) Impairment of PPE

As mentioned in Note 4.j), management periodically evaluates the existence of significant events or changes that could have an adverse effect on the Company or will take place in the near future that could affect the recoverable amount of PPE. PPE is tested to assess whether an impairment or reversal of a previous impairment is required when significant changes took place during the period or will take place in the near future indicate that the recoverable value of the PPE amounts may be affected. These evaluations are performed at the lowest level for which identifiable cash flows exist, i.e., for each CGU. The Management considers each business segment as a CGU.

F-31
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
When assessing whether an impairment indicator may exist, tgs evaluates both internal and external sources of information, such as the following:

•
Whether significant decreases in the market values of PPE elements took place.

•
Whether prices of the main products and services that are marketed decreased.

•
Whether significant changes in the regulatory framework were introduced.

•
Whether operating costs suffered a materially increase.

•
Whether evidence of obsolescence or physical damage has occurred.

•
Whether the macroeconomic situation in which tgs carries out its activities, including significant variations in the sale prices of products, raw materials, interest rates, etc, has worsen.

Since August 2019, the main macroeconomic and business variables in Argentina suffered a significant deterioration. This situation was aggravated in 2020 by the negative consequences that COVID had on Argentina’s economic situation which led the Argentine Government to take a series of measures even affecting the regulatory framework of the natural gas transportation segment, which led to the recognition of an impairment of PPE in the fiscal year ended December 31, 2020.

Effective from April 1, 2024, ENARGAS granted a 675 % tariff increase and successive monthly increases, and the necessary steps were also taken to complete the Five-Year Tariff Review (“RQT”), whose public hearing was held on February 6, 2025 (see Notes 1 and 17). Therefore, as of December 31, 2024, the cash flows used to determine the recoverable value (value in use) of the CGU related to the Natural Gas Transportation segment were re-estimated.

The value in use of PPE is sensitive to significant variation in the assumptions applied, including the adjustment of future tariffs determined by the Argentine Government in the Natural Gas Transportation segment.

The value in use is calculated based on the discounted future cash flows. The projected cash flows are prepared taking into account significant assumptions relating to: discount rate, estimates of future tariffs and the recognition of cost adjustments and expected macroeconomic variables such as inflation and foreign exchange rates. The discount rate is based on a weighted average cost of capital (“WACC”).

In performing the analysis for the Natural Gas Transportation segment, the Management considered among others: (i) the status of the negotiations with the Argentine Government, (ii) the contractual rights derived from the License, (iii) Management´s expectations regarding the transitional tariff increase to be granted until the new RQT is concluded, (iv) Management´s expectation of the outcome of the new RQT process and (v) the impact of a cost monitoring scheme that allows for semi-annual adjustments to current tariffs.

Management has prepared, for the Natural Gas Transportation segment, three different estimates of the expected cash flows by sensitizing its main variables and assigning probabilities of occurrence based on experience and considering the current socio-economic context, as follows:

a) Base scenario: probability of occurrence assigned 70 %.
b) Optimistic scenario: probability of occurrence assigned 10 %.
c) Pessimistic scenario: probability of occurrence assigned 20 %.

In order to make the comparison between the expected cash flow and the book value of the assets assigned to the Natural Gas Transportation segment, the Company´s Management has used a weighting of the scenarios, in accordance with the probabilities mentioned above, to determine the expected value in use.

As of December 31, 2024, Management determined that no additional impairment charge needed to be recorded.

F-32
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
As of December 31, 2024, based on the foregoing, the Management has estimated that the book value of the assets comprising the natural gas transportation cash-generating unit is lower than its recoverable amount, therefore, a reversal of impairment charge was recorded on property, plant, and equipment of Ps. 39,625,359 within the categories “Pipelines,” “Compressor Plants,” “Other Industrial Plants,” “Pressure Regulation and/or Measurement Stations,” and “Other Technical Installations,” and was charged under “Reversal of Impairment of Property, Plant, and Equipment” in the consolidated statement of comprehensive income for the year ended December 31, 2024. After recognizing the aforementioned reversal of impairment, the book value of the natural gas transportation CGU amounted to Ps. 1,275,874,822 .

The estimated recoverable amounts of PPE items are sensitive to significant variation in the assumptions applied. In either case, there can be no assurance with certainty that the actual cash flows arising from these circumstances will be in line with the assumptions applied in determining the values in use. Therefore, significant differences could arise in the future in relation to the estimated values in use.

5.b) Provisions for legal and other claims

The Company has recorded certain contingent liabilities related to legal, judicial or extrajudicial actions, claims and administrative proceedings, including those of a legal and regulatory nature. The Company records liabilities when their occurrence is probable and when a reliable estimate of their amount can be made. Provisions are based on events known to the Company at the date of issuance of its financial statements, their probability of occurrence, its estimates of the outcome of such matters and the experience of its legal advisors in contesting, litigating and settling other matters. To the extent that there are more elements of judgment that allow improving the evaluation of contingencies, there will be changes in the estimates of future charges, which could have an impact on the Company’s future results and its economic and/or financial situation.

6.
SUPPLEMENTAL CASH FLOW INFORMATION

For purposes of the consolidated statement of cash flows, the Company considers all highly liquid temporary investments with an original maturity of three months or less at the time of purchase to be cash equivalents. The Cash Flow Statement has been prepared using the indirect method, which requires a series of adjustments to reconcile net income for the period to net cash flows from operating activities.

Non-cash investing and financing activities for the years ended December 31, 2024, 2023 and 2022 are presented below:

2024
2023
2022
Unpaid acquisition of PPE
20,043,792
15,470,394
12,524,749
Principal payment of financial lease (1)
7,492,491
5,844,723
6,113,542
(1)
Cancelled through compensation with trade receivables with the creditor. See Note 13.

Note 13 to these consolidated financial statements includes a reconciliation between the opening and closing balance of the financial liabilities arising from financing activities.

F-33
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
7.
CONSOLIDATED BUSINESS SEGMENT INFORMATION

IFRS 8 “Operating Segments” requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM is the Board of Directors.

The Company analyzes its businesses into four segments (i) Natural Gas Transportation Services, subject to ENARGAS regulations, (ii) Liquids Production and Commercialization, (iii) Midstream and (iv) Telecommunications. These last three business segments are not regulated by ENARGAS. Liquids Production and Commercialization business segment is regulated by the SE.

Non-current assets are mostly located in the entity´s country of domicile.

Year ended December 31, 2024
Natural Gas Liquids Production
Transportation
and Commercialization
Midstream
Telecommunications
Eliminations
Total
Revenues
441,126,075
556,662,454
215,735,400
6,242,358
-
1,219,766,287
Intersegment revenues
12,225,323
-
-
-
( 12,225,323
)
-
Cost of sales
( 214,108,970
)
( 290,377,540
)
( 78,098,713
)
( 4,880,237
)
12,225,323
( 575,240,137
)
Administrative expenses
( 32,462,812
)
( 8,472,119
)
( 6,065,736
)
( 427,015
)
-
( 47,427,682
)
Selling expenses
( 26,539,048
)
( 33,905,257
)
( 15,936,033
)
( 859,440
)
-
( 77,239,778
)
Other operating results
586,815
( 752,088
)
980,678
( 14
)
-
815,391
Reversal of Impairment of PPE
39,625,359 - - - - 39,625,359
Operating profit
220,452,742
223,155,450
116,615,596
75,652
-
560,299,440
Depreciation of property, plant and equipment
( 85,480,973
)
( 10,098,147
)
( 34,086,894
)
-
-
( 129,666,014
)

Natural Gas
Liquids Production


Transportation
and Commercialization
Midstream
Telecommunications
Total
Identifiable assets
1,678,594,812
513,073,552
1,167,522,068
35,407,828
3,394,598,260
Identifiable liabilities
629,426,008
65,330,564
463,516,589
2,812,920
1,161,086,081

Year ended December 31, 2023
Natural Gas Liquids Production

Transportation
and Commercialization
Midstream
Telecommunications
Eliminations
Total
Revenues
215,700,088
577,973,122
186,437,633
5,941,925
-
986,052,768
Intersegment revenues
6,117,255
-
-
-
( 6,117,255
)
-
Cost of sales
( 197,658,280
)
( 352,652,516
)
( 71,002,883
)
( 4,876,237
)
6,117,255
( 620,072,661
)
Administrative expenses
( 31,810,591
)
( 6,979,268
)
( 5,383,104
)
( 349,366
)
-
( 44,522,329
)
Selling expenses
( 17,217,181
)
( 31,410,441
)
( 16,731,790
)
( 888,410
)
-
( 66,247,822
)
Other operating results
( 1,771,180
)
( 168,743
)
287,561
-
-
( 1,652,362
)
Operating (loss) / profit
( 26,639,889
)
186,762,154
93,607,417
( 172,088
)
-
253,557,594
Depreciation of property, plant and equipment
( 88,314,370
)
( 9,805,661
)
( 33,905,018
)
-
-
( 132,025,049
)


Natural Gas
Liquids Production


Transportation
and Commercialization
Midstream
Telecommunications
Total
Identifiable assets
1,444,330,728
725,696,633
1,094,667,183
57,923,024
3,322,617,568
Identifiable liabilities
709,021,719
51,099,211
651,222,230
47,925,724
1,459,268,884

F-34
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Year ended December 31, 2022
Natural Gas
Liquids Production


Transportation
and Commercialization
Midstream
Telecommunications
Eliminations
Total
Revenues
275,616,557
706,714,914
127,129,881
6,234,847
-
1,115,696,199
Intersegment revenues
7,898,618
-
-
-
( 7,898,618
)
-
Cost of sales
( 199,080,020
)
( 398,638,883
)
( 57,014,540
)
( 4,454,311
)
7,898,618
( 651,289,136
)
Administrative expenses
( 28,690,508
)
( 5,623,469
)
( 4,253,540
)
( 455,168
)
-
( 39,022,685
)
Selling expenses
( 20,474,511
)
( 38,911,133
)
( 9,065,317
)
( 742,955
)
-
( 69,193,916
)
Other operating results
( 1,223,026
)
257,283
446,984
-
-
( 518,759
)
Operating profit
34,047,110
263,798,712
57,243,468
582,413
-
355,671,703
Depreciation of property, plant and equipment
( 97,552,517
)
( 8,873,439
)
( 26,302,693
)
-
-
( 132,728,649
)

Natural Gas
Liquids Production


Transportation
and Commercialization
Midstream
Telecommunications
Total
Identifiable assets
1,521,667,971
540,912,935
697,580,135
34,370,600
2,794,531,641
Identifiable liabilities
465,485,775
53,855,153
432,437,294
30,618,450
982,396,672

8.
DETAIL OF SIGNIFICANT STATEMENT OF FINANCIAL POSITION AND STATEMENT OF COMPREHENSIVE INCOME CAPTIONS

8.a)
Other receivables

2024
2023
Current
Non Current
Current
Non Current
Turnover tax balance
106,029
-
221,537
-
VAT credit balance
1,602,417
-
3,237,694
-
Income tax credit balance (1)
400,533
-
16,270,765
-
Other tax receivables
611,381
-
566,810
-
Prepaid expenses
6,500,659
15,505
1,731,443
46,834
Advances to suppliers (2)
30,459,892
-
46,973,925
-
Subsidies receivables
10,881,706 - 10,182,355 -
Deposits in guarantee
189,475
-
421,164
-
Other Receivables UT
74,681
-
95,200
-
Others
980,868
421,894
1,415,139
31,546
Total
51,807,641
437,399
81,116,032
78,380

(1)
Provisions, net of advances paid, withholdings and perceptions
(2)
A s of December 31, 2024, it includes Ps. 2,120,362 corresponding to Other current credits with SACDE Sociedad Argentina de Diseño y Desarrollo Estratégico S.A..

8.b)
Trade receivables

2024
2023
Current
Current
Third parties
142,860,672
96,720,799
Natural Gas Transportation
62,947,107
33,748,153
Liquids Production and Commercialization
45,620,911
34,435,457
Midstream
34,292,654
28,537,189
Related parties (Note 21)
13,457,571
14,563,457
Natural Gas Transportation
2,253,965
578,566
Liquids Production and Commercialization
2,377,690
1,407,443
Midstream
8,825,916
12,577,448
Allowance for doubtful accounts
( 301,770
)
( 657,145
)
Total
156,016,473
110,627,111

F-35
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
The movement of the allowance for doubtful accounts is as follows:

Balances as of 12/31/2021
1,750,545
Inflation adjustment restatement
( 851,876 )
Additions
-
Applications
-
Reversals
-
Balances as of 12/31/2022
898,669
Inflation adjustment restatement
( 610,087
)
Additions (1)
371,535
Applications
( 2,972
)
Reversals
-
Balances as of 12/31/2023
657,145
Inflation adjustment restatement
( 355,375 )
Additions -
Applications
-
Reversals
-
Balances as of 12/31/2024
301,770
(1) Included in “Selling expenses”.

8.c)
Cash and cash equivalents

2024
2023
Cash and banks
41,858,829
5,817,494
UT Cash and banks
234
536
Mutual funds in local currency
17,716,933
4,472,447
Interest-bearing accounts
397,688
4,079,845
UT Mutual funds
-
333
Total
59,973,684
14,370,655

8.d)
Contract liabilities

2024
2023
Current
Non Current
Current
Non Current
Natural Gas Transportation
2,447,291
35,128,670
2,447,291
37,576,135
Liquids Production and Commercialization
715,353
-
3,066,702
715,354
Midstream
4,289,078
76,587,398
4,297,985
81,068,978
UT
10,931
-
23,804
-
Total
7,462,653
111,716,068
9,835,782
119,360,467

During 2024, 2023 and 2022 financial years, the Company recognized Ps. 8,153,926 , Ps. 8,899,978 and Ps. 3,187,073 , respectively, in revenues for sales from contracts with clients in the Statement of Comprehensive Income, which had been included in the balance at the beginning of each year.

Revenues related to the contract liabilities will be recognized in the Statement of Comprehensive Income in accordance with the schedule stipulated with the customers for the provision of the service, which will be completed between 2025 and 2053.

8.e)
Other payables


2024
2023
Current
Current
Payable for compensation for the Board of Directors and Supervisory Committee
237,877
153,236
Others
6,106
8,724
Total
243,983
161,960


F-36
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
8.f)
Taxes payables

2024
2023
Current
Non Current
Current
Non Current
Health and safety tax
281,540
-
360,972
-
Withholdings and perceptions made to third parties
6,046,066
-
2,495,166
-
Turnover Tax
2,034,696
-
1,353,434
-
Tax on exports
1,941,642
-
759,762
-
Others
469,645
-
557,755
204,959
Total
10,773,589
-
5,527,089
204,959

8.g)
Trade payables

2024
2023
Current
Current
Suppliers
54,095,738
75,957,192
UT Suppliers
1,076,774
887,330
Customers (credit balances)
59,281
53,722
Related companies (Note 21)
21,490,731
13,959,705
Total
76,722,524
90,857,949

8.h)
Revenues

2024
2023
2022
Sales of goods and services
1,206,612,985
967,498,077
1,079,018,197
Government grants
13,153,302
18,554,691
36,678,002
Total
1,219,766,287
986,052,768
1,115,696,199

Disaggregation of revenues of goods and services

Below is a table in which revenues are disaggregated considering the type of market and the opportunity to satisfy performance obligations:

Year ended December 31, 2024
Liquids Production
Natural Gas
and


Transportation
Commercialization
Midstream
Telecommunications
Total
Primary geographical market
External Market
-
284,586,265
-
-
284,586,265
Local Market
441,126,075
258,922,887
215,735,400
6,242,358
922,026,720
Total
441,126,075
543,509,152
215,735,400
6,242,358
1,206,612,985
Timing of revenue recognition:
Over the time
441,126,075
29,669,142
215,735,400
6,242,358
692,772,975
At a point in time
-
513,840,010
-
-
513,840,010
Total
441,126,075
543,509,152
215,735,400
6,242,358
1,206,612,985

Year ended December 31, 2023
Liquids Production
Natural Gas
and


Transportation
Commercialization
Midstream
Telecommunications
Total
Primary geographical market
External market
-
207,725,378
-
-
207,725,378
Local market
215,700,088
351,693,053
186,437,633
5,941,925
759,772,699
Total
215,700,088
559,418,431
186,437,633
5,941,925
967,498,077
Timing of revenue recognition:
Over the time
215,700,088
32,098,542
186,437,633
5,941,925
440,178,188
At a point in time
-
527,319,889
-
-
527,319,889
Total
215,700,088
559,418,431
186,437,633
5,941,925
967,498,077

F-37
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Year ended December 31, 2022
Liquids Production
Natural Gas
and


Transportation
Commercialization
Midstream
Telecommunications
Total
Primary geographical market
External market
-
314,068,033
-
-
314,068,033
Local market
275,616,557
355,968,879
127,129,881
6,234,847
764,950,164
Total
275,616,557
670,036,912
127,129,881
6,234,847
1,079,018,197
Timing of revenue recognition:
Over the time
275,616,557
30,543,960
127,129,881
6,234,847
439,525,245
At a point in time
-
639,492,952
-
-
639,492,952
Total
275,616,557
670,036,912
127,129,881
6,234,847
1,079,018,197

Detailed information of revenues on each business segment for the years ended December 31, 2024, 2023 and 2022 is disclosed below:

➢
Natural Gas Transportation:

2024
2023
2022
Firm
369,712,035
176,352,490
230,458,685
Access and Charge
15,568,955
7,066,728
9,561,067
Interruptible and others
55,845,085
32,280,870
35,596,805
Total
441,126,075
215,700,088
275,616,557

➢
Liquids Production and Commercialization:

2024
2023
2022
Product
513,532,103
527,319,889
639,492,952
Services
29,977,049
32,098,542
30,543,960
Total
543,509,152
559,418,431
670,036,912

➢
Midstream:

2024
2023
2022
Conditioning and treatment
32,966,004
33,996,907
40,291,221
Operation and maintenance
7,535,586
6,129,280
3,057,292
Steam sales
2,321,581
2,306,975
2,527,935
Construction
-
731,120
16,025
UT Construction -
52,520 295,240
Transportation and conditioning of Natural Gas 167,010,774
136,147,207 79,458,971
Others 5,901,455
7,073,624 1,483,197
Total 215,735,400
186,437,633 127,129,881

8.i)
Net cost of sales

2024
2023
2022
Inventories at the beginning of the year
16,700,896
12,433,865
15,449,955
Purchases
201,215,421
291,751,438
326,382,064
Operating expenses (Note 8.j.)
360,988,524
332,588,254
321,890,982
Inventories at the end of the year
( 3,664,704
)
( 16,700,896
)
( 12,433,865
)
Total
575,240,137
620,072,661
651,289,136

F-38
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
8.j)
Expenses by nature – Information required under art. 64 paragraph I, clause B) Commercial Companies Law for the years ended December 31, 2024, 2023 and 2022

2024
Operating expenses
Accounts
Total
Regulated
activities
Non-regulated
activities
Administrative
expenses
Selling
expenses
Financial
expenses
Salaries, wages and other compensations
104,700,571
43,704,634
36,297,210
19,225,121
5,473,606
-
Social security taxes
17,891,233
7,297,207
6,424,722
3,146,337
1,022,967
-
Compensation to Directors and Supervisory Committee
870,724
-
-
870,724
-
-
Professional services fees
21,736,846
2,235,743
2,453,653
14,621,232
2,426,218
-
Technical operator assistance fees
26,405,660
10,027,335
16,378,325
-
-
-
Materials
18,419,298
6,385,319
12,026,592
-
7,387
-
Third parties services
11,300,606
4,285,078
6,231,082
784,446
-
-
Telecommunications and post expenses
926,278
246,251
328,570
308,457
43,000
-
Rents
3,658,382
464,134
3,089,368
95,646
9,234
-
Transports and freight
4,923,703
2,854,337
1,978,635
90,731
-
-
Easements
1,198,369
1,198,369
-
-
-
-
Offices supplies
351,057
134,685
65,222
132,580
18,570
-
Travel expenses
2,829,403
1,186,035
447,228
1,091,560
104,580
-
Insurance
3,636,825
1,958,089
1,664,758
-
13,978
-
Property, plant and equipment maintenance
54,502,994
39,301,897
13,439,683
1,761,264
150
-
Depreciation of property, plant and equipment
129,666,014
81,833,041
43,825,468
4,007,505
-
-
Taxes and contributions
76,235,531
10,013,006
344,159
113,762
65,764,604
(1)
-
Advertising
2,199,517
-
116
-
2,199,401
-
Banks expenses
1,151,980
-
-
1,151,980
-
-
Interests expenses
55,710,108
-
-
-
-
55,710,108
Foreign exchange loss
151,769,496
-
-
-
-
151,769,496
Other expenses
3,050,993
983,811
1,884,762
26,337
156,083
-
Total 2024
693,135,588
214,108,971
146,879,553
47,427,682
77,239,778
207,479,604
(1)
Includes tax on exports for Ps. 23,126,803 for the year ended December 31, 2024.

F-39
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
2023
Operating expenses
Accounts
Total
Regulated
activities
Non-regulated
activities
Administrative
expenses
Selling
expenses
Financial
expenses
Salaries, wages and other compensations
101,747,855
41,314,446
34,253,912
20,934,042
5,245,455
-
Social security taxes
16,846,649
7,071,046
6,103,677
2,664,412
1,007,514
-
Compensation to Directors and Supervisory Committee
886,376
-
-
886,376
-
-
Professional services fees
16,165,302
973,987
1,736,401
9,867,393
3,587,521
-
Technical operator assistance fees
13,236,442
520,020
12,716,422
-
-
-
Materials
16,746,025
4,570,168
12,175,857
-
-
-
Third parties services
10,388,995
5,088,025
4,893,423
407,547
-
-
Telecommunications and post expenses
471,054
100,411
188,660
160,594
21,389
-
Rents
2,865,153
342,368
2,440,150
78,208
4,427
-
Transports and freight
4,895,486
3,009,188
1,815,559
70,717
22
-
Easements
1,745,754
1,745,754
-
-
-
-
Offices supplies
558,629
274,003
107,231
157,167
20,228
-
Travel expenses
2,094,139
1,065,478
498,646
444,018
85,997
-
Insurance
4,619,418
2,714,219
1,617,705
287,494
-
-
Property, plant and equipment maintenance
44,148,962
32,648,194
10,546,094
954,674
-
-
Depreciation of property, plant and equipment
132,025,049
81,879,189
43,351,103
6,794,757
-
-
Taxes and contributions
67,640,284
13,054,980
372,968
438,809
53,773,527
(1)
-
Advertising
1,926,424
-
514
-
1,925,910
-
Doubtful accounts
371,535 - - - 371,535 -
Banks expenses
362,829
-
-
362,829
-
-
Interests expenses
53,629,953
-
-
-
-
53,629,953
Foreign exchange loss
1,043,252,045
-
-
-
-
1,043,252,045
Other expenses
3,616,045
1,286,802
2,111,654
13,292
204,297
-
Total 2023
1,540,240,403
197,658,278
134,929,976
44,522,329
66,247,822
1,096,881,998
(1)
Includes tax on exports for Ps. 17,933,982 for the year ended December 31, 2023.

F-40
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
2022
Operating expenses
Accounts
Total
Regulated
activities
Non-regulated
activities
Administrative
expenses
Selling
expenses
Financial
expenses
Salaries, wages and other compensations
90,170,902
37,867,629
30,715,209
16,538,629
5,049,435
-
Social security taxes
17,097,872
7,012,285
6,039,652
2,995,454
1,050,481
-
Compensation to Directors and Supervisory Committee
853,749
-
-
853,749
-
-
Professional services fees
11,150,476
332,096
4,073,075
6,092,554
652,751
-
Technical operator assistance fees
20,799,669
1,903,579
18,896,090
-
-
-
Materials
10,814,079
3,137,530
7,668,398
-
8,151
-
Third parties services
10,602,306
4,607,680
4,670,503
1,324,123
-
-
Telecommunications and post expenses
572,636
109,370
180,539
250,441
32,286
-
Rents
739,033
119,208
547,747
65,460
6,618
-
Transports and freight
4,162,758
2,367,578
1,711,315
81,328
2,537
-
Easements
1,362,741
1,062,811
299,930
-
-
-
Offices supplies
318,342
125,780
65,087
122,037
5,438
-
Travel expenses
1,343,232
693,987
237,963
313,495
97,787
-
Insurance
4,663,808
2,705,497
1,609,012
349,299
-
-
Property, plant and equipment maintenance
43,835,696
34,660,631
8,641,429
533,636
-
-
Depreciation of property, plant and equipment
132,728,649
89,416,777
35,176,127
8,135,745
-
-
Taxes and contributions
73,631,657
12,114,336
412,882
200,789
60,903,650
(1)
-
Advertising
1,282,288
-
-
-
1,282,288
-
Banks expenses
673,698
-
-
673,698
-
-
Interests expenses
46,102,674
-
-
-
-
46,102,674
Foreign exchange loss
353,347,594
-
-
-
-
353,347,594
Costs of services rendered to third parties
331,756
-
331,756
-
-
-
Other expenses
2,972,236
843,242
1,534,252
492,248
102,494
-
Total 2022
829,557,851
199,080,016
122,810,966
39,022,685
69,193,916
399,450,268
(1)
Includes tax on exports for Ps. 24,815,929 for the year ended December 31, 2022 .

F-41
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
8.k)
Net financial results

2024
2023
2022
Financial income
Interest income
23,244,613
52,676,148
12,439,671
Foreign exchange gain
92,950,818
588,431,900
189,485,882
Subtotal
116,195,431
641,108,048
201,925,553
Financial expenses
Interest expense (1)
( 55,710,108
)
( 53,629,953
)
( 46,102,674
)
Foreign exchange loss
( 151,769,496
)
( 1,043,252,045
)
( 353,347,594
)
Subtotal
( 207,479,604
)
( 1,096,881,998
)
( 399,450,268
)
Other financial results
Notes repurchase results
-
-
( 6,985,912
)
Derivative financial instruments result
-
-
( 865,194
)
Fair value gains on financial instruments through profit or loss
179,618,396
426,400,494
163,619,184
Others
( 17,367,234
)
( 6,035,045
)
( 5,225,493
)
Subtotal
162,251,162
420,365,449
150,542,585
(Loss) / Gain on net monetary position
( 49,407,255
)
( 123,081,449
)
25,553,954
Total
21,559,734
( 158,489,950
)
( 21,428,176
)
(1)
It includes Ps. 1,409,123 , Ps. 2,077,850 and Ps. 2,594,867 of accrued interest corresponding to leasing liabilities, for the years ended December 31, 2024, 2023 and 2022, respectively.

In accordance with IAS 29, the Company has opted to present the (loss) / gain on net monetary position included in the financial results, and in a single line. The presentation made by the Company implies that the nominal magnitudes of the financial results have been restated by inflation. This means that the real magnitudes of the financial results are different from the components of the financial results previously presented.

8.l)
Other operating results, net

2024
2023
2022
Result from disposal of Property, plant and equipment
( 1,849,859
)
-
-
Reversal / (Charge) for provisions (1) 1,162,562 ( 1,526,033 ) ( 2,420,188 )
Recovery of insurance
1,153,314
48,063
196,658
Recovery of expenses
1,154,948 - -
Derecognition of tax credits
( 729,560 ) - -
Others
( 76,014
)
( 174,392
)
1,704,771
Total
815,391
( 1,652,362
)
( 518,759
)
(1)
Including legal expenses.

8.m)
Financial assets at amortized cost

2024
2023
Current
Non Current
Current
Non Current
Fixed term deposits in foreign currency
240,634,495
-
220,547,716
173,678,840
Other time deposits
30,975,000 - 8,817,393 59,744,235
Total
271,609,495
-
229,365,109
233,423,075

F-42
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
8.n)
Financial assets at fair value through profit or loss

2024
2023
Current
Current
Corporate bonds with related parties
20,471,497
21,739,106
Corporate bonds 197,191,523 226,263,421
Public debt bonds 201,860,331 182,456,539
Equity instruments
45,432,098 43,258,091
Total
464,955,449
473,717,157

8.o)
Payroll and social security taxes payable

2024
2023
Current
Current
Vacation benefit payable
8,964,896
8,016,798
Annual bonus payable
7,055,433
2,717,233
Social security taxes payable
3,402,055
2,808,103
UT
25,916
14,271
Total
19,448,300
13,556,405

9.
INVESTMENTS IN ASSOCIATES

2024
2023
Description of securities
Face Book
Book
Name and issuer
value
Amount
value
value
Transporte y Servicios de Gas en Uruguay S.A. (Liquidated)
-
-
-
58,271
Gas Link S.A.
$
1
502,962
1,225,330
923,259
Total
1,225,330
981,530

F-43
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
10.
JOINT ARRANGEMENTS

tgs jointly with SACDE applied for the public tender launched by the Argentine Government for the construction of a connection pipeline in the province of Santa Fe. This tender was finally obtained by the UT whose sole purpose is the execution of such works. For further information, see Note 23.

The Company participates in the UT in a percentage of 51 % on the rights of the assets and on the obligations related to them. tgs consolidates line by line assets, liabilities and results of the UT based on the aforementioned percentage of participation.

The breakdown of the amounts included in the Statements of Financial Position related to the Company’s participation in the UT as of December 31, 2024 and 2023 and its results as of December 31, 2024, 2023 and 2022 is the following:

2024
2023
Consolidated Statements of Financial Position
Non current assets
-
-
Current assets
198,003
134,489
Total assets
198,003
134,489
Non current liabilities
-
-
Current liabilities
2,179,448
920,787
Total liabilities
2,179,448
920,787

2024
2023
2022
Consolidated Statements of Comprehensive Income
Gross (loss) / profit
( 508,855
)
( 223,735
)
183
Operating loss
( 567,997
)
( 319,427
)
( 53,261
)
Net Financial results
909,676
1,412,887
957,117
Comprehensive income
341,679
1,093,460
903,856

11.
SHARE OF PROFIT / (LOSS) FROM ASSOCIATES


2024
2023
2022
EGS (liquidated)
-
( 4,747
)
( 2,929
)
TGU (liquidated)
( 58,271
)
( 33,290
)
( 39,583
)
Link
302,071
( 28,161
)
653,768
Total
243,800
( 66,198
)
611,256

F-44
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
12.
PROPERTY, PLANT AND EQUIPMENT

2024
Cost
Depreciations
Accumulated at
Accumulated at
Reversal of
Impairment of
Beginning
End of
the beginning the end Property, plant
Net
Account
of the year
Additions
Retirements
Transfers
the year
of the year
Retirements
For the year
Rate %
of the year
and equipment
book value
Pipelines
1,836,590,008
85,361
( 3,946,357
)
17,146,697
1,849,875,709
1,072,168,848
( 2,742,434
)
41,861,483
2.2
1,111,287,897
( 30,114,007 )
768,701,819
Compressor plants
839,471,416
65,727
( 5,388,897
)
28,254,459
862,402,705
610,257,455
( 4,970,944
)
29,347,722
3.3 a 25
634,634,233
( 9,045,134 )
236,813,606
Other plants
719,010
-
-
268,935
987,945
354,713
-
23,323
3.3
378,036
( 14,495 )
624,404
Stations of regulation and/or
measurement of pressure
67,687,769
-
( 498,508
)
2,903,203
70,092,464
54,302,845
( 352,114
)
1,721,364
4.0
55,672,095
( 403,516 )
14,823,885
Other technical installations
17,362,385
-
-
2,273,249
19,635,634
11,501,797
-
589,893
6.7
12,091,690
( 48,207 )
7,592,151
Subtotal assets related to
natural gas transportation service
2,761,830,588
151,088
( 9,833,762
)
50,846,543
2,802,994,457
1,748,585,658
( 8,065,492
)
73,543,785
1,814,063,951
( 39,625,359 )
1,028,555,865
Non-regulated segment Pipelines
349,751,789
-
-
965,428
350,717,217
43,237,563
-
11,597,985
2.2
54,835,548
-
295,881,669
Non-regulated segment Compressor plants
57,888,386
-
-
472
57,888,858
44,679,304
-
5,000,275
3.3 a 25
49,679,579
-
8,209,279
Non-regulated segment Other plants
632,358,027
-
( 85,724
)
199,664,695
831,936,998
327,930,210
( 29,646
)
20,902,047
3.3
348,802,611
-
483,134,387
Non-regulated segment Stations of regulation and/or measurement of pressure
19,209,854
-
-
1,280,252
20,490,106
5,061,973
-
895,157
4.0
5,957,130
-
14,532,976
Non-regulated segment Other technical installations
7,379,901
-
-
-
7,379,901
5,138,695
-
609,352
6.7
5,748,047
-
1,631,854
Subtotal assets related to Other Services and Liquids Production and Commercialization
1,066,587,957
-
( 85,724
)
201,910,847
1,268,413,080
426,047,745
( 29,646
)
39,004,816
465,022,915
-
803,390,165
Lands
11,674,415
-
-
368,294
12,042,709
-
-
-
-
-
-
12,042,709
Buildings and constructions
118,124,524
-
( 252,340
)
8,902,219
126,774,403
59,075,774
( 153,044
)
3,069,019
2.0
61,991,749
-
64,782,654
Fittings and features in building
12,923,354
-
-
( 142,173
)
12,781,181
4,437,722
-
1,119,267
4.0
5,556,989
-
7,224,192
Machinery, equipment and tools
38,898,288
2,421,222
( 3,872
)
122,248
41,437,886
31,006,795
( 3,872
)
2,785,712
6.7 a 10
33,788,635
-
7,649,251
UT Machinery, equipment and tools
24,690
-
-
-
24,690
24,690
-
-
6.7 a 10
24,690
-
-
Computers and Telecommunication systems
172,725,839
-
-
10,592,035
183,317,874
139,175,524
-
8,828,761
6.7 a 20
148,004,285
-
35,313,589
Vehicles
16,547,405
2,149,722
( 339,147
)
1,802
18,359,782
12,443,257
( 339,147
)
1,259,340
20
13,363,450
-
4,996,332
Furniture
6,564,273
432
-
66,661
6,631,366
6,234,810
-
55,314
10
6,290,124
-
341,242
Materials
109,340,367
64,990,827
( 890,117
)
( 42,464,525
)
130,976,552
-
-
-
-
-
-
130,976,552
Line pack
14,833,252
-
-
-
14,833,252
750,415
-
-
-
750,415
-
14,082,837
Works in progress
259,901,678
245,823,993
-
( 230,203,951
)
275,521,720
-
-
-
-
-
-
275,521,720
Total
4,589,976,630
315,537,284
( 11,404,962
)
-
4,894,108,952
2,427,782,390
( 8,591,201
)
129,666,014
2,548,857,203
( 39,625,359 )
2,384,877,108

F-45
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
2023
Cost
Depreciations
Accumulated at
Accumulated at
Beginning End of
the beginning the end Net book
Account
of the year
Additions
Retirements
Transfers
the year
of the year
Retirements
For the year
Rate %
of the year
value
Pipelines
1,827,081,993
-
-
9,508,015
1,836,590,008
1,026,717,696
-
45,451,152
2.2
1,072,168,848
764,421,160
Compressor plants
820,374,857
-
-
19,096,559
839,471,416
582,764,442
-
27,493,013
3.3 a 25
610,257,455
229,213,961
Other plants
719,010
-
-
-
719,010
334,997
-
19,716
3.3
354,713
364,297
Stations of regulation and/or
measurement of pressure
65,565,183
-
-
2,122,586
67,687,769
52,549,994
-
1,752,851
4.0
54,302,845
13,384,924
Other technical installations
16,171,518
-
-
1,190,867
17,362,385
10,954,531
-
547,266
6.7
11,501,797
5,860,588
Subtotal assets related to natural gas transportation service
2,729,912,561
-
-
31,918,027
2,761,830,588
1,673,321,660
-
75,263,998
1,748,585,658
1,013,244,930
Non-regulated segment Pipelines
296,385,707
-
-
53,366,082
349,751,789
32,744,705
-
10,492,858
2.2
43,237,563
306,514,226
Non-regulated segment Compressor plants
57,604,588
- -
283,798
57,888,386
39,605,832
-
5,073,472
3.3 a 25
44,679,304
13,209,082
Non-regulated segment Other plants
582,138,862
-
-
50,219,165
632,358,027
307,467,082
-
20,463,128
3.3
327,930,210
304,427,817
Non-regulated segment Stations of regulation and/or measurement of pressure
19,209,817
-
-
37
19,209,854
3,361,507
-
1,700,466
4.0
5,061,973
14,147,881
Non-regulated segment Other technical installations
7,379,901
-
-
-
7,379,901
4,529,342
-
609,353
6.7
5,138,695
2,241,206
Subtotal assets related to Other Services and Production and Commercialization of Liquids
962,718,875
-
-
103,869,082
1,066,587,957
387,708,468
-
38,339,277
426,047,745
640,540,212
Lands
9,612,991 423,659
-
1,637,765
11,674,415
-
-
-
-
-
11,674,415
Buildings and constructions
108,345,818
3,949,666
-
5,829,040
118,124,524
55,581,436
-
3,494,338
2.0
59,075,774
59,048,750
Facilities and features in building
7,988,615
-
-
4,934,739
12,923,354
3,809,981 -
627,741
4.0
4,437,722
8,485,632
Machinery, equipment and tools
38,103,553
444,088
( 2,659 )
353,306
38,898,288
27,227,812
( 2,659 )
3,781,642
6.7 a 10
31,006,795
7,891,493
UT Machinery, equipment and tools
24,690
-
-
-
24,690
24,690
-
-
6.7 a 10
24,690
-
Computers and Telecommunication systems
164,981,234
54,245
-
7,690,360
172,725,839
129,910,958
-
9,264,566
6.7 a 20
139,175,524
33,550,315
Vehicles
16,146,282
2,080,133
( 1,679,010
)
-
16,547,405
12,910,917
( 1,665,713 )
1,198,053
20.0
12,443,257
4,104,148
Furniture
6,530,030
21,258
-
12,985
6,564,273
6,179,376
-
55,434 10.0
6,234,810
329,463
Materials
113,436,618
33,079,345
( 2,404,812
)
( 34,770,784
)
109,340,367
-
-
-
-
-
109,340,367
Line pack
14,464,567
-
-
368,685
14,833,252
750,415
- -
-
750,415
14,082,837
Works in progress
122,121,964
259,622,919
-
( 121,843,205
)
259,901,678
-
-
-
-
-
259,901,678
Total
4,294,387,798
299,675,313
( 4,086,481
)
-
4,589,976,630
2,297,425,713
( 1,668,372 )
132,025,049
2,427,782,390
2,162,194,240

F-46
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
The following is the composition of the resulting net value of Property, plant and equipment as of December 31, 2024 and 2023:

2024
2023
Cost
4,894,108,952
4,589,976,630
Accumulated depreciation
( 2,548,857,203
)
( 2,427,782,390
)
Reversal of Impairment
39,625,359 -
Total
2,384,877,108
2,162,194,240

As of December 31, 2024 and 2023, Property, plant and equipment contains the following assets for right of use:

2024
2023
Other plants
3,042,284
4,867,655
Compressor plants
7,553,175
12,085,080
Other technical installations
858,857
1,374,171
Buildings
2,369,800 3,159,733
Total
13,824,116
21,486,639

The depreciations recorded in the years 2024, 2023 and 2022 of the right-of-use assets correspond to the following:

2024
2023
2022
Other plants
( 1,825,371
)
( 1,825,371
)
( 1,825,371 )
Compressor plants
( 4,531,905
)
( 4,531,905
)
( 4,531,905 )
Other technical installations
( 515,314
)
( 515,314
)
( 515,314 )
Buildings
( 789,933 ) ( 789,933 ) -
Total
( 7,662,523
)
( 7,662,523
)
( 6,872,590 )

The right to use these assets expires in September 2026 and December 2027.

13.
LOANS

Short-term and long-term loans as of December 31, 2024 and 2023 comprise the following:

2024
2023
Current Loans
2031 Notes Interest
18,625,880 -
2018 Notes Interest
-
9,315,114
Bank loans
51,962,324 108,870,337
Leases liabilities
7,808,178
13,707,861
Total Current Loans
78,396,382
131,893,312
Non Current Loans
2018 Notes (1)
-
827,993,739
2031 Notes
495,544,257 -
Leases liabilities
6,168,992
23,782,860
Bank loans
- 43,408,897
Total Non Current Loans
501,713,249
895,185,496
Total Loans (2)
580,109,631
1,027,078,808
(1)
As of December 31, 2023, it is net of Notes repurchase of Ps 52,244,896 .
(2)
Net of issuance expenses and issue price of Ps. 10,135,743 and Ps. 114,727 as of December 31, 2024 and 2023, respectively.

F-47
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Loans are totally denominated in US dollars.

The activity of the loans as of December 31, 2024, 2023, and 2022 is the following:

2024
2023
2022
Leases
liabilities
Other
payables
Leases
liabilities
Other
payables
Leases
liabilities
Other
payables
Beginning balance
37,490,721
989,588,087
28,903,470
612,705,331
39,926,066 654,624,186
Inflation adjustment restatement
( 21,235,264
)
( 560,996,531
)
( 38,288,281
)
( 577,984,887
)
( 32,346,531 ) ( 397,692,741 )
Accrued interest
1,409,124
47,625,530
1,998,012
15,064,696
2,594,867 39,845,742
Effect of foreign exchange difference
6,047,022
152,533,619
48,973,768
920,060,701
27,164,425 323,176,146
VAT unpaid installments
-
-
-
-
157,206 -
Proceeds from loans
- 585,355,570 3,918,826 77,837,122 - 41,805,876
Acquisition of notes result
-
-
-
-
- 6,985,912
Payment of loans (1)
( 8,253,527
)
( 615,942,992
)
( 6,280,876
)
( 23,716,258
)
( 6,113,542 ) ( 584,462 )
Acquisition of notes
- - - - - ( 16,631,309 )
Interest paid (2)
( 1,480,906
)
( 32,030,822
)
( 1,734,198
)
( 34,378,618
)
( 2,479,021 ) ( 38,824,019 )
Ending balance
13,977,170
566,132,461
37,490,721
989,588,087
28,903,470 612,705,331
(1)
For the years ended December 31, 2024, 2023 and 2022, Ps. 7,492,491 , Ps. 5,844,723 and Ps. 6,113,542 respectively, were cancelled through the offsetting debit balances maintained with the creditor (Pampa Energía).
(2)
For the years ended December 31, 2024, 2023 and 2022, Ps. 1,449,607 , Ps. 1,734,198 and Ps. 2,479,021 respectively, were cancelled through the offsetting debit balances maintained with the creditor (Pampa Energía).

During the year ended December 31, 2024, the Company incurred new bank loans of Ps. 65,800,369 . Additionally, bank loans repayments were made for Ps. 106,597,626 .

The maturities of current and non-current financial debt, net of issuance expenses, as of December 31, 2024 are as follows:

To due
Due
As of
12/31/2025
From
1/01/2026 to
12/31/2026
From
01/01/2027 to
12/31/2027
From
1/01/2028 to
12/31/2028
From
01/01/2029
onwards
Total
2031 Notes - - - - - 495,544,257 495,544,257
2031 Notes interests
-
18,625,880
-
-
-
-
18,625,880
Lease liabilities
-
7,808,178
5,295,024
873,968
-
-
13,977,170
Bank loans
- 51,962,324 - - - - 51,962,324
Total
-
78,396,382
5,295,024
873,968
-
495,544,257
580,109,631

Description of the Company’s indebtedness as of December 31, 2024

Class 3 Notes (“2031 Notes”)

General description

On October 11, 2023, CNV approved the extension of the maximum amount of the Global Notes Program from US$ 1,200 million to US$ 2,000 million and the extension of the validity period of the Program for an additional 5 years from the expiration of the term, with the new expiration of the Program being January 3, 2029.

On July 24, 2024, within the framework of the 2024 Program, the Company issued the 2031 Notes in accordance with the following characteristics:

F-48
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
2031 Notes
Amount in US$
490,000,000
Interest rate
8.50 %
Issuance price
98.712 %

Scheduled
Repayment Date
Percentage of
Original
Principal
Amount Payable
Amortization
July 24, 2031
100 %
Interest payment frequency
Semiannual, payable on January 24 and July 24 of each year .
Guarantor
-


The net proceeds from the 2031 Notes were US$ 483,688,800 . The Company used the net proceeds received to make a purchase and redemption of the 2018 Notes.

Covenants

As of December 31, 2024, the Company has complied with a series of restrictions derived from its current financial agreements, which include, among others, those related to obtaining new loans, payment of dividends, granting of guarantees, disposal of certain assets and transactions with related parties.

The Company may contract new debts under the following conditions, among others:

a. To the extent that after contracting the new debt (i) the consolidated coverage ratio (ratio between consolidated EBITDA (consolidated income before financial results, income tax, depreciation and amortization) and consolidated interest) is equal to or greater than 2.0 :1; and (ii) the consolidated debt ratio (ratio between consolidated debts and consolidated EBITDA) is equal to or less than 3.50 :1.

b. For the refinancing of outstanding financial debt.

c. Originated by customer advances.

The Company may pay dividends under the following conditions: (i) the Company is not in default under 2031 Notes, and (ii) immediately after any dividend payment, the Company may incur new debts according to the provisions in point a. of the preceding paragraph.

Bank loans

The following table shows the details of other financial indebtedness as of December 31, 2024:

Currency
Amount
Interest rate
Expiration date
USD
25,422,559
5.97
%
Between January and May 2025

All of these loans are guaranteed by time deposits included as “Financial Assets at Current and Non-Current Amortized Cost.”

F-49
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
In March 2022, the subsidiary Telcosur received a loan of US $ 24 million . During the first quarter of 2023, Telcosur managed the extension of the loan’s maturity date. As of December 31, 2024, the main terms of this loan were:
Amount in US $
24,000,000
Interest rate
1.5 % annual
Amortization date
January 27, 2025
Interest payment frequency
To the expiration
Guarantee
Fixed term in foreign currency (1)
(1)
Included as “Non-current financial assets measured at amortized cost”.

Additionally, on January 23, 2025, Telcosur extended the loan’s maturity date to July 28, 2025.

Lease liability

It corresponds to the financing obtained for the acquisition of the assets corresponding to the treatment and compression plant located in the Río Neuquén area. Said agreement was entered into on August 11, 2016, with Petrobras (currently Pampa Energía) and consists of the payment of 119 consecutive monthly installments of US$ 623,457 without taxes and a purchase option for the same amount payable at the end of the 120 th month of validity of the agreement. contract.

In January 2023, the Company entered into a new lease liability for Ps. 3,918,826 . It is denominated in US dollars, payable in fixed monthly installments until December 2027.

The following table sets reconciliation between the total of future minimum lease payments as of December 31, 2024, and their present book value:

12/31/2024
As of 12/31/2025
8,496,476
From 1/01/2026 to 12/31/2026
5,432,723
From 1/01/2027 to 12/31/2027
866,831
From 1/01/2028 to 12/31/2028
-
From 1/01/2029 onwards
-
Total minimum future payments
14,796,030
Future financial charges on financial leases
( 818,860
)
Book Value financial leases
13,977,170

14.
INCOME TAX AND DEFERRED TAX

Tax adjustment for inflation

Law No. 27,468 establishes that in the net taxable income of the periods beginning on or after January 1, 2018, the adjustment for inflation obtained by the application of the income tax law may be deducted or incorporated into the tax result for the fiscal year. This adjustment will proceed only if the percentage variation in the IPC, will accumulate (a) a percentage higher than 100% in the 36 months prior to the end of the year, or (b) regarding the first, second and third fiscal year that starts from its effective date, an accumulated variation of the IPC that exceeds 55%, 30% or 15% of said 100%, respectively.

For the fiscal years ended December 31, 2024, 2023 and 2022, the CPI has exceeded the 100% threshold mentioned above, so the Company has measured the tax charge to earnings for the years ended December 31, 2024, 2023 and 2022 considering the application of the adjustment for fiscal inflation.

F-50
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
According to the Solidarity Law, the positive or negative result generated by the application of the inflation adjustment corresponding to the first and second fiscal year beginning on January 1, 2019 will be charged in a sixth in that fiscal period and the five sixths remaining in equal parts in the following 5 fiscal periods. As of January 1, 2021, 100 % of the adjustment may be deducted/taxed in the year in which the effect is determined.

On November 16, 2022, the Senate of the Nation approved the 2023 budget bill under Law No. 27,701, which already had half a sanction from the Chamber of Deputies.

The 2023 budget law incorporates article 195 to the income tax law establishing that in the event that the adjustment for tax inflation is applicable and a positive adjustment (profits) arises from it, the first and second fiscal years starting on 1 January 2022 inclusive, they may allocate 1/3 in that fiscal period and the remaining 2/3, in equal parts, in the 2 immediately following fiscal periods. For the deferral to be appropriate, it will be necessary for companies to make an investment in the purchase, construction, manufacture, processing or definitive import of fixed assets (except automobiles), during each of the 2 fiscal periods immediately following that of the calculation of the first third of the period in question, for an amount equal to or greater than $ 30,000,000,000 .

As of December 31, 2023, the Company projected investments in PPE in accordance with the requirements mentioned above, determining that the amounts exceed what is established by law.

Adjustment of acquisitions and investments made in fiscal years beginning on or after January 1, 2018

A cost adjustment mechanism is established for assets acquired or investments made in fiscal years beginning on or after January 1, 2018. The adjustment will be made based on the percentage variations of the WPI.

Extraordinary tax RG N° 5268/2022

On August 16, 2022, RG No. 5268/2022 was published through which the AFIP ordered an extraordinary advance of income tax. The extraordinary advance payment constitutes an additional payment on account to that provided for in the general advance payment regime that can be added to the latter. For fiscal year 2022, the Company paid the AFIP Ps. 22,837,153 for this concept.

Deferred tax

The reconciliation between the charge computed for tax purposes and the income tax expense charged to the Statement of Comprehensive Income in the years ended December 31, 2024, 2023 and 2022 is as follows:

2024
2023
2022
Current income tax
( 217,437,074
)
( 3,499,977
)
( 107,535,714
)
Deferred income tax
5,497,595
( 40,287,750
)
( 8,161,524
)
Total income tax
( 211,939,479
)
( 43,787,727
)
( 115,697,238
)

F-51
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
The analysis of the net deferred tax assets and liabilities is as follows:

2024
2023
Deferred tax assets:
Deferred tax assets to be recovered after more than 12 months
20,339,104
16,174,108
Deferred tax assets to be recovered after 12 months
14,039,636
20,380,450
Deferred tax liabilities:
Deferred tax liabilities taxable after more than 12 months
( 194,491,864
)
( 205,615,679
)
Deferred tax liabilities taxable after 12 months
( 18,582,982
)
( 15,132,580
)
Deferred tax liabilities, net
( 178,696,106
)
( 184,193,701
)

The components of the net deferred tax assets and liabilities as of December 31, 2024, 2023 and 2022 is as follows:

Deferred tax assets
Account
receivables
discounted value
Provisions for
legal claims and
other provisions
Financial
leases
Contract
liabilities
Tax loss
carryforward
Tax
inflation
adjustment
Financial
assets at fair
value through
profit or loss
Other
receivables
Total
As of December 31, 2021
12,045 6,835,454 13,615,858 18,646,374 22,361,001 198,204 - - 61,668,936
Charge in results
( 12,045 ) ( 2,482,298 ) ( 3,816,850 ) 45,870 ( 22,361,001 ) ( 113,024 ) 1,245,153 - ( 27,494,195 )
As of December 31, 2022
-
4,353,156
9,799,008
18,692,244
-
85,180
1,245,153
-
34,174,741
Charge in results
-
( 2,467,073
)
2,857,911
( 13,500,909
)
3,056,151
( 68,680
)
4,681,942
7,820,475
2,379,817
As of December 31, 2023
-
1,886,083
12,656,919
5,191,335
3,056,151
16,500
5,927,095
7,820,475
36,554,558
Charge in results
-
( 1,542,728
)
( 7,764,910
)
14,213,337
( 3,056,151
)
( 13,913
)
1,818,259
( 5,829,712 )
( 2,175,818
)
As of December 31, 2024
-
343,355
4,892,009
19,404,672
-
2,587
7,745,354
1,990,763
34,378,740

Deferred tax liabilities
Other
receivables
Loans
Property, Plant
and Equipment
Cash and cash
equivalents
Inventories
Tax inflation
adjustment
Other
liabilities
Total
As of December 31, 2021
( 35,439 ) ( 1,108,149 ) ( 145,155,263 ) ( 227,975 ) ( 860,164 ) ( 48,315,447 ) ( 1,710,927 ) ( 197,413,364 )
Charge in results
( 774,182 ) 158,846 ( 9,612,008 ) ( 2,663,576 ) 47,361 30,465,304 1,710,927 19,332,672
As of December 31, 2022
( 809,621
)
( 949,303
)
( 154,767,271
)
( 2,891,551
)
( 812,803
)
( 17,850,143
)
- ( 178,080,692 )
Charge in results
809,621
127,141
( 14,904,167
)
( 8,763,694
)
( 1,842,371
)
( 18,094,097
)
- ( 42,667,567 )
As of December 31, 2023
-
( 822,162
)
( 169,671,438
)
( 11,655,245
)
( 2,655,174
)
( 35,944,240
)
- ( 220,748,259 )
Charge in results
-
( 2,725,348
)
( 17,267,757
)
( 2,801,418
)
2,076,365
28,391,571
- 7,673,413
As of December 31, 2024
-
( 3,547,510
)
( 186,939,195
)
( 14,456,663
)
( 578,809
)
( 7,552,669
)
- ( 213,074,846 )

As of December 31, 2021, the Company had a specific tax carryforward derived from negative exchange differences for the years 2021 and 2020 generated by financial instruments traded abroad for Ps. 7,974,955 . The realization of such tax loss depended on the future generation of taxable financial gains taxed during the statute of limitations period. To determine its recoverability, the Company took into consideration the reversal of the deferred items, its tax planning and projections of future specific taxable income based on its best estimate. Based on these projections and because it was not possible to estimate as probable the generation of future specific financial gains to absorb such tax loss, no deferred tax asset of Ps. 794,334 was recognized as of December 31, 2021. During the year ended on December 31, 2022, the tax loss carryforward was totally recovered.

Below is a reconciliation between the income tax charged to results for the years ended December 31, 2024, 2023 and 2022 and that which would result from applying the current tax rate on net income before income tax for the exercise:

2024
2023
2022
Pre tax income
582,102,974
95,001,446
334,854,783
Statutory income tax rate
35
%
35
%
35
%
Pre tax loss at statutory income tax rate
( 203,736,041
)
( 33,250,506
)
( 117,199,174
)
Tax effects due to:
- Adjustment affidavit previous year
( 241,439
)
( 312,939
)
( 556,626
)
- Tax inflation adjustment and restatement by inflation
( 11,221,662 ) ( 10,064,077 ) 1,697,211
- Others
3,259,663
( 160,205
)
361,351
Total income tax
( 211,939,479
)
( 43,787,727
)
( 115,697,238
)

F-52
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
15.
EVOLUTION OF PROVISIONS

For legal claims and others
Balances as of 12/31/2021

17,117,647
Inflation adjustment restatement
( 9,803,912
)
Additions
5,457,821
(1)
Uses
( 137,309
)
Decreases
( 196,658
) (2)
Balances as of 12/31/2022
12,437,589
Inflation adjustment restatement
( 10,155,785
)
Additions
3,117,127
(3)
Uses
( 10,122
)
Decreases
-
Balances as of 12/31/2023
5,388,809
Inflation adjustment restatement
( 3,011,831 )
Additions 522,861 (4)
Uses
-
Decreases
( 2,478,744 ) (5)
Balances as of 12/31/2024 421,095
(1)
Ps. 2,420,188 are included in “Other operating results” and Ps. 3,037,633 in “Financial expenses”.
(2)
Included in “Other operating results”.
(3)
Ps. 1,526,033 are included in “Other operating results” and Ps. 1,591,094 in “Financial expenses”.
(4)
Ps. 153,154 are included in “Other operating results” and Ps. 369,707 in “Financial expenses”.
(5)
Ps. 1,315,716 are included in “Other operating results” and Ps. 1,163,128 in “Financial expenses”.

Provisions are included in current liabilities.

16.
FINANCIAL RISK MANAGEMENT

16.1 Financial risk factors

The Company’s activities and the market in which it operates expose it to a series of financial risks: market risk (including foreign exchange risk, interest rate risk, and commodity price risk), credit risk and liquidity risk.

The Company’s risk management framework establishes that a risk map is determined that measures the potential impact of each of them on the financial situation and results of operations. Based on this, the Executive Officers are responsible for defining the policies, procedures, limits and measures aimed at mitigating the impact of said risks.

The sensitivity analyzes included below are based on the change in one of the factors while all others remain constant. In practice, this is unlikely to happen, and changes in several factors can be correlated, for example, in variations in the interest rate and variations in the foreign currency exchange rate.

Sensitivity analysis only provides limited vision, at one point in time. The actual impact on the Company’s financial instruments could vary significantly with respect to the impact shown in the sensitivity analysis.

F-53
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
16.1.1 Risk associated with exchange rates

Exchange rate risk management

In view of the main impacts of the aforementioned situation and those detailed in Note 1 to these Consolidated Financial Statements, the Company has implemented a series of measures to mitigate their impact. In this sense, the Company’s Management permanently monitors the evolution of the situations that affect its business, in order to determine the possible actions to be taken and identify the eventual impacts on its equity and financial situation. The Company considers that its current financial position will allow it to comply, in the short term, with its foreign currency commitments. The Company’s financial statements should be read in light of these circumstances.

The Company is primarily exposed to the fluctuation of the exchange rate of the U.S. dollar against the Argentine Peso due to the fact that almost its entire financial indebtedness is denominated in U.S. dollars. The exposure to other currencies is not significant.

As regards to the revenue derived from the Natural Gas Transportation segment, the tariffs charged by the Company are currently denominated in Argentine pesos. On the other hand, revenues in US dollars derived from the Liquids Production and Commercialization segment accounted for approximately 87 % of the segment’s total revenues for the years ended December 31, 2024, 2023 and 2022. Total operating cost denominated in Argentine Pesos accounted for 74 %, 81 % and 83 % for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, 2023 and 2022, 44 %, 35 % and 35 % of total revenues are denominated in Argentine, respectively.

tgs’ financial risk management policies are defined with the objective of mitigating the impact of exchange rate fluctuations on the Company’s foreign currency position. To this end, alternative investment evaluations are regularly carried out to diversify tgs’ investment portfolio among instruments denominated in U.S. dollars or, although denominated in Argentine pesos, to obtain positive returns in real terms.

Additionally, if deemed appropriate, the Company enters into derivative financial instruments that allow hedging the fluctuation of the U.S. dollar on the positions in such currency in the long term.

However, the Company, in order to mitigate the impact on the future variation of the exchange rate, has placed funds in assets denominated in U.S. dollars. As of December 31, 2024, 81 % of the Company’s fund placements are denominated in U.S. dollars.

For further information regarding the Company’s foreign currency position see “Note 18. Foreign currency assets and liabilities”.

Management of the Company estimates that, based on the net asset / liability position as of December 31, 2024 and 2023, a 10 % appreciation in the exchange rate of the U.S. dollar against the Argentine peso, with all other economic-financial variables stable, could have resulted in a pre-tax income / (loss) of Ps. 10,758,875 and (Ps. 13,625,470 ), respectively. A 10 % depreciation of the U.S. dollar against the Argentine peso would have an equal and opposite effect on the Statement of Comprehensive Income. This sensitivity analysis is theoretical as the actual impacts could differ significantly and vary over time.

F-54
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
In order to mitigate the exchange rate risk, during fiscal year 2024, tgs entered into both forward purchase operations of US dollars, as well as investments in mutual funds linked to the US dollar in order to hedge exposure to the risk associated with the exchange rate that derives from its financial debt.

16.1.2 Interest rate risk

Interest rate risk management seeks to reduce financial costs and limit the Company’s exposure to increases in interest rates. tgs ’ exposure to risks associated with interest rate variations is limited given that all of its financial debt is subject to fixed interest rates. Information regarding the Company’s financing is disclosed in Note 13.

In addition, the main objective of the Company’s financial investment activities is to obtain the highest return by investing in low-risk and highly liquid instruments. The Company maintains a portfolio of cash equivalents and short-term investments comprised of investments in mutual funds and deposits in interest-bearing bank accounts, public and private securities. The risk of these instruments is low since they are mostly short-term and highly liquid in recognized financial institutions.

As a consequence of the application of IAS 29, maintaining monetary assets generates loss of purchasing power, provided that such items are not subject to an adjustment mechanism that compensates to some extent the loss of purchasing power. This loss of purchasing power is included in the result of the period under gain on the net monetary position. On the contrary, maintaining monetary liabilities generates a gain in purchasing power, which are also included in such line item.

The Company’s risk management policies are defined with the objective of reducing the impact of the loss of purchasing power. During the 2024 and 2023 fiscal years the Company has maintained an asset net monetary position. As a consequence, tgs has recorded a net gain from exposure to inflation in the monetary items. In the fiscal year 2022, the Company maintained a liability net monetary position, resulting a net gain from exposure to inflation in the monetary items.

The following table shows a breakdown of the Company’s fixed-rate and floating-rate financial assets and liabilities as of December 31, 2024 and 2023:

Financial assets
Financial liabilities
2024
2023
2024 (1)
2023 (2)
Fix interest rate
271,609,495
467,260,631
566,132,461
989,588,087
Variable interest rate
17,716,933
4,080,178
-
-
Total
289,326,428
471,340,809
566,132,461
989,588,087
(1)
Includes 2031 Notes. For further information see Note 13 to the Consolidated Financial Statements.
(2)
Includes 2018 Notes. For further information see Note 13 to the Consolidated Financial Statements.

In view of the nature of the Company’s financial assets which bear variable interest, an immediate 100 basis points decrease in the interest rate would not have a significant impact on the total value of the financial assets.

F-55
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
16.1.3 Commodity price risk

Commercial operations performed by the Company in its Liquids Production and Commercialization business segment are affected by a number of factors beyond its control, including changes in the international prices of the products sold, and government regulations on prices, taxes and other charges, among others.

The sales prices of exported propane, butane and natural gasoline are determined according to international reference prices (Mont Belvieu for propane and butane and NWE ARA for natural gasoline). Additionally, most of the total sales of propane and butane that are made in the domestic market are made at prices set by the Secretary of Energy for the different market segments.

These prices have historically fluctuated in response to macroeconomic conditions and changes in supply and demand, which could affect tgs’ profitability.

Based on volume of sales for the years ended December 31, 2024, 2023 and 2022, tgs estimated that, other factors being constant, a decrease of US$ 50 per ton in the international price of LPG and natural gasoline, respectively, would have decrease the Company’s net comprehensive income in its Liquids Production and Commercialization segment in Ps. 19,611,268 , Ps. 29,490,323 and Ps. 21,749,155 , respectively. On the other hand, an increase of US$ 50 per ton in the international price would have had the opposite effect.

16.1.4 Credit risk

The Company’s exposures to credit risk takes the form of a loss that would be recognized if counterparties failed to, or were unable to, meet their payment obligations. These risks may arise in certain agreements in relation to amounts owed for physical product sales, the use of derivative instruments, and the investment of surplus cash balances. This risk mainly results from economic and financial factors or from a possible default of counterparty.

The Company is subject to credit risk arising from outstanding receivables, cash and cash equivalents and deposits with banks and financial institutions, and from the use of derivative financial instruments. The Company’s policy is to manage credit exposure to trading counterparties within defined trading limits.

Trade and other receivables

If any of the Company’s customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, the Company assesses the credit quality of the customer taking into account its financial position, past experience and other factors. The Company may seek cash collateral, letter of credit or parent company guarantees, as considered appropriate.

F-56
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
As of December 31, 2024 and 2023, current and non-current sales receivables, net of allowance for doubtful accounts, amounted to:

2024
2023
Current trade receivables
156,318,243
111,284,256
Allowances for doubtful accounts (1)
( 301,770
)
( 657,145
)
Total
156,016,473
110,627,111
(1)
Said amount represents the best estimate made by tgs according to what is stated in Note 4.b).

Likewise, as of December 31, 2024 and 2023, the Company has credits for government grants for Ps. 10,881,706 and Ps. 10,182,355 , respectively.

In the ordinary course of business, the Company provides natural gas transportation services mainly to natural gas distribution companies, CAMMESA and Pampa Energía. The amounts of revenues made to the principal customers to which Natural Gas Transportation services were provided in the years ended December 31, 2024, 2023 and 2022 and the revenues receivable balances (net of allowances) as of December 31, 2024 and 2023 are set forth below:

2024
2023
2022
Revenues
Trade
Receivables
Revenues
Trade
Receivables
Revenues
MetroGAS
113,619,394
13,033,790
52,956,427
3,216,147
70,225,756
Camuzzi Gas Pampeana S.A.
84,337,807
9,716,865
39,350,617
2,365,244
52,002,664
Naturgy Argentina
68,778,244
8,436,333
32,038,698
2,059,127
42,627,598
CAMMESA
35,418,327
9,213,758
19,266,336
3,187,698
25,736,270
Pampa Energía
17,086,616
2,253,966
7,536,340
578,565
9,978,132
Camuzzi Gas del Sur S.A.
20,456,659
2,339,822
9,771,707
145,085
12,320,110

The amounts of Liquids Production and Commercialization revenues made to major customers during the years ended December 31, 2024, 2023 and 2022 and revenues receivable balances (net of allowances) as of December 31, 2024 and 2023 are set forth below:

2024
2023
2022
Revenues
Trade
Receivables
Revenues
Trade
Receivables
Revenues
PBB Polisur
136,799,988
13,770,395
219,991,441
16,318,300
173,532,947
Geogas Trading S.A.
24,139,860
-
18,135,161
-
24,877,680
YPF
15,426,368
1,171,556
10,591,489
194,191
17,622,408
Petrobras Global Trading BV
8,412,581
-
4,152,820
4,152,820
1,901,593
Trafigura Beheer
77,917,255
5,514,642
90,033,255
6,725,928
108,289,447
Pampa Energía
16,099,079 2,377,690 18,740,254 1,407,443 24,299,050

The amounts of Midstream revenues made to major customers during the years ended December 31, 2024, 2023 and 2022 and revenues receivable balances (net of allowances) as of December 31, 2024 and 2023 are set forth below:

2024
2023
2022
Revenues
Trade
Receivables
Revenues
Trade
Receivables
Revenues
Tecpetrol
20,728,296
3,890,477
25,289,029
3,677,427
18,448,921
Exxomobil Exploration
11,158,951
1,536,303
11,586,808
1,932,210
11,075,715
YPF
25,320,969
5,145,765
28,150,424
8,201,398
29,012,777
Vista Energy
7,852,914
1,528,803
4,485,314
1,052,351
1,596,493
Pluspetrol
39,036,630
7,042,032
26,921,717
6,042,231
17,892,760
Pampa Energía
49,595,319
8,544,281
38,397,233
9,201,069
26,941,028

F-57
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Cash and financial placements

The credit risk on cash and cash equivalents and other financial placements is limited since tgs has short-term fund placement policies whose main objective is to obtain an adequate return based on market characteristics and minimizing risk exposure. These placements are diversified in different financial institutions with adequate credit ratings in order to limit exposure to a few financial institutions. The Company’s maximum exposure to credit risk will be given by the carrying value of assets included in cash and cash equivalents and other financial assets measured at amortized cost.

Below is a detail of the maturities of the financial assets included in (i) cash and cash equivalents, (ii) other financial assets, (iii) trade receivables, and (iv) other receivables as of December 31, 2024 and 2023:

December 31, 2024
Cash and
cash
equivalents

Financial assets
Credits (1) (2)
Without specified maturity
59,973,684
464,955,449
28,714
With specified maturity
Overdue
Until el 12-31-2023
-
-
3,272,641
From 01-01-24 to 03-31-24
-
-
-
From 04-01-24 to 06-30-24
-
-
-
From 07-01-24 to 09-30-24
-
-
325,537
From 10-01-24 to 12-31-24
-
-
20,632,187
Total overdue
-
-
24,230,365
Non-due
From 01-01-25 to 03-31-25
-
240,634,495
143,842,758
From 04-01-25 to 06-30-25
-
-
1,853
From 07-01-25 to 09-30-25
-
-
48,767
From 10-01-25 to 12-31-25
-
30,975,000
22,358
During 2026
-
-
427,896
During 2027
-
-
-
During 2028
-
-
-
From 2029 onwards
-
-
-
Total non-due
-
271,609,495
144,343,632
Total with specified maturity
-
271,609,495
168,573,997
Total
59,973,684
736,564,944
168,602,711
(1)
The total amount of the receivables without specified maturity is recorded in Non-current assets.
(2)
Includes financial assets recorded in trade receivables and other receivables, excluding allowance for doubtful accounts.

F-58
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
December 31, 2023
Cash and
cash
equivalents

Financial assets
Credits (1) (2)
Without specified maturity
14,370,655
473,717,157
28,144
With specified maturity
Overdue
Until 12-31-2022
-
-
940,878
From 01-01-23 to 03-31-23
-
-
211
From 04-01-23 to 06-30-23
-
-
459
From 07-01-23 to 09-30-23
-
-
20,640
From 10-01-23 to 12-31-23
-
-
6,766,981
Total overdue
-
-
7,729,169
Non-due
From 01-01-24 to 03-31-24
-
220,547,718
98,788,606
From 04-01-24 to 06-30-24
-
8,771,277
16,286,964
From 07-01-24 to 09-30-24
-
-
16,051
From 10-01-24 to 12-31-24
-
46,116
21,700
During 2025
-
233,423,073
42,662
During 2026
-
-
-
During 2027
- - -
2028 onwards
-
-
-
Total non-due
-
462,788,184
115,155,983
Total with specified maturity
-
462,788,184
122,885,152
Total
14,370,655
936,505,341
122,913,296
(1)
The total amount of the receivables without specified maturity is recorded in Non-current assets.
(2)
Includes financial assets recorded in trade receivables and other receivables, excluding allowance for doubtful accounts.

16.1.5 Liquidity risk

This risk involves the difficulties that tgs may have in meeting its commercial and financial obligations. To this end, the expected cash flow is regularly monitored.

tgs has policies for borrowing funds whose main objective is to cover financing needs at the lowest cost according to market conditions. One of the Company’s main objectives is to have financial solvency. Given the current conditions of the financial market, the Company believes that the availability of resources and the positive cash flow from operations are sufficient to meet its current obligations, despite having credit lines for borrowing funds.

Additionally, a methodology is used for the analysis and assignment of credit limits to the different financial entities in order to minimize the associated liquidity risk. In line with this, the Company invests its liquid funds in financial entities with an adequate credit rating.

Below is a detail of the maturities of the Company’s financial liabilities corresponding to: commercial debts, remunerations, other debts and financial debts as of December 31, 2024 and 2023. The amounts presented in the tables represent contractual undiscounted cash flows and, therefore, do not correspond to the amounts presented in the statement of financial position. These estimates are made on the basis of information available at the end of each year and may not reflect actual amounts in the future. Therefore, the amounts shown are provided for illustrative purposes only:

F-59
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
December 31, 2024
Loans
Other financial
liabilities
Leases liabilities
Without specified maturity
-
-
-
With specified maturity
Overdue
Until el 12-31-2023
-
522,090
-
From 01-01-24 to 03-31-24
-
311
-
From 04-01-24 to 06-30-24
-
311
-
From 07-01-24 to 09-30-24
-
311
-
From 10-01-24 to 12-31-24
-
311
-
Total overdue
-
523,334
-
Non-due
From 01-01-25 to 03-31-25
50,242,959
118,427,943
2,124,119
From 04-01-25 to 06-30-25
22,308,860
933,245
2,124,119
From 07-01-25 to 09-30-25
21,491,400
-
2,124,119
From 10-01-25 to 12-31-25
-
-
2,124,119
During 2026
42,982,800
-
5,432,723
During 2027
42,982,800
-
866,831
During 2028
677,611,200
-
-
From 2029 onwards
-
-
-
Total non-due
857,620,019
119,361,188
14,796,030
Total with specified maturity
857,620,019
119,884,522
14,796,030
Total
857,620,019
119,884,522
14,796,030

December 31, 2023
Loans
Other financial
liabilities
Leases liabilities
Without specified maturity
-
-
-
With specified maturity
Overdue
Until 12-31-2022
-
1,080,571
-
From 01-01-23 to 03-31-23
-
677
-
From 04-01-23 to 06-30-23
-
677
-
From 07-01-23 to 09-30-23
-
677
-
From 10-01-23 to 12-31-23
-
677
1,327,128
Total overdue
-
1,083,279
1,327,128
Non-due
From 01-01-24 to 03-31-24
47,719,339
100,449,627
3,604,121
From 04-01-24 to 06-30-24
60,596,588
228,584
3,604,121
From 07-01-24 to 09-30-24
260,323
-
3,604,121
From 10-01-24 to 12-31-24
62,766,409
-
3,604,121
During 2025
954,060,887
-
14,494,314
During 2026
-
-
9,267,794
During 2027
-
-
1,478,744
2028 onwards
-
-
-
Total non-due
1,125,403,546
100,678,211
39,657,336
Total with specified maturity
1,125,403,546
101,761,490
40,984,464
Total
1,125,403,546
101,761,490
40,984,464

16.1.6 Capital management risk

The Company’s objectives in managing capital are to safeguard the Company’s ability to continue as a going concern, to achieve an optimal cost of capital structure and to support the investment process in order to provide returns to shareholders and benefits to other stakeholders.

F-60
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
tgs seeks to maintain a level of cash generation from its operating activities that will enable it to meet all of its commitments.

The Company monitors capital on the basis of the leverage ratio. This ratio is calculated as total financial debt (including “current financial debt” and “non-current financial debt” as shown in the Statement of Financial Position) divided by total capital. Total capital is calculated as “Shareholders’ Equity”, as shown in the Statement of Changes in Shareholders’ Equity, plus total financial debt.

During the years ended December 31, 2024 and 2023, the gearing ratio was as follows:

2024
2023
Total debt (Note 13)
580,109,631
1,027,078,808
Total equity
2,233,512,179
1,863,348,684
Total capital
2,813,621,810
2,890,427,492
Gearing Ratio
0.21
0.36

16.2 Financial instruments by category and level of hierarchy

16.2.1 Categorization of financial instruments

Accounting policies for the categorization of financial instruments were explained in Note 4.e. In accordance with IFRS Accounting Standards 7, IAS 32 and IFRS Accounting Standards 9, non-financial assets and liabilities, such as contract and supplier liabilities, tax and social charges, income tax and deferred income tax are not included.

F-61
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
The categorization of financial assets and liabilities as of December 31, 2024 and 2023 is included below:

December 31, 2024
Financial assets
at fair value
Financial assets at
amortized cost
Total
CURRENT ASSETS
Trade receivables
-
156,016,473
156,016,473
Other receivables
-
11,862,574
11,862,574
Financial assets at amortized cost
-
271,609,495
271,609,495
Financial assets at fair value through profit or loss
464,955,449
-
464,955,449
Cash and cash equivalents
17,716,933
42,256,751
59,973,684
Total current assets
482,672,382
481,745,293
964,417,675
NON-CURRENT ASSETS
Other receivables
-
421,894
421,894
Total non-current assets
-
421,894
421,894
Total assets
482,672,382
482,167,187
964,839,569

Financial
liabilities at fair
value
Financial liabilities
at amortized Cost
Total
CURRENT LIABILITIES
Trade payables
-
76,722,524
76,722,524
Loans
-
78,396,382
78,396,382
Payroll and social security taxes payables
-
16,100,693
16,100,693
Other payables
-
243,983
243,983
Total current liabilities
-
171,463,582
171,463,582
NON-CURRENT LIABILITIES
Loans
-
501,713,249
501,713,249
Total non-current liabilities
-
501,713,249
501,713,249
Total liabilities
-
673,176,831
673,176,831

December 31, 2023
Financial assets
at fair value
Financial assets at
amortized cost
Total
CURRENT ASSETS
Trade receivables
-
110,627,111
110,627,111
Other receivables
-
11,597,494
11,597,494
Financial assets at amortized cost
-
229,365,109
229,365,109
Financial assets at fair value through profit or loss
473,717,157
-
473,717,157
Cash and cash equivalents
4,472,780
9,897,875
14,370,655
Total current assets
478,189,937
361,487,589
839,677,526
NON-CURRENT ASSETS
Other receivables
-
31,546
31,546
Financial assets measured at amortized cost
-
233,423,075
233,423,075
Total non-current assets
-
233,454,621
233,454,621
Total assets
478,189,937
594,942,210
1,073,132,147

Financial
liabilities at fair
value
Financial liabilities
at amortized cost
Total
CURRENT LIABILITIES
Trade payables
-
90,857,949
90,857,949
Loans
-
131,893,312
131,893,312
Payroll and social security taxes payables
-
10,745,851
10,745,851
Other payables
-
161,960
161,960
Total current liabilities
-
233,659,072
233,659,072
NON-CURRENT LIABILITIES
Loans
-
895,185,496
895,185,496
Total non-current liabilities
-
895,185,496
895,185,496
Total liabilities
-
1,128,844,568
1,128,844,568


F-62
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
16.2.2 Fair value measurement hierarchy and estimates

According to IFRS 13, the fair value hierarchy introduces three levels of inputs based on the lowest level of input significant to the overall fair value. These levels are:

•
Level 1: includes financial assets and liabilities whose fair values are estimated using quoted prices (unadjusted) in active markets for identical assets and liabilities. The instruments included in this level primarily include balances in mutual funds and public or private bonds listed on the Bolsas y Mercados Argentinos S.A. (“BYMA”). Mutual funds mainly invest in highly liquid instruments with low price risk.

•
Level 2: includes financial assets and liabilities whose fair value is estimated using different assumptions quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (for example, derived from prices). Within this level, the Company includes those derivate financial instruments for which it was not able to find an active market.

•
Level 3: includes financial instruments for which the assumptions used in estimating fair value are not based on observable market information.

During 2024 and 2023, there were no transfers between the different hierarchies used to determine the fair value of the Company’s financial instruments or reclassifications between categories of financial instruments.

The tables below show different assets at their fair value classified by hierarchy as of December 31, 2024 and 2023:

As of December 31, 2024
Level 1
Level 2
Level 3
Total
Financial assets at fair value
Cash and cash equivalents
17,716,933
-
-
17,716,933
Financial assets at fair value through profit or loss
464,955,449
-
-
464,955,449
Total
482,672,382
-
-
482,672,382

As of December 31, 2023
Level 1
Level 2
Level 3
Total
Financial assets at fair value
Cash and cash equivalents
4,472,780
-
-
4,472,780
Financial assets at fair value through profit or loss
473,717,157
-
-
473,717,157
Total
478,189,937
-
-
478,189,937


The fair value amount of the financial assets is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

As of December 31, 2024, the carrying amount of certain financial instruments used by the Company, in cash, cash equivalents, other investments, accounts receivable and payable and short-term obligations is representative of fair value due to the short-term nature of these instruments.

The estimated fair value of Non-current loans is estimated based on quoted market prices. The following table reflects the carrying amount and estimated fair value of the 2031 Notes at December 31, 2024, based on their quoted market price:

As of December 31, 2024
Carrying amount
Fair value
2031 Notes
514,170,137
528,840,144

F-63
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
17.
REGULATORY FRAMEWORK

a.
Regulatory framework of the Natural Gas Transportation Segment

General Aspects

Regarding tgs ’ Natural Gas Transportation business, it is regulated by Law No. 24,076 (“the Natural Gas Act”), its regulatory Decree No. 1,738/92 and the Regulatory framework for the transportation and distribution of natural gas in Argentina. The Natural Gas Act created ENARGAS, which is entitled, among other things, to set the basis for the calculation, monitoring, approval of tariffs and the power to verify compliance with the Natural Gas Law and its regulations. On January 28, 2016, Resolution No. 7 of the Ministry of Energy and Mining (“MINEM”) of Argentina repealed the Resolution 2000/2005 of the former Ministry of Federal Planning, Public Investment and Services (“ex MPFIPyS”) which provided that all tariff increases should have the prior intervention of the Undersecretary of Coordination and Management Control.

tgs ’ License has been granted for an original period of 35 years beginning on December 28, 1992. However, the Natural Gas Act provides that tgs may apply to ENARGAS for a renewal of its license for an additional period of ten years . ENARGAS should evaluate at that time the performance of tgs and raise a recommendation to the Executive Branch. At the end of the period of validity of the license, 35 or 45 , as appropriate, the Natural Gas Act requires a call for a new tender for the granting of a new license, in which tgs , provided the Company fulfilled substantially with the obligations resulting from the license, would have the option of matching the best offer that the Government received in this bidding process.

Although the License expires in December 2027, it can be extended by the Executive Branch for an additional period of 10 years, provided that certain technical conditions established in it are met. Furthermore, in accordance with the regulations of the Ley Bases, the mentioned 10 -year period is extended to 20 years.

On September 8, 2023, the Company submitted to ENARGAS the request to initiate the procedure contemplated in Article 6 of the Natural Gas Law No. 24,076 for the renewal of the License. On June 13, 2024, ENARGAS issued a technical and legal report indicating that the Company has fully complied with its obligations regarding the License. The aforementioned report allows the ENARGAS controller, after the non-binding public hearing held on October 21, 2024, to issue its recommendation report to be submitted to the PEN, which could ultimately issue the decree granting the required extension of the License. Following this submission of the ENARGAS recommendation, the PEN may issue the decree granting the extension of the License within 120 business days.

As of the date of issuance of these Financial Statements, the PEN decree is still pending issuance, which is estimated to be issued during the first half of 2025 after the various public bodies have been involved.

Tariff situation

Prior the enactment of the Public Emergency Law, and according to the Regulatory Framework, transportation tariffs were to be calculated in US dollars and converted into Argentine pesos at the time the customer was billed using the exchange rate prevailing at the date of the billing. The basic natural gas transportation tariffs charged by tgs had been established at the time of the privatization of GdE and were to be adjusted, subject to prior authorization, in the following cases: (i) semi-annually to reflect changes in the US producer price index (“PPI”) and (ii) every five years according to efficiency and investment factors determined by ENARGAS. The “efficiency factor” was a reduction to the base tariff resulting from future efficiency programs while the “investment factor” increased the tariffs to compensate the licensees for future investments which were not repaid through tariffs. Also, subject to ENARGAS approval, tariffs were to be adjusted to reflect non-recurrent circumstances or tax changes, other than income tax.

F-64
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Following the enactment of the Public Emergency Law, the adjustment clauses for tariffs based on the value of the US dollar and those based on foreign price indexes, as well as any other indexing mechanism, were eliminated. Additionally, the law established an exchange rate of one Argentine peso equal to one US dollar for tariffs and granted the Executive Branch power to renegotiate public service contracts with the licensee companies according to certain criteria established therein. The law, after successive extensions, expired on December 31, 2017.

Between July 2003 and March 2018, the Company received a series of temporary tariff increases under the framework of the Integral Tariff Review (“RTI” for its acronym in Spanish) process initiated after the Public Emergency Law was passed.

After being approved by the various intervening government agencies and the National Congress, the 2017 Integral Agreement signed on March 30, 2017 was ratified on March 27, 2018, through Decree No. 250/2018 (the “Decree 250”) of the Executive Branch. This decree represents the conclusion of the RTI process and the completion of the 2017 Transitional Agreement, and thus, the final renegotiation of the license after seventeen years of negotiations.

The 2017 Integral Agreement sets the guidelines for the provision of the natural gas transportation service until the end of the License. Among these guidelines:


•
The RTI Process, which will culminate in the signing of the integral agreement, was approved. As a result of this RTI, a new tariff schedule was also approved. This new tariff schedule applicable to the Company determined a total tariff increase of 214.2 % and 37 %, in the event that it had been granted in a single installment as of April 1, 2017, on the tariff of the natural gas transportation service and the CAU, respectively.


•
A Five-Year Investment Plan is approved. Resolution 4362 obliged tgs for the execution of the Five-Year Plan, which requires a high level of essential investments for the operation and maintenance of the pipeline system, to provide quality, safe and reliable service. The Five-Year Plan shall be for the period from April 1, 2017 to March 31, 2022 and will amount to Ps. 6,786,543 , expressed in December 31, 2016 currency terms.


•
A non-automatic six-month adjustment mechanism for the natural gas transportation tariff and the investment commitments were approved. This adjustment must be approved by ENARGAS and for its calculation, the evolution of the WPI published by INDEC will be considered.


•
tgs and its shareholders must withdraw any claim against the Government related to the natural gas transportation business, including the arbitration proceedings before the ICSID. The Company desisted from it on June 26, 2018.

F-65
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Semi-annual tariff increase

As mentioned above, following the completion of the RTI process, the Company is granted the right to receive a semi-annual tariff adjustment, which is subject to the authorization of ENARGAS.

In the public hearing held on September 4, 2018, in which the Company requested, based on the variation of the WPI recorded for the period February - August 2018, a tariff increase of approximately 30 %. Considering the hearing, on September 27, 2018, ENARGAS issued Resolution No. 265/2018 which determined a 19.7 % tariff increase effective as of October 1, 2018.

This increase was determined by ENARGAS based on the simple average of the WPI, the Construction Cost Index for the period February and August 2018 and the Salary Variation Index between December 2017 and June 2018.

On March 29, 2019, ENARGAS issued Resolution No. 192/2019 (“Resolution 192”) that approved, effective as of April 1, 2019, a 26 % increase in the tariff chart applicable to the public service of natural gas transportation by tgs in force as of March 31, 2019.

In accordance with current regulations, ENARGAS has considered the evolution of the wholesale price index update index (“WPI”) between the months of August 2018 and February 2019, in order to define the semi-annual adjustments applicable to tgs tariffs.

Regarding the semi-annual tariff adjustment that was to be enforced as from October 1, 2019, on September 3, 2019, the SE issued Resolution No. 521/2019 (“Resolution 521”) postponing it to February 1, 2020, subsequently modified by Resolution No. 751/2019 by which it was postponed until February 1, 2020. This deferral also meant that the Company has adapted, in equal proportion to the income that is not received, the execution of the Five-Year Investment Plan.

Following the enactment of the Solidarity Law, the national government announced its intention to suspend tariff adjustments for public services for the transportation and distribution of natural gas and electricity under federal jurisdiction for 180 days, in order to initiate a process of renegotiation of the RTI, or to initiate an extraordinary tariff review. On June 18, 2020, the PEN promulgated Decree of Necessity and Urgency No. 543/20, through which the tariff freeze established by the Solidarity Law was extended for another 180 calendar days.

On December 16, 2020, Decree of Necessity and Urgency No. 1,020/2020 (“Decree 1,020”) was issued, through which the start of the renegotiation of the RTI concluded in 2018 within the framework of the Solidarity Law was determined .

According to that decree, the renegotiation period could not exceed 2 years from the date of entry into force. Until then, the current renegotiation agreements were suspended. Said renegotiation remained in the power of ENARGAS ad-referendum of the PEN. The renegotiation process was extended on successive occasions, the last of which was until July 9, 2025.

Additionally, the Solidarity Law provides for the administrative intervention of ENARGAS, recently extended through Decree 1,023/2024 (“Decree 1,023”).

F-66
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
On March 16, 2021, the public hearing convened by ENARGAS was held for the purposes of considering the Transitional Tariff Regime (“RTT”) in accordance with the provisions of Decree 1,020. In this regard, tgs , without renouncing the full percentage of tariff recomposition that corresponds to it, alternatively presented at this hearing a proposal for a tariff increase calculated by 58.6 %, as of April 1, 2021. It was calculated based on the financial needs to meet the operating and financial costs, capital investments and taxes, which were calculated considering the evolution of the inflation rate for a period of 12 months from its inception. Such requested increase contemplated only the necessary funds to meet the obligations as a licensee.
Additionally, in such public hearing, tgs denied and dismissed the arguments raised in it that considered that the current natural gas transportation tariff is not fair and reasonable given the alleged existence of serious defects in the administrative acts derived from the processing of the last Regime Comprehensive Tariff (“RTI”) made for tgs .
On April 28, 2021, ENARGAS sent to tgs , a Transitory Agreement Project 2021 within the framework of the provisions of Decree 1,020. Said project provided:
•
The non-granting of a temporary tariff increase, keeping the tariff schedules approved by ENARGAS in April 2019 unchanged.
•
It established that from May 2021 and until the Definitive Renegotiation Agreement is in force, ENARGAS will proceed to re-calculate the transportation tariffs at that time in force with effect from April 1, 2022.
•
It did not establish a mandatory investment plan.
•
The prohibition of: (i) distribution of dividends, (ii) an early cancellation of financial and commercial debts contracted with shareholders, and (iii) the acquisition of other companies or granting loans.
On April 30, 2021, through a note sent to that body, tgs stated that, given the context in which it develops its activities and the proposed terms and conditions, it was not feasible for the Company to sign the 2021 Temporary Agreement Project.
On June 2, 2021, ENARGAS issued Resolution No. 149/2021 (the “Resolution 149”) approving an RTT for the year 2021 (the “RTT 2021”) for tgs effective as of that date. On the other hand, the Ministry of Economy and ENARGAS issued Joint Resolution No. 1/2021 where they approved the actions taken in the renegotiation process developed by ENARGAS in the terms of Decree No. 1020/2020, indicating that it was not feasible to arrive to an agreement on a transitional tariff adjustment.
In July 2021, tgs filed appeals for reconsideration with the PEN, the Ministry of Economy of the Nation and ENARGAS with an appeal or hierarchical subsidy in accordance with the respective powers of each of these bodies in the dictation of the entire regulatory plexus associated with Resolution 149, (Decree 1020/20, Decree 353/21, and Joint Resolution No. 1/2021), requesting that the RTT be declared null and void and the RTI be restored. We recall that the RTT began with Decree 1020/20, which set the guidelines to carry out the renegotiation of the RTI, later issuing Joint Resolution 1/21, which sets the RTT, and Decree 353/21, which approved Joint Resolution 1 /21, and culminates with Resolution 149, which approved the new tariff charts.
The challenges are based on: i) the illegality of Decree 1020 because it does not follow the lines of the delegation provided for in Law 27,541, and as a Decree of Necessity and Urgency it does not comply with the requirements of the Constitution for the issuance of this regulation; ii) the extension of the emergency beyond that provided by Congress; iii) the failure to carry out the tariff renegotiation as provided for in Law 24. 076; iv) the disregard of the principle of fair and reasonable tariffs, and the acquired rights of tgs in the License, the Contractual Adjustment Agreement and the RTI; and v) the suspension of the RTI for reasons of public interest, which merits the recognition of the compensations, provided by both the Administrative Procedures Law and the Basic Rules of the License.
F-67
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
The restrictions imposed on the management and management of the Company, which have no legal justification, are also questioned, given that the emergency declared by Law No. 27,541 only empowered the National Executive Power to renegotiate the RTI and not the License.
The challenges and the request for reinstatement of the RTI have been made without prejudice to the right of tgs to pay the compensation that corresponds to it for not having complied with the RTI since April 2019.
On November 15, 2021, the Company filed a Prior Administrative Claim before ENARGAS and the Ministry of Economy. The purpose of said presentation is to request the compensation that corresponds to tgs for the lack of application of the semi-annual adjustment methodology established in the RTI approved by Resolution 4362 between October 1, 2019 and June 1, 2021.
In addition, payment of compensation for the damages suffered by tgs due to the freezing caused by the failure to apply the six-monthly adjustment methodology established in the RTI in the aforementioned period is requested.
On January 19, 2022, a new public hearing was held, within the framework of ENARGAS Resolution No. 518/2021, whose purpose was to deal with a transitory tariff adjustment within the framework of Decree 1020/2020. In such hearing, with the purpose of reaching a definitive agreement on the renegotiation and recomposing the license economic-financial equation, tgs requested a transitory tariff adjustment applied in two stages for the year 2022 for a total of 106 %, due to the evolution of operating costs and the main macroeconomic indicators.
Subsequently, on February 1, 2022, tgs received from ENARGAS a proposal for a Transitional Renegotiation Agreement (the “2022 Transition Agreement”) which was approved by our Board of Directors on February 2, 2022 and by the corresponding government agencies on February 18, 2022. The 2022 Transition Agreement includes, in some aspects, similar terms to the 2021 RTT with the particularity that it grants tgs a 60 % tariff increase effective as from March 1, 2022 (the “RTT 2022”).
The 2022 Transition Agreement was ratified by the PEN through Decree No. 91/2022, which entered into force as from February 23, 2022. On February 25, 2022, the ENARGAS issued Resolution No. 60/2022 by which it put into effect the tariff schedules that contemplate the RTT 2022.

It should be noted that, in accordance with the provisions of the 2022 Transition Agreement, tgs committed not to initiate new claims, appeals, actions, lawsuits or demands of any kind; and/or to suspend, keep suspended or extend the suspension of all appeals and claims filed that are related in any way to the Renegotiation of the Comprehensive Tariff Review in force, Law No. 27,541, Decrees No. 278/20 and No. 1020 .

Under Decrees 1020 and 815, on December 7, 2022, ENARGAS issued Resolution No. 523/2022 which called for a public hearing on January 4, 2023 to, among other issues, consider the transitory adjustment of tariffs for the public natural gas transportation service.

F-68
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
On March 16, 2023, the TGS Board of Directors approved the proposed addendum to the transitional renegotiation agreement (the “2023 Transition Agreement”) sent by ENARGAS. This addendum was subsequently ratified by the PEN through Decree No. 250/2023 of April 29, 2023. Previously, on April 27, 2023, ENARGAS issued Resolution No. 186/2023 through which the new tables were published. current tariffs.

The 2023 Transition Agreement has similar conditions to the 2022 Transition Agreement and includes:

- As of April 29, 2023, a temporary rate increase of 95 % on the natural gas transportation rate and the CAU.

- During its term, tgs could only distribute dividends after requesting authorization from ENARGAS, subject to the approval of the Ministry of Economy.

On December 14, 2023, ENARGAS Resolution No. 704/2023 called for a public hearing to be held on January 8, 2024 in order to consider a temporary tariff adjustment.

On December 16, 2023, decree No. 55/2023 was issued declaring the emergency of the national energy sector until December 31, 2024 which was extended until July 9, 2025 by Decree 1023 of November 19, 2024. Among other issues, this decree: (i) establishes the beginning of the process of Five-year Tariff Review (“RQT”), (ii) the intervention of ENARGAS as of January 1, 2024 and (iii) instructs the Ministry of Energy to issue the necessary standards and procedures for the sanction of market prices for the public transport service of natural gas. Decree 1023 provides that the entry into force of the tariff tables resulting from the tariff review initiated pursuant to the provisions of Decree No. 55/23 may not exceed July 9, 2025.

After the public hearing was held on January 8, 2024 and its validity was declared by ENARGAS, On March 26, 2024, tgs entered the 2024’s Transitional Agreement with the ENARGAS, which provides for a transitional 675 % increase in natural gas transportation tariffs. This tariff increase came into effect on April 3, 2024, after Resolution No. 112/2024 (the “Resolution 112”) issued by ENARGAS was published in the Official Gazette. According to Resolution 112, as from May 2024 and until the RTI process is completed, tariffs are adjusted monthly according to the following formula (the “Transitional Adjustment Index”):

- 47.0 % adjusted by the Wage Index - Registered Private Sector published by INDEC
- 27.2 % adjusted by the WPI
- 25.8 % adjusted by the Construction Cost Index in Greater Buenos Aires - Materials chapter published by INDEC.

To this end, ENARGAS will issue the corresponding monthly resolution adjusting the tariff tables to be applied. On May 9, 2024, ENARGAS notified the licensee companies of the public natural gas transportation and distribution service of the postponement of the monthly tariff adjustment mentioned above.

During the months of May to July 2024, ENARGAS notified tgs that it will postpone the implementation of the monthly tariff adjustment. Likewise, it notified that it will replace the monthly adjustment methodology mentioned above for the remainder of 2024. According to the ENARGAS notification, the monthly tariff increase will be based on the expected inflation to be estimated by the Ministry of Economy for said period.

On July 1, ENARGAS once again informed the Company of the postponement of the monthly tariff increase, this time corresponding to the month of July, maintaining the tariff schedules in effect since April 3, 2024.

F-69
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
During the year 2024 and the elapsed period of 2025, the Company received tariff increases of 675 %, 4 %, 1 %, 2.7 %, 3.5 %, 3 %, 2.5 %, 1.5 % and 1.7 % effective from April 3, August 1, September 2, October 1, November 4, December 4 and January 1, February 1 and March 6, 2025, respectively.

It is worth noting that the operation of gas pipelines by tgs requires a high level of investment related to the quality, safety and reliability of the service. This is the reason why it is important to determine the tariff for the public service of natural gas transportation based on a prudent and efficient economic operation, which allows obtaining sufficient income for the provision of a sustainable, safe and reliable service.

In this regard, and within the framework of the RQT process, on January 14, 2025, ENARGAS, through Resolution No. 16/2025, published the call for the public hearing held on February 6, 2025, with the purpose of considering, among other issues, the RQT for gas transportation and distribution, and the periodic adjustment methodology for gas transportation and distribution tariffs.

At this hearing, tgs presented, among other aspects, its expenditure and investment plan for the five-year period 2025-2029, the capital base, and the proposed WACC ( 9.98 % real after taxes). Considering the tariff calculation methodology and the mentioned parameters, a tariff increase of 22.7 % was requested compared to the tariffs in effect as of January 2025. Additionally, alternatives for the periodic tariff adjustment methodology were presented:

•
WPI, or
•
A polynomial formula composed of information published by INDEC:
o
30 % WPI,
o
40 % total registered wage index, and
o
30 % construction cost index for materials.

As of the date of issuance of these Consolidated Financial Statements, ENARGAS has not issued the corresponding resolution concluding the RQT by granting the tariff increase and providing the framework under which the natural gas transportation activity will be developed during the five-year period 2025-2029. However, at the public hearing, ENARGAS proposed the application of a WACC rate of 7.18 % real, after taxes, and a periodic tariff adjustment proposal composed of 50 % CPI and 50 % WPI.

b)
General framework for non-regulated segments

Domestic market

The Liquids Production and Commercialization and Midstream segments are not subject to regulation by ENARGAS, and as it is provided in the Transfer Agreement, is organized as a separate business unit within tgs , keeping accounting information separately. However, over recent years, the Argentine Government enacted regulations which significantly impacted on it.

In April 2005, the Argentine Government enacted Law No. 26,020 which sets forth the regulatory framework for the industry and commercialization of LPG. Among other things, the Law No. 26,020 creates the framework through which the Secretary of Hydrocarbon Resources (“SHR”) (formerly the Federal Energy Bureau) establishes regulations meant to cause LPG suppliers to guarantee sufficient supply of LPG in the domestic market at low prices. Law No. 26,020 creates a price regime pursuant to which the SRH periodically publish reference prices for LPG sold in the domestic market. It also sets forth LPG volumes to be sold in the domestic market.

F-70
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Within this framework, tgs sells propane and butane production to fractionators at prices determined every six months. On March 30, 2015, the Executive Branch issued Decree No. 470/2015, regulated by Resolution No. 49/2015 issued by the Federal Energy Bureau, which created the Programa Hogares con Garrafa (the “Households with Bottles Program”) which replaced the programs in force until that time. The Households with Bottles Program was implemented through Resolutions No. 49/2015 and No. 470/2015 issued by the Federal Energy Bureau.

During 2024, within the framework of the Households with Bottles Program, a maximum reference price was determined for the members of the commercialization chain in order to guarantee the supply to low-income residential users, forcing producers to supply with LPG at a certain price and at a certain quantity defined for each of them. Initially, the payment of compensation to the participating producers of the Households with Bottles Program was established, which was eliminated as of February 2019.

It is noteworthy that on January 24, 2025, the Secretary of Energy issued Resolution No. 15/2025, which, effective from that date, eliminates the maximum sale price set for products provided under the Home Program (with the export parity price published by the SE under Law No. 26,020 being the sale price limit). Additionally, although this resolution maintains the obligation for LPG producers to supply the domestic market, it eliminates the previously existing supply contributions.”

Between December 31, 2023 and December 31, 2024, the price increased by 75 % due to ENARGAS Resolutions 11 and 216. As of December 31, 2024, the price is $ 420,000 /tn.

In this context, the Company has filed several administrative and judicial claims challenging the general regulations of the Home Plan, as well as the administrative acts that determine the volumes of butane to be sold in the local market, in order to safeguard its economic-financial situation and so that such situation does not continue in time.

Additionally, the Company participates in the Propane Gas Supply Agreement for Indiluted Propane Gas Distribution Networks (“Propane for Networks Agreement”) entered into with the Argentine Government and propane producing companies whereby it undertakes to supply propane to distributors and sub-distributors of indiluted propane gas through networks at a price lower than the market price, The Company receives an economic compensation for the lower revenues derived from the participation in this program, which is calculated as the difference between the agreed sales price and the reference export parity price determined by the Energy Secretariat.

Regarding the agreement valid until December 31, 2023, said document was signed on August 18, 2023, which was ratified by the Executive Branch by decree 496/2023 on October 2, 2023. During much of 2024, propane deliveries were made under the terms of the 2023 agreement, in accordance with an instruction from the SE. On November 6, 2024, tgs signed a new Propane Gas Supply Agreement for Undiluted Propane Gas Distribution Networks, valid until December 31, 2024.

F-71
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
As of December 31, 2024, the Argentine State owes tgs Ps. 10,881,706 for these concepts.

Foreign market

On September 3, 2018, the Executive Branch issued Decree No. 793/2018, which, between September 4, 2018 and December 31, 2020, sets an export duty of 12 % on the exported amount of propane, butane and natural gasoline. This withholding is capped at $ 4 for each dollar of the tax base or the official FOB price.

Subsequently, on the occasion of the enactment of the Solidarity Law, an 8 % cap was established for the rate applicable to hydrocarbons as of December 23, 2019.

Presidential Decree No. 488/2020 regulated the applicable tax rate on exports of certain oil and gas products, including those products that we export, establishing a range between 0 % and 8 % depending on the “ICE Brent first line” barrel price. If the price is below US$ 45 , the tax rate will be zero percent. On the other hand, if the price is equal to or higher than US$ 60 , an 8 % tax rate will be paid, being variable if the price is between US$ 45 and US$ 60 .

During 2023, the Company participated, within the framework of Resolution No. 808/2023 of the Ministry of Energy, of the Export Increase Program created by Decree 576/22.

According to said program, the Company must enter 75 % of the value of its exports in foreign currency into the country. The remaining 25 % may be settled in pesos through the purchase of negotiable securities. To qualify for the scheme, exports must be settled between October 2 and October 20, 2023, and the effective export date must not be later than November 30, 2023.

Subsequently, said program was extended by Decree No. 28/2023, which also modifies the settlement ratio, which is currently 80 % through the MULC and the remaining 20 % through sales and purchase operations of negotiable securities.

Decree No. 2,067 / 08 (the “Decree”)

Through Presidential Decree No. 2,067/08, the Executive Branch created a tariff charge to be paid by: (i) the users of regulated services of transportation and / or distribution, (ii) natural gas consumers receiving natural gas directly from producers without making use of transportation systems or natural gas distribution, (iii) the natural gas processing companies in order to finance the import of natural gas. The tariff charge sets forth in this decree finance the higher price of the natural gas imports required to compensate the injection of natural gas necessary to meet national requirements (the “Charge”). When the Charge was created, tgs paid it in accordance with the provisions of Resolution I-563/2008, at Ps. 0.0492 /m3.

The payment of the natural gas processing tariff charge was selectively subsidized from 2008 according to the destination of the natural gas. In November 2011, however, ENARGAS issued Resolution No. 1,982/11 and 1,991/11 (the “Subsidy Beneficiaries Resolutions”) which modified the list of the subsidy beneficiaries, and thus, involved a cost increase for many of our clients and for us (for certain of our consumption for our own account). The natural gas processing tariff charge increased from Ps. 0.0492 to Ps. 0.405 per cubic meter of natural gas effective from December 1, 2011, representing a significant increase in our variable costs of natural gas processing.

In order to avoid this damage, tgs appealed against the Presidential Decree and the Resolutions including National Government, ENARGAS and ex MPFIPyS as defendants.

F-72
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
For further information regarding the legal action filed the Company, see Note 20.a).

On March 28, 2016, the former MINEM issued Resolution No. 28/16 (“Resolution 28”), which instructs ENARGAS to take all the necessary measures to derogate the tariff charge created by Decree No. 2,067/08 as from April 1, 2016. However, such Resolution does not repeal or declare illegitimate this decree and the Subsidy Beneficiaries Resolutions for which the judicial action is still ongoing.

c)
Essential assets

A substantial portion of the assets transferred by GdE has been defined as essential for the performance of the natural gas transportation service. Therefore, tgs is required to keep separated and maintain these assets, together with any future improvements, in accordance with certain standards defined in the License.

tgs may not, for any reason, dispose of, encumber, lease, sublease or loan essential assets nor use such assets for purposes other than the provision of the licensed service without ENARGAS´s prior authorization. Any expansion or improvements that it makes to the gas pipeline system may only be encumbered to secure loans that have a term of more than one year to finance such extensions or improvements.

Upon expiration of the License, tgs will be required to transfer to the Argentine government or its designee, the essential assets listed in an updated inventory as of the expiration date, free of any debt, encumbrances or attachments. If the Company decides not to continue with the license, tgs will receive a compensation equal to the lower of the following two amounts:

i)
the net book value of the essential assets determined on the basis of the price paid by the acquiring joint arrangements, and the original cost of subsequent investments carried in US dollars and adjusted by the PPI, net of accumulated depreciation according to the calculation rules to be determined by ENARGAS; or

ii)
the net proceeds of a new competitive bidding (the “New Bidding”).

Once the period of the extension of the License expires, tgs will be entitled to participate in the New Bidding, and thus, it shall be entitled to:

i)
that its bid in the New Bidding be computed at an equal to the appraisal value to be determined by an investment bank selected by ENARGAS, which represents the value of the business of providing the licensed service as it is driven by the Licensee at the valuation date, as a going concern and without regard to the debts;

ii)
to obtain the new License, without payment, in the event that any bid submitted in the New Bidding exceeds the appraised value;

iii)
to match the best bid submitted by third parties in the New Bidding, if it would be higher than its bid mentioned in (i), paying the difference between both values ​​to obtain the new License;

iv)
if the Company is unwilling to match the best bid made by a third party, to receive the appraisal value mentioned in (i) as compensation for the transfer of the Essential Assets to the new licensee.
F-73
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Dedicated Branch

On September 5, 2024, General Resolution No. 19/2024 of the General Inspectorate of Justice (“IGJ Resolution 19/2024”) was published in the Official Gazette of the Argentine Republic, by means of which the regulation of the so-called Dedicated Branches for the Large Investment Incentive Regime (“RIGI”) provided for in Law No. 27,742, under the terms of its article 170, is established. This regime is designed to attract and encourage large-scale investments, both domestic and foreign, with the aim of boosting the country’s economic development.

The RIGI offers fiscal and legal incentives. These include:

•
Reduction in the income tax rate, from 35 % of the current rate to 25 % for the Dedicated Branch.
•
Accelerated amortization of assigned assets.
•
Early refund of VAT.
•
Calculation of 100 % of the tax on bank debits and credits.

•
Customs and exchange benefits.


On December 2, 2024, the Executive Branch issued Decree No. 1060/2024 (the “Decree 1060”) declaring the private initiative presented by tgs to be of national public interest. This project aims to expand the Perito Moreno Gas Pipeline (formerly the Néstor Kirchner Gas Pipeline) through the construction of 3 new compressor plants and the upgrading of the Tratayén and Saliqueló compressor plants.


The aforementioned works to expand the Perito Moreno Gas Pipeline will be incorporated into the concession duly granted to IEASA, currently ENARSA, by Decree No. 76/2022.


The price of the transport capacity resulting from the expansion, to be paid to the successful bidder, will be the price resulting from the public tender. The law applicable to this work will be governed by the provisions of Law No. 17,319. The resulting incremental capacity may be marketed by the successful bidder to third parties.


Additionally, Decree 1060 includes the express commitment of tgs to carry out the expansion works that are necessary for the final sections of its licensed system, regardless of whether or not it is awarded the public tender to be carried out.


On January 31, 2025, PEN Decree No. 54/2025 established that the Private Initiative presented by tgs will be governed by the contracting system provided in Article 6 of Decree No. 76 of February 11, 2022, which stipulates that ENARSA, with the approval of the Ministry of Economy, may enter into freely negotiated contracts related to transportation capacity with producers and/or shippers for the construction or expansion, in whole or in part, of the Perito Moreno Pipeline. On February 25, 2025, the Ministry of Economy issued Resolution No. 169/2025, delegating to the Secretariat of Energy and ENARSA the responsibility for conducting the bidding process for the Private Initiative. This resolution also establishes a series of guidelines that ENARSA must consider when drafting the tender documents. As of the date of issuance of these Consolidated Financial Statements, the bidding process prompted by the Private Initiative for the award of the new transportation capacity resulting from the expansion project has not yet been launched.

F-74
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
18.
ASSETS AND LIABILITIES IN FOREIGN CURRENCY

Balances in foreign currencies as of December 31, 2024 and 2023 are detailed below:

2024
2023
Foreign currency
Amount
Foreign currency
Amount
and amount
Exchange
rate
in local
and amount
in local

(in thousands)
currency
(in thousands)
currency
CURRENT ASSETS
Cash and cash equivalents
US$
40,373
1,029.00
(1)
41,543,946
US$
5,607
9,834,064
Financial assets at amortized cost US$ 263,955 1,029.00 (1)
271,609,495 US$
130,867 229,365,109
Financial assets at fair value through profit or loss (3)
US$
319,182
1,029.00
(1)
328,438,576
US$
226,454
397,194,746
Trade receivables
US$
82,426
1,029.00
(1)
84,816,354
US$
51,045
89,531,762
Total current assets
US$
705,936
726,408,371
US$
413,973
725,925,681
NON CURRENT ASSETS
Financial assets at amortized cost
US$
-
1,029.00
(1)
-
US$
133,082
233,423,075
Total non current assets
US$
-
-
US$
133,082
233,423,075
TOTAL ASSETS
US$
705,936
726,408,371
US$
547,055
959,348,756
CURRENT LIABILITIES
Trade payables
US$
37,510
1,032.00
(2)
38,710,320
US$
39,092
68,821,858
Euros 794 1,074.31 (2) 853,002 Euros 1,306 2,544,548
Loans
US$
75,965
1,032.00
(2)
78,396,382
US$
74,847
131,768,566
Euros - 1,074.31
(2)
- Euros 64 124,746
Total current liabilities
US$
113,475
117,106,702
US$
113,939
200,590,424
Euros 794
853,002 Euros 1,370 2,669,294
NON CURRENT LIABILITIES
Loans
US$
486,156
1,032.00
(2)
501,713,249
US$
508,481
895,185,496
Total non current liabilities
US$
486,156
501,713,249
US$
508,481
895,185,496
TOTAL LIABILITIES
US$
599,631
618,819,951
US$
622,420
1,095,775,920
Euros 794
853,002 Euros 1,370 2,669,294

(1)
Buy exchange rate at the end of fiscal year
(2)
Sell exchange rate at the end of fiscal year
(3)
Includes public and private debt bonds Dólar Linked for Ps. 187,163,063 .

US$: United States of America dollars

F-75
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
19.
COMMON STOCK AND DIVIDENDS

a)
Common stock structure and shares’ public offer

As of December 31, 2024, 2023 and 2022, tg s ’ common stock was as follows:


Amount of common stock, subscribed, issued and authorized for
public offer
Common Shares Class
(Face value $ 1 , 1 vote)
Outstanding shares
Treasury Shares
Common Stock
Class “A”
405,192,594
-
405,192,594
Class “B”
347,568,464
41,734,225
389,302,689
Total
752,761,058
41,734,225
794,495,283

tgs’ s shares are traded on the BYMA and under the form of the American Depositary Receipts (“ADSs”) (registered in the Securities and Exchange Commission (“SEC”) and representing 5 shares each) on the New York Stock Exchange.

b)
Acquisition of treasury shares

On March 6, 2020, the Company’s Board of Directors approved the sixth Program for the Acquisition of tgs treasury Shares in the markets where it makes a public offering of its shares (the “Sixth Repurchase Program”) for a maximum amount of Ps. 2,500 million (at the time of its creation).

Subsequently, on August 21, 2020, the Board of Directors approved a new Program for the Acquisition of tgs treasury Shares for a maximum amount to be invested in Ps. 3,000 million (at the time of its creation). This program was extended until March 22, 2021.

The acquisition cost of the treasury shares in portfolio amounted to Ps. 74,082,856 , which, together with the trading premium on treasury shares of Ps. 21,490,781 , in accordance with the provisions of Title IV, Chapter III, article 3.11.c and e of the Rules, restricts the amount of realized and liquid gains mentioned above that the Company may distribute.

c)
Restrictions on distribution of retained earnings

Pursuant to the General Companies Act and CNV Rules, we are required to allocate a legal reserve (“Legal Reserve”) equal to at least 5 % of each year’s net income (as long as there are no losses for prior fiscal years pending to be absorbed) until the aggregate amount of such reserve equals 20 % of the sum of (i) “common stock nominal value” plus (ii) “inflation adjustment to common stock,” as shown in our consolidated statement of changes in equity.

Finally, and as mentioned in subsection b of this note, the amounts subject to distribution are restricted up to the acquisition cost of treasury shares and the paid-up capital.

F-76
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
20.
LEGAL CLAIMS AND OTHER MATTERS

a)
Action for annulment of ENARGAS Resolutions No. I-1,982/11 and No. I-1,991/11 (the “Resolutions”)

After the issuance of the Resolutions, tgs filed a judicial action before the National Court of First Instance in Federal Administrative Litigation No. 1 (the “Court”) in order to obtain the declaration of nullity of the Presidential Decree No. 2067/08 and the Resolutions as well as the unconstitutionality of the administrative acts that created the Charge.

On July 5, 2012, the Court issued in favor of tgs a precautionary measure by which the suspension of the Charge was ordered in the terms set forth in the Resolutions. This decision was appealed in different opportunities by the National Government, by virtue of which the dictating of the precautionary measure was limited to the validity of six months . However, at maturity, the Company was entitled to obtain a new precautionary measure for a similar period.

As a result, on September 19, 2017, a new extension of the injunction was obtained (which prevented the Government to claim tgs of the payment of the amounts resulting from the new value of the Charge for the period between the November 2011 and March 2016), thus extending the validity until March 2018 or until the issuance of the judgment that resolves the substance of the matter, whichever occurs first.

On the other hand, the National Court of Appeals in Contentious Administrative Dismissal rejected the extraordinary appeal filed by the National Government against the judgment of that court that confirmed the rejection made by the Court at the request of ENARGAS to declare abstract the legal action initiated by tgs in accordance with the precedent “Alliance” issued by the Supreme Court in December 2014.

On March 26, 2019, TGS was notified of the judgment of first instance issued by the Federal Contentious-Administrative Court No. 1 in its claim initiated by which tgs requested the unconstitutionality of Decree No. 2,067/08; Resolutions and of any other rule or act issued or to be issued, that is caused by the mentioned rules (the “Cause”).

The first instance judgment declares the unconstitutionality of both Articles 53 and 54 of Law 26,784, as well as the aforementioned rules and of any other act tending to execute said provision, and consequently, the nullity of said rules (the “sentence”).

The Judgment was appealed by the National Government on March 29, 2019, and the appeal was granted on April 3, 2019, which has not been resolved as of the closing date of the year.

On October 29, 2019, the intervening judge decided, considering what was decided in the judgment and attending to the reasons invoked by tgs , to extend the validity of the precautionary measure issued for six more months of processing in said ordinary process and / or until the sentence passed is firm.

Pursuant to the isolation measures adopted by the Argentine Government under the COVID development, the judicial deadlines were suspended from March 20, 2020 until July 21, 2020.

F-77
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
On December 1, 2020, the court granted a new extension of said injunction for a term of 6 months .

On May 14, 2021, tgs was notified of the ruling issued by Chamber I of the Chamber in Contentious-Administrative Matters that (i) has revoked the decision by the Judge of First Instance and (ii) has imposed the costs in both instances in the order caused. tgs considers that it has reasonable arguments to defend its position on the substantive issue raised and, for that reason, it appealed the judgment of the Chamber.

On June 4, 2021, tgs filed an extraordinary federal appeal against the judgment of the Chamber, which was contested by ENARGAS and the National State, and was granted by the Court of Appeals itself on July 14, 2021, on the understanding that “At stake is the interpretation and scope of regulations of an unquestionable federal nature, such as Decree 2067/08 and MINPLAN Resolution No. 1451/2008, ENARGAS Resolutions No. 1982/11 and 1991/11, as well as articles 53 and 54 of Law 26,784”.

By virtue of the precautionary measure issued, and its 12 extensions obtained, as well as the favorable judgment obtained in the first instance, the existence of favorable precedents issued by the Supreme Court of Justice of the Nation (“Supreme Court”) with respect to other processors of natural gas and the granting of the extraordinary appeal that will give rise to the Supreme Court ruling on the case, the management of tgs and its legal advisors consider that they have solid arguments to defend their position and that it is probable that a favorable resolution will be obtained for their interests on the substantive issue raised. Therefore, no provision has been made for the eventual debt due to the increase in the charge to finance the importation of natural gas applicable to natural gas consumption related to the processing activity at the Cerri Complex for the period between the date of obtaining the measure precautionary and on April 1, 2016, date of entry into force of Resolution No. 28/2016.

This resolution has annulled the acts that determined the value of the charge established by Decree 2067, for which as of April 1, 2016, ENARGAS and the agency in charge of its collection have stopped charging the increase established by the Resolutions.

Regarding the last extension of the precautionary measure, expired on July 1, 2021, tgs has not requested a new extension, due to the premature procedural stage in which the appeal filed against the judgment of the Chamber is found. On December 16, 2024, the file was sent to the Attorney General’s Office, with no news received as of the date of issuance of these Financial Statements.

Given the complex procedural instance, the nature of charge 2067, the background information presented in this and other legal cases initiated against charge 2067, at the date of the issuance of these Consolidated Financial Statements it is not possible to make a definitive quantification of the amount that should be pay tgs in the event of not obtaining a favorable ruling from the Supreme Court, while an eventual request for payment in the current circumstances may be challenged and questioned by tgs within the framework of the corresponding administrative and judicial instances, where the amount may be debated of the charge that is eventually required to tgs .

F-78
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
b)
Environmental matters

The Company is subject to extensive environmental regulations in Argentina. Management believes that its current operations are in material compliance with applicable environmental requirements, as currently interpreted and enforced. The Company has not incurred in any material environmental liabilities as a result of its operations to date. As of December 31, 2024 and 2023, the total amount of these provisions amounted Ps. 91,087 and Ps. 176,639 , respectively.

c)
Others

In addition to the matters discussed above, the Company is a party to certain lawsuits and administrative proceedings which involve taxation, labor claims, social security, administrative and others arising in the ordinary course of business. The Company’s Management and its legal advisors estimate that the outcome of these differences will not have significant adverse effects on the Company’s financial position or results of operations. As of December 31, 2024 and 2023, the total amount of these provisions amounted Ps. 330,008 and Ps. 366,714 , respectively.

21.
BALANCES AND TRANSACTIONS WITH RELATED COMPANIES

Technical, Financial and Operational Assistance Agreement

Pampa Energía is tgs’ technical operator, according to the approval of ENARGAS in June 2004, and subject to the terms and conditions of the Technical Assistance Agreement which provides that Pampa Energía is in charge of providing services related to the operation and maintenance of the natural gas transportation system and related facilities and equipment, to ensure that the performance of the system is in conformity with international standards and in compliance with certain environmental standards. For these services, the Company pays a monthly fee based on a percentage of the operating income of the Company.

The Ordinary and Extraordinary General Shareholders´ Meeting held on October 17, 2019 ratified the proposal approved by the Board of Directors at its meeting on September 17, 2019 made to Pampa Energía that implies an extension in the contract and a modification in the determination of the remuneration received by Pampa Energía.

Such modifications, without implying a modification in the scope of the tasks performed, mean a progressive reduction over the years in the remuneration that Pampa Energía will receive in its role of Technical Operator.

According to the modifications made, tgs will pay Pampa Energía the greater of: (i) an annual fixed sum of US$ 0.5 million or (ii) the variable compensation that arises from applying to comprehensive income before results and income taxes for the year but after deducting also the above fixed amount) the following scheme:

•
From 12/28/2019 to 12/27/2020: 6.5 %
•
From 12/28/2020 to 12/27/2021: 6 %
•
From 12/28/2021 to 12/27/2022: 5.5 %
•
From 12/28/2022 to 12/27/2023: 5 %
•
From 12/28/2023 to 12/27/2024 and onwards: 4.5 %

F-79
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
Commercial transactions

In the normal course of its activity, tgs celebrated with Pampa Energía and other companies related to it, agreements to transfer natural gas and its richness. The price, which is denominated in US dollars, is determined according to common market practices.

In addition, in the normal course of business, tgs carries out liquid sales, natural gas transportation services and other services with its associated companies, Pampa Energía and related companies.

Lease agreement with Pampa Energía

As mentioned in Note 13 to these Consolidated Financial Statements, on August 11, 2016, the Company entered into a finance lease agreement with Pampa Energía (formerly Petrobras Argentina).

Key management compensation

The accrued amounts corresponding to the compensation of the members of the Board of Directors, the Statutory Committee and the Executive Committee for the years ended December 31, 2024, 2023 and 2022 were Ps. 3,541,956 , Ps. 3,430,226 and Ps. 2,895,727 , respectively.

Balances and transactions with related parties

The detail of significant outstanding balances for transactions entered into by tgs and its related parties as of December 31, 2024 and 2023 is as follows:

2024
2023
Company
Accounts
receivable
Accounts
payable
Accounts
receivable
Accounts
payable
Company which exercises joint control on the controlling shareholder:
Pampa Energía (1)
13,211,443
21,871,747
14,376,077
36,873,815
Associates with significant influence:
Link
29,595
-
38,019
-
TGU (liquidated)
-
-
-
280,225
Other related companies:
Comercializadora e Inversora S.A.
-
-
83,399
121,255
CT Barragan S.A.
30,807
-
33,880
-
SACDE Sociedad Argentina de Construcción y Desarrollo Estratégico S.A. (2)
2,257,463 11,159,046 24,051 8,799,269
Transener S.A.
48,625
-
133
-
Total
15,577,933
33,030,793
14,555,559
46,074,564

(1)
Accounts payable includes Ps. 11,540,062 and Ps. 32,114,859 corresponding to the financial leasing recorded as “Loans” as of December 31, 2024 and 2023, respectively.
(2)
Accounts receivable as of December 31, 2024 includes Ps. 2,120,362 recorded in “Other Credits”.

As of December 31, 2024 and 2023, tgs has a balance of Ps. 20,471,497 and Ps. 21,739,106 corresponding to Dollar linked notes issued by CT Barragán S.A. and Pampa Energía. The book value of the notes is disclosed within the caption “Financial assets at fair value through profit or loss”.

The detail of significant transactions with related parties for the years ended December 31, 2024, 2023 and 2022 is as follows:

F-80
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)

Year ended December 31, 2024 :

Revenues
Costs
Financial results

Company
Natural Gas Transportation
Liquids Production and Commercialization
Midstream
Gas
purchase
and others
Compensation
for technical assistance
Revenues from administrative services and others
Interest
expense
Interest gain
/ Gain / (loss)
on fair value
Selling
expenses (1)
Controlling shareholder:
CIESA
-
-
-
-
-
145
-
-
-
Company which exercises joint control on the controlling
shareholder:
Pampa Energía
17,086,616
16,099,079
49,612,454
34,550,518
26,405,660
-
1,365,343
-
-
Associates with significant influence:
Link
-
-
302,193
-
-
-
-
-
-
Other related companies:
SACDE Sociedad Argentina de Construcción y Desarrollo Estratégico S.A.
-
-
217,663
-
-
-
-
-
-
Transener S.A.
-
-
376
-
-
-
-
-
-
CT Barragán S.A.
-
-
128,844
-
-
-
-
784,372
-
Comercializadora e Inversora S.A. (2)
2,107,038
-
-
-
-
-
-
-
-
Fundación TGS
-
-
-
-
-
-
-
-
540,845
Total
19,193,654
16,099,079
50,261,530
34,550,518
26,405,660
145
1,365,343
784,372
540,845
(1) Corresponds to donations expenses.
(2) On October 3, 2024, it was merged with Pampa Energía.

Additionally, during the year ended December 31, 2024, the Company received from SACDE Sociedad Argentina de Construcción y Desarrollo Estratégico S.A., construction engineering services for Ps. 131,330,449 which are capitalized within the balance of property, plant and equipment.

Year ended December 31, 2023 :
Revenues
Costs
Financial results
Company
Natural Gas Transportation
Liquids
Production and Commercialization
Midstream
Gas purchase
and others
Compensation
for technical
assistance
Revenues for administrative
services
Interest
expense
Interest gain
/ Gain / (loss)
on fair value
Selling
expenses (1)
Controlling shareholder:
CIESA
-
-
-
-
-
477
-
- -
Company which exercises joint control on the controlling
shareholder:
Pampa Energía
7,536,340
18,740,254
38,397,233
35,979,882
13,236,442
-
1,998,012
- -
Associates with significant influence:
Link
-
-
307,484
-
-
-
-
- -
Other related companies:
SACDE Sociedad Argentina de Construcción y Desarrollo Estratégico S.A.
-
-
116,001
-
-
-
-
- -
Transener S.A.
-
-
1,291
-
-
-
-
- -
CT Barragán S.A.
-
-
130,421
-
-
-
-
14,830,319 -
Comercializadora e Inversora S.A.
1,525,447
-
-
-
-
-
-
- -
Fundación TGS
-
-
-
-
-
-
-
- 308,040
Total
9,061,787
18,740,254
38,952,430
35,979,882
13,236,442
477
1,998,012
14,830,319 308,040
(1) Corresponds to donations expenses.

Year ended December 31, 2022 :


Revenues
Costs
Financial results
Company
Natural Gas Transportation
Liquids
Production and Commercialization
Midstream
Gas purchase
and others
Compensation
for technical assistance
Revenues from administrative services and others
Interest
expense
Interest gain /
Gain / (loss)
on fair value
Selling
expenses (1)
Controlling shareholder:


CIESA
-
-
-
-
-
1,098
-
- -
Company which exercises joint control on the controlling
shareholder:
Pampa Energía
9,978,132
24,299,050
26,941,047
39,509,571
20,799,669
-
2,594,867
- -
Associates with significant influence:
Link
-
-
317,027
-
-
-
-
- -
Other related companies:
SACDE Sociedad Argentina de Construcción y Desarrollo Estratégico S.A.
-
-
48,847
-
-
-
-
- -
Transener S.A.
- - 2,829 - - - - - -
CT Barragán S.A.
-
-
118,396
-
-
-
-
653,774 -
Comercializadora e Inversora S.A.
2,024,688
-
-
-
-
-
-
- -
Fundación TGS
-
-
-
-
-
-
-
- 210,621
Total
12,002,820
24,299,050
27,428,146
39,509,571
20,799,669
1,098
2,594,867
653,774 210,621
(1) Corresponds to donations expenses.

F-81
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
22.
CONTRACTUAL OBLIGATIONS

a)
Contractual Commitments

As of December 31, 2024, the Company had the following contractual commitments:

Estimated maturity date
Total
Due less than
one year
As of
12/31/2025
From
01/01/2026 to
12/31/2026
From
01/01/2027 to
12/31/2027
From
01/01/2028 to
12/31/2028
From
12/31/2029
onwards
Financial indebtedness (1)
859,736,345
-
96,159,545
42,982,800
42,982,800
42,982,800
634,628,400
Purchase obligations (2)
38,710,031
-
33,753,415
4,435,665
520,951
-
-
Financial Leases
14,796,029
-
8,496,477
5,432,722
866,830
-
-
Total
913,242,405
-
138,409,437
52,851,187
44,370,581
42,982,800
634,628,400
(1)
Corresponds to the cancellation of principal and interest of the financial indebtedness. For further information, see Note 13.
(2)
Corresponds to purchase of natural gas contracts for the processing of liquids.

The totality of the financial indebtedness of tgs and the obligations corresponding to gas purchases are denominated in U.S. dollars which have been translated into Argentine pesos at the exchange rate as of December 31, 2024 (US$ 1.00 = Ps. 1,032.00 ). The amounts to be paid in pesos could vary depending on the actual fluctuations in the exchange rate.

For further information, see Note 17.a).

b)
Guarantees granted and goods for restricted availability

The Company has not granted any additional guarantees or goods of restricted availability other than those set out in the remaining notes.

23.
ASSOCIATES AND JOINT AGREEMENT

Associates with significant influence

Link:

Link was created in February 2001, with the purpose of the operation of a natural gas transportation system, which links TGS’s natural gas transportation system with the Cruz del Sur S.A. pipeline. The connection pipeline extends from Buchanan (Buenos Aires province), located in the high-pressure ring that surrounds the city of Buenos Aires, which is part of TGS’s pipeline system, to Punta Lara. tgs ’s ownership interest in such company is 49 %, while Pan American Sur S.A. holds a 20.40 %, Shell Argentina S.A. a 25.50 % and Wintershall Dea Argentina S.A. the remaining 5.10 %.


TGU (liquidated):

TGU was a company incorporated in Uruguay. This company rendered operation and maintenance services to Gasoducto Cruz del Sur S.A. and its contract terminated in 2010. TGS held 49 % of its common stock and Pampa Energía the remaining 51 %.

On December 26, 2024, the TGU board decided to dissolve and liquidate said company.

F-82
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
EGS (liquidated):

In September 2003, EGS, a company registered in Argentina, was incorporated. The ownership was distributed between tgs ( 49 %) and TGU ( 51 %).

EGS owned a natural gas pipeline, which connects tgs ’ main pipeline system in the Province of Santa Cruz with a delivery point on the border with Chile.

Since 2012 EGS discontinued its operations, deciding in January 2016 to begin the necessary steps to dissolve EGS. The Extraordinary Shareholders’ Meeting of EGS held on March 10, 2016, appointed the liquidator.

The EGS Liquidator Board held on March 31, 2023, reported the Final Distribution Project of the remainder of the liquidation. On June 26, 2023, the Extraordinary General Assembly of EGS approved the final liquidation balance for the irregular fiscal year closed on March 31, 2023 and approved the cancellation of the social registration of EGS before the General Inspection of Justice. As of the date of issuance of these consolidated financial statements, the distribution project was executed by the liquidator. As of the date of issuance of these Consolidated Financial Statements, the IGJ registered the liquidation and canceled it from the registry.

Joint Agreement

UT:

The Board of Directors of tgs approved the agreement to set up the UT together with SACDE. The objective of the UT is the assembly of pipes for the construction of the project of “Expansion of the System of Transportation and Distribution of Natural Gas” in the Province of Santa Fe, called by National Public Bid No. 452-0004-LPU17 by the MINEM (the “Work”).

On October 27, 2017, tgs - SACDE UT signed the corresponding work contract with the MINEM.

The UT will remain in force until its purpose has been fulfilled, i.e., once the works involved in the Project have been completed and until the end of the guarantee period, set at 18 months from the provisional reception.


As a result of the situation of the economic context and the COVID mentioned in Note 1, the UT sent a letter to Integración Energética Argentina S.A . (“IEASA”), currently Energía Argentina S.A. (“ENARSA”), a company currently part of the Ministry of Productive Development, requesting, among other issues, the reestablishment of the economic-financial equation, readjustment of the work schedule, approval of cost redeterminations and price adjustments under the current legal regime.



On July 9, 2021, the UT and IEASA signed a restart order and a restart certificate for the works related to the Work, through which the work schedule was readjusted and IEASA also assumed the commitment to manage and join efforts to guarantee the cash flow in order to avoid new effects on the economic-financial structure of the contract for the Work, which would give rise to new requests -by the UT- for the recomposition of the economic-financial equation of the contract and the schedule of execution of the Work.

F-83
TRANSPORTADORA DE GAS DEL SUR S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND COMPARATIVE INFORMATION
(Stated in thousands of pesos as described in Note 3 and 4.d., unless otherwise stated)
24.
SUBSEQUENT EVENTS

The financial statements were authorized for issuance by the Board of Directors on April 24, 2025. There are no subsequent events between the closing date of year ended December 31, 2024, and the approval (issuance) of these consolidated financial statements, other than the ones already disclosed therein.

Cerri Complex Climate Event

On March 7, 2025, unprecedented heavy rains—without any statistical precedent in the last 100 years—fell on the city of Bahía Blanca and surrounding areas, causing widespread flooding across urban and adjacent regions (the “Event”).

The Event caused the Saladillo García stream to overflow, flooding the Cerri Complex, which resulted in the paralysis of liquids production and partially affected natural gas transportation services. It is also worth noting that the external electric distribution system, as well as the electric generation and distribution facilities of the installation, were impacted .

On March 24, 2025, the natural gas transportation service was restored with no significant impact in the natural gas transportation revenues.

Regarding the Cerri Complex, as previously mentioned, Liquids production has been interrupted between March 7, 2025 and the issuance date of these consolidated financial statements. A gradual resumption of operations and production may be possible in the coming days, depending on the resolution of infrastructure issues. TGS is carrying out cleanup efforts and prioritizing getting the plant back to full operation as soon as possible.

The Company is currently assessing the full impact of these events and implementing measures to minimize disruption. Based on the current state of recovery efforts and the damages, for the three-month period ended March 31, 2025, the Company has recorded a loss of Ps. 14,058,433 , corresponding to expenses related to the event and impairment charges for materials and other property, plant, and equipment. At this stage, the final cost of the event has not yet been determined. For reference, January to March daily production of liquids average amounts to approximately 3,400 tons .

Subject to the terms and conditions of the policies and any applicable sub-limits, the Company has property damage and business interruption insurance coverage. The property damage deductible is US$ 1 million, and the business interruption coverage includes a 60-day waiting period for Liquids Production and Commercialization business segment. As of the date of issuance of these consolidated financial statements, the Company is negotiating with insurers; these negotiations are still at a preliminary stage, so the ultimate amount and timing of insurance proceeds have not been determined yet.

The Company has concluded for the purpose of these consolidated financial statements that the Event is not a condition that existed at the end of the reporting period and therefore does not require adjustments in the book values recognized in the consolidated financial statements prepared for the year ended December 31, 2024.

Voluntary capital reduction and amendment of By-laws.

After having received the approval of the ENARGAS, on March 19, 2025, the 2025 Shareholders´ Meeting will decide regarding the capital stock reduction due to cancellation of tgs’ treasury shares for an amount of Ps. 41,734 representing 41,734,225 class B shares of a nominal value of $ 1 each and entitled to 1 vote per share and the amendment of the by-laws.

After the capital reduction the number of outstanding shares is 752,761,058 of a nominal value of $ 1 each and entitled to 1 vote per share.

F-84
TABLE OF CONTENTS
Part IItem 1. Identity Of Directors, Senior Management and AdvisersItem 2. Offer Statistics and Expected TimetableItem 3. Key InformationItem 4. Our Information B. Business Overview Natural Gas Transportation Regulatory Framework Tariff SituationItem 4 Our Information B. Business Overview Liquids Production and CommercializationItem 4. Our Information B. Business Overview Liquids Production and CommercializationItem 8. Financial Information A. Consolidated Statements and Other Financial Information Legal and Regulatory ProceedingsItem 10. Additional Information D. Exchange ControlsItem 4. Our InformationItem 7. Major Shareholders and Related Party Transactions A. Major ShareholdersItem 5. Operating and Financial Review and ProspectsItem 3. Key Information D. Risk Factors Risks Relating To Our BusinessItem 3. Key Information D. Risk FactorsItem 4. Our Information B. Business Overview Natural Gas Transportation Pipeline Operations Pipeline ExpansionsItem 4. Our Information D. Property, Plant and Equipment Environmental, Social and GovernanceItem 4. Our Information B. Business Overview Natural Gas Transportation The Argentine Natural Gas IndustryItem 5. Operating and Financial Review and Prospects A. Operating ResultsItem 4A. Unresolved Staff CommentsItem 4. Our Information B. Business Overview Natural Gas TransportationItem 3. Key Information D. Risk Factors Risks Relating To ArgentinaItem 4. Our Information B. Business Overview Natural Gas Transportation Regulatory FrameworkItem 8. Financial Information A. Consolidated Statements and Other Financial Information ExportsItem 5. Operating and Financial Review and Prospects A. Operating Results MidstreamItem 6. Directors, Senior Management and EmployeesItem 7. Major Shareholders and Related Party Transactions A. Major Shareholders Shareholders AgreementItem 7. Major Shareholders and Related Party TransactionsItem 4. Our Information A. Our History and Development Controlling Shareholders,Item 4. Our Information B. Business Overview Natural Gas Transportation Pipeline OperationsItem 8. Financial InformationItem 10. Additional Information E. TaxationItem 7. Major Shareholders and Related Party Transactions A. Major Shareholders Repurchase Of SharesItem 10. Additional Information C. Material Contracts Debt ObligationsItem 9. The Offer and ListingItem 10. Additional InformationItem 11. Quantitative and Qualitative Disclosures About Market RiskItem 12. Description Of Securities Other Than Equity SecuritiesPart IIItem 13. Defaults, Dividend Arrearages and DelinquenciesItem 14. Material Modifications To The Rights Of Security Holders and Use Of ProceedsItem 15. Controls and ProceduresItem 16. [reserved]Item 16A. Audit Committee Financial ExpertItem 16B. Code Of EthicsItem 16G. Corporate GovernanceItem 16C. Principal Accountant Fees and ServicesItem 16D. Exemptions From The Listing Standards For Audit CommitteesItem 16E. Purchases Of Registered Equity Securities Of The Issuer By The Issuer and Affiliated PurchasersItem 16F. Change in Registrant S Certifying AccountantItem 16H. Mine Safety DisclosureItem 16I. Disclosure Regarding Foreign Jurisdictions That Prevent InspectionItem 16J. Insider Trading PoliciesItem 16K. CybersecurityPart III Item 17. Financial Statements The Registrant Has Responded To Item 18 in Lieu Of Responding To This ItemPart IIIItem 17. Financial Statements The Registrant Has Responded To Item 18 in Lieu Of Responding To This ItemItem 17. Financial StatementsItem 18. Financial Statements The Following Financial Statements Are Filed As Part Of This Form 20-f:Item 18. Financial Statements

Exhibits

1.1 Corporate Charter and Bylaws.(2) 1.2 Bylaws Amendments.(1) 2.4 Indenture dated July 24, 2024, entered into among tgs, Delaware Trust Company as trustee, co-registrar, paying agent and transfer agent, and Banco Santander Rio S.A., as registrar, Argentine paying agent, Argentine transfer agent and representative of the trustee in Argentina, relating to the issuance of tgss 8.500% senior notes due 2031. 2.5 Officers Certificate establishing the terms of tgs 8.500% senior notes due 2031. 2.6 Description of Securities Registered under Section 12 of the Exchange Act.(3) 3.1 CIESA Shareholders Agreement.(5) 3.2 CIESAs Fourth Amendment to the Restructuring Agreement.(6) 3.3 CIESAs Settlement Agreement.(5) 4.1 Technical Assistance Service Agreement between tgs and Pampa Energa, dated December 26, 2017.(2) 5.1 Financial lease agreement between Petrobras Argentina and tgs, dated July 25, 2016.(7) 8.1 List of tgss Subsidiaries. 11.1 Code of Ethics.(4) 12.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 12.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 13.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 13.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 15.1 Audit Committee Charter.(8) 19.1 Insider Trading Policy 97.1 Clawback Policy(9)