Transportadora de Gas del Sur SA Q2 FY2021 earnings call

• COVID-19 vaccination in Argentina: Over 55% of population has at least one dose, over 15% two doses; mass vaccination easing restrictions and aiding economic recovery. • Tariff situation: ENARGAS notified no tariff adjustment since May, with interim conditions until Dec 2022; TGS filed administrative claims for pending semiannual tariff adjustment. • Q2 results: Net income ARS3.4 billion (higher than Q2 2020's ARS2.6 billion); Total EBITDA down ARS473 million, offset by Liquids EBITDA increase; Financial results positive due to foreign exchange rate variation. • Natural Gas Transportation: Revenue loss from 50% annual inflation not compensated by tariff adjustment, causing margin deterioration. • Liquids business: Higher international prices, increased ethane and propane volumes contributed to EBITDA growth. • Other Services: Higher midstream services revenues from Vaca Muerta operations.

For the Natural Gas Transportation business, EBITDA decreased by ARS2.4 billion. This was due to a ARS2.3 billion revenue loss from lack of tariff adjustment, with operating costs up almost 3%. Revenues from transportation contracts were 80% of total business revenues. For the Liquids business, EBITDA grew by approximately ARS1.8 billion to almost ARS4.4 billion, driven by higher international prices (which more than doubled, generating additional revenues of ARS 4.2 billion), higher ethane and propane volumes. The Other Services business saw EBITDA increase by 15% due to higher midstream services revenues, mostly from Vaca Muerta operations.

• Liquids prices: Expect lower prices in spring/summer as seasonal; winter (July-Aug-Sept) prices higher. • Plan Gas 4: Expectations for next year depend on government fulfilling obligations under the plan, potentially leading to additional volumes. • Non-regulated projects: Working on expansion of analyzing projects for conditioning plant in Vaca Muerta, including building a processing plant.

• Lack of tariff adjustments since April 2019 leading to continuous deterioration of operating margins in Natural Gas Transportation. • Foreign exchange rate fluctuations impacting financial results. • Dependence on government fulfilling obligations under Plan Gas 4 for future volumes and business performance.

Q: Why was there so much liquids in the internal market when production was almost same as first quarter? And regarding natural gas procurement contracts, what to expect for next quarters?

A: Regarding liquids, higher domestic demand due to lower pandemic impact last year and unregulated butane prices; contracts signed for next year, some for 3 years, prices below Argentina gas plant price.

Q: About Liquids business, expectations for rest of 2021? Price of regulated butane? And Plan Gas 4 trunk-like upgrade expectations?

A: Liquids prices to be lower in spring/summer, higher in winter; regulated propane price around $120 per ton; Plan Gas 4 volumes growing, expectations for next year depend on government fulfilling obligations under the plan