TGS Transportadora De Gas Del Sur SA

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

_____________

FORM 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities and Exchange Act of 1934

For August 18, 2023

Commission file number: 1-13.396

Transportadora de Gas del Sur S.A.

Cecilia Grierson 355, Twenty Sixth Floor

1107 Capital Federal

Argentina

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  X  Form 40-F   

Indicate by check mark if registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): __

Indicate by check mark if registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): __

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to the Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes   No X  

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

TRANSPORTADORA DE GAS DEL SUR S.A.

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2023 ⁽¹⁾

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the Company's consolidated financial statements as of June 30, 2023 and December 31, 2022, and for the six-month periods ended June 30, 2023 and 2022. These condensed interim consolidated financial statements have been prepared in accordance with and complied with IAS 34 issued by the International Accounting Standards Board (“IASB”) adopted by the Comisión Nacional de Valores ("CNV") through the provisions of Title IV, Chapter I, Section I, Article 1 – B.1 of the Rules of the CNV ("New Text 2013" or "NT 2013").

The condensed interim consolidated financial statements of the Company for the six-month periods ended June 30, 2023, 2022, 2021, 2020 and 2019 have been subject to a limited review performed jointly by Price Waterhouse & Co. S.R.L. and Pistrelli, Henry Martin and Asociados S.R.L.

Effects of inflation

On December 3, 2018, Law No. 27,468 was enacted, sanctioned on November 15, 2018, by the National Argentine Congress. Among other measures, this law abolishes Presidential Decree No. 1,269/02 —amended by Presidential Decree No. 664/2003 — through which the controlling entities (among them the CNV) had been instructed not to accept inflation adjusted financial statements. On December 26, 2018, the CNV issued Resolution No. 777/2018, by virtue of which it instructs companies that offer their shares to the public to apply the financial statements restatement method to a stable currency in line with the provisions of IAS 29 “Financial Reporting in Hyperinflationary Economies”.

In accordance with such standards, the restatement of financial statements was restarted as from July 1, 2018. In line with the restatement method, non-currency assets and liabilities are restated by an overall price index issued by the Argentine Federation of Professional Councils in Economic Sciences (“Argentine Federation”) since their acquisition date or last inflation adjustment (March 1, 2003).

Likewise, comparative information included in the financial statements has also been restated, but this fact has not modified the decisions based on the financial information corresponding to those fiscal years.

For further information, see “Note 4. Significant Accounting Policies – d) Restatement to constant currency – Comparative Information” to the consolidated financial statements as of December 31, 2022.

Rounding

Certain figures included in this press release have been rounded for ease of presentation. Percentage figures included in this press release 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 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.

This positive variation is mainly due to the higher gain generated by financial assets measured at fair value and the loss recognized in 6M2022 from the repurchase of notes and derivative financial instruments transactions. These effects were partially offset by the higher negative foreign exchange loss, net, and the negative loss on net monetary position recorded in 2023 as opposed to the gain in the 2022 period.

2.Liquidity  

The Company’s primary sources and application of funds during 6M2023 and 6M2022 are shown in the table below:

During 6M2023 the net variation in cash and cash equivalents was positive by Ps. 6,351 million.

Cash flow from operations amounted to Ps. 50,374 million. This cash flow was Ps. 19,639 million higher than in 6M2022 due to the drop in operating income and the lower payment of income tax. These effects were offset by the increase in working capital.

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Cash flows used in investing activities amounted to (Ps. 43,815) million, Ps. 10,067 million higher than funds applied in 6M2022 due to higher payments for acquisitions of PPE in connection with the expansion of the Tratayén Plant in Vaca Muerta and lower placements of funds. This effect was partially offset by lower acquisitions of investments not considered as funds.

Cash flows used in financing activities were Ps. 208 million.

3.Second Quarter 2023 (“2Q2023”) vs. Second quarter 2022 (“2Q2022”) 

The following table presents a summary of the consolidated results of operations for the three-month periods ended June 30, 2023 (“2Q2023”) and June 30, 2022 (“2Q2022”):

During 2Q2023, the Company obtained comprehensive income of Ps. 12,101 million, compared to comprehensive income of Ps. 11,439 million obtained in the same period of 2022.

Total revenues for 2Q2023 decreased Ps. 3,751 million compared to the same period of the previous year.

Revenues from the Natural Gas Transportation segment in 2Q2023 decreased by Ps. 4,207 million, compared to 2Q2022. This negative variation was due to the fact that the tariff increases received effective March 1, 2022, of nominal 60% and effective April 29, 2023, of nominal 95% did not offset the negative effect that the variation in the Consumer Price Index ("CPI") had on inflation-adjusted revenues.

As for the Liquids Production and Commercialization segment, revenues decreased by Ps. 1,212 million in 2Q2023, mainly due to the drop in international reference prices and the decrease in the exchange rate measured in constant currency. These effects were partially offset by the higher tons of propane and butane sold and the increase in the price of ethane.

With respect to the total volumes dispatched from the Cerri Complex, which increased by 24% or 55,475 tons, the increase in the tons of propane and butane exported and ethane shipped to PBB Polisur S.R.L. was offset by the decrease in propane and butane deliveries to the domestic market.

The breakdown of volumes dispatched by market and product and revenues by market is included below:

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The Other Services segment reported an increase of Ps. 1,668 million, mainly explained by higher natural gas transportation and conditioning services in Vaca Muerta. This effect was partially offset by the negative variation of the exchange rate in constant currency.

Cost of sales and administrative and commercialization expenses for 2Q2023 amounted to Ps. 41,509 million (compared to Ps. 40,218 million in 2Q2022), an increase of Ps. 1,290 million. This variation is mainly due to higher: (i) costs of natural gas processed at Cerri Complex (higher consumption partially offset by the lower price expressed in constant currency), (ii) repair and maintenance expenses of PPE, and (iii) export taxes due to the drop in exported volumes. These effects were partially offset by lower depreciation, turnover tax due to the decrease in revenues, and labor costs.

The following table shows the main components of operating costs, administrative and commercialization expenses and their main variations for 2Q2023 and 2Q2022:

In 2Q2023, financial results suffered a positive variation of Ps. 6,873 million, compared to those registered in the 2022 period. This variation is mainly due to the higher positive result generated by financial assets for Ps. 13,253 million. This effect was partially offset by higher loss due to exchange rate of Ps. 5,331 million (due to the higher exchange rate variation during 2Q2023) and the lower gain from monetary results of Ps. 1,505 million.

4.Consolidated Financial Position Summary 

Summary of the consolidated financial position information as of June 30, 2023, and December 31, 2022, 2021, 2020 and 2019:

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5.Consolidated Comprehensive Income Summary  

Summary of the consolidated comprehensive income information for the six-month periods ended June 30, 2023, 2022, 2021, 2020 and 2019:

6.Consolidated Cash Flow Summary 

Summary of the consolidated cash flow information for the six-month periods ended June 30, 2023, 2022, 2021, 2020 and 2019:

7.Statistical Data (Physical units) 

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8.Comparative Ratios 

9.TGS share market value in Buenos Aires Stock Exchange at closing of last business day (in Argentine Pesos per share) 

10.Outlook 

The future of natural gas as an essential fuel for the country's energy matrix is consolidated year after year, which will make Argentina a sustainable country with high growth. We have consolidated ourselves as an integrated service provider in the hydrocarbon industry.

Our strategy aims to position ourselves in a leading role, carrying out vital undertakings for the future of the country, thus consolidating the growth strategy with a leap of magnitude. With this objective, we are adopting an innovative vision, seeking new business opportunities for our clients with a focus on Vaca Muerta.

We also expect to continue executing our growth plan in the area, which currently includes the completion during August 2023 of the extension of the northern section of the Vaca Muerta natural gas gathering pipeline system by 32 km (Los Toldos I Sur - El Trapial), with a transportation capacity of 17 million m3/day and an investment of US$ 47 million and, by the first half of 2024, the completion of the expansion of the Tratayén conditioning plant through the installation of 2 conditioning modules, each with a capacity of 6.6 million m³/day, each with a capacity of 6.6 million m³/day, with an estimated investment of US$ 270 million.

The current economic situation and the tariff review process faced by the authorities implies that we must continue to generate valid and constructive channels of dialogue that allow us to manage a profitable and efficient natural gas transportation business in accordance with the country's energy development, considering the needs of the internal and external demands and of our stakeholders.

In this framework, we will be attentive to the talks with the national authorities in order to advance in the concretion of the new RTI process.

In the Liquids Production and Commercialization Segment, the strategy will be aimed at optimizing the production mix that allows prioritizing those products and distribution channels that provide higher margins, and to maximizing access to the RTP at reasonable costs. For this,

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it will be very important to be efficient in the management of our assets, ensuring a coordinated, safe and efficient operation.

In financial terms, and given the aforementioned facts, we will continue to prudently manage our funds in order to preserve our shareholders' value given the volatile macroeconomic context in which our activities will be carried out.

Given our current lack of access to financial markets, we believe that we will have to rely solely on the cash flows generated by our operations to meet our working capital, debt service, and capital expenditures requirements for the foreseeable future.

As regards their daily operations, tgs will remain committed to continuous improvement of each of its processes to optimize the use of the resources and to reduce operating costs. To this end, the Company will carry out actions aimed at the reduction of cost without affecting the reliability and availability of the pipeline system. We will continue with the implementation of various actions, such as the standardization and systematization of risk management in pipelines, compressor stations and processing facilities. Finally, we will deepen training initiatives for the staff for technical and management training resources.

Autonomous City of Buenos Aires, August 7, 2023.

Luis Fallo

Chairman of the Board of Directors

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English translation of the original prepared in Spanish for publication in Argentina

TRANSPORTADORA DE GAS DEL SUR S.A.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND COMPARATIVE INFORMATION

(Stated in thousands of pesos as described in Note 3, unless otherwise stated)

14.LOANS 

Short-term and long-term loans as of June 30, 2023 and December 31, 2022 comprise the following:

Loans are totally denominated in US dollars.

The activity of the loans as of June 30, 2023 and 2022 is the following:

In January 2023, the Company entered into a new financial lease for Ps. 870,765. It is denominated in US dollars, payable in fixed monthly installments until December 2027.

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English translation of the original prepared in Spanish for publication in Argentina

TRANSPORTADORA DE GAS DEL SUR S.A.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND COMPARATIVE INFORMATION

(Stated in thousands of pesos as described in Note 3, unless otherwise stated)

The maturities of current and non-current financial debt, net of issuance costs, as of June 30, 2023 are as follows:

As of the date of issuance of these Interim Condensed Consolidated Financial Statements, the Company and its controlled companies are in compliance with the covenants established in all of their financial debt.

15.INCOME TAX AND DEFERRED TAX 

On June 16, 2021, "Law No. 27,630: Amending the Income Tax Law" was published in the Official Gazette which, among other issues, introduces a change in the income tax rate effective for fiscal years beginning on or after January 1, 2021. The amendment establishes a stepped system of rates in three segments according to the level of accumulated net taxable income: a first step of 25% for accumulated net income up to $5 million pesos; the second step of 30% for accumulated net income between $5 and $50 million pesos; and a last segment of 35% for accumulated net income over $50 million pesos. The amount of accumulated net profits will be adjusted annually, starting January 1, 2022, considering the annual variation of the CPI provided by INDEC.

Likewise, dividends distributed to foreign individuals and beneficiaries will be taxed at a rate of 7%.

For the determination of the deferred and current income tax charge as of June 30, 2023, the Company has applied the progressive tax rate in force as mentioned above.

Previously, the current rate, as provided by Law No. 27,430, was 30% for fiscal years beginning on or after January 1, 2018 and 25% for fiscal years beginning on or after 2022.

The following table includes the income tax expense charged to the statement of comprehensive income in the six-month periods ended June 30, 2023 and 2022:

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English translation of the original prepared in Spanish for publication in Argentina

TRANSPORTADORA DE GAS DEL SUR S.A.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND COMPARATIVE INFORMATION

(Stated in thousands of pesos as described in Note 3, unless otherwise stated)

The composition of the net deferred tax liabilities as of June 30, 2023 and December 31, 2022, is as follows:

16.PROVISIONS 

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English translation of the original prepared in Spanish for publication in Argentina

TRANSPORTADORA DE GAS DEL SUR S.A.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND COMPARATIVE INFORMATION

(Stated in thousands of pesos as described in Note 3, unless otherwise stated)

17.FINANCIAL INSTRUMENTS BY CATEGORY AND HIERARCHY 

17.1 Financial instrument categories

There have been no significant changes regarding the accounting policies for the categorization of financial instruments to the policies disclosed in the financial statements as of December 31, 2022.

The categories of financial assets and liabilities as of June 30, 2023 and December 31, 2022 are as follows:

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English translation of the original prepared in Spanish for publication in Argentina

TRANSPORTADORA DE GAS DEL SUR S.A.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND COMPARATIVE INFORMATION

(Stated in thousands of pesos as described in Note 3, unless otherwise stated)

17.2 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”).  

·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).  

·Level 3: includes financial instruments for which the assumptions used in estimating fair value are not based on observable market information. 

The table below shows different assets at their fair value classified by hierarchy as of June 30, 2023:

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.

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English translation of the original prepared in Spanish for publication in Argentina

TRANSPORTADORA DE GAS DEL SUR S.A.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND COMPARATIVE INFORMATION

(Stated in thousands of pesos as described in Note 3, unless otherwise stated)

As of June 30, 2023, the carrying amount of certain financial instruments used by the Company including cash, cash equivalents, other investments, receivables, payables and short-term loans are representative of fair value.

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 2018 Notes at June 30, 2023, based on their quoted market price:

18.ASSETS AND LIABILITIES IN FOREIGN CURRENCY 

Balances in foreign currencies as of June 30, 2023 and December 31, 2022 are detailed below:

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English translation of the original prepared in Spanish for publication in Argentina

TRANSPORTADORA DE GAS DEL SUR S.A.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND COMPARATIVE INFORMATION

(Stated in thousands of pesos as described in Note 3, unless otherwise stated)

19.REGULATORY FRAMEWORK 

The main regulatory issues are described in Note 17 to the annual consolidated financial statements as of December 31, 2022. As of the date of issuance of these Interim Condensed Consolidated Financial Statements, there were no additional developments except for the following:

Transitional increase in natural gas transportation tariffs

On March 16, 2023, the Board of Directors of tgs approved the proposed addendum to the transitory renegotiation agreement (the "2023 Transitional Agreement") sent by ENARGAS. Such addendum was subsequently ratified by the PEN through Presidential Decree No. 250/2023 of April 29, 2023. Previously, on April 27, 2023, ENARGAS issued Resolution No. 186/2023 through which the new tariff charts in force were published.

The 2023 Transition Agreement has similar conditions to the 2022 Transition Agreement. The 2023 Transition Agreement includes:

·Effective as from April 29, 2023 a transitional tariff increase of 95% on the natural gas transportation tariff and the Access and Use Charge. 

During its term, tgs may not in any case: a) Distribute dividends; nor b) Directly or indirectly prepay financial and commercial debts contracted with shareholders, acquire other companies or grant credits, unless the credits benefit the users or are granted to contractors that do not fall within the assumptions mentioned above. In the event that tgs considers it is appropriate to proceed in the opposite direction to the provisions of paragraph a) above, attaching the corresponding supporting documentation, tgs may request to ENARGAS to submit a status report to the Ministry of Economy, so that the Ministry may authorize or not, and if applicable, determine the manner and form of the requested action. In the event that tgs considers that it is appropriate to proceed in the opposite direction to the provisions of paragraph b) above, it must also submit before ENARGAS, in a documented manner, the grounds that support such decision, for its authorization. In the event that a disguised dividend distribution operation is detected, the request will be forwarded to the Ministry of Economy for its substantiation in that orbit. For such purpose, the Ministry will notify its decision to the applicant and to ENARGAS.

20.COMMON STOCK AND DIVIDENDS 

a)Common stock structure and shares’ public offer 

As of June 30, 2023, tgs’ common stock was as follows:

tgs's shares are traded on the BYMA and under the form of the ADSs (registered with the Securities and Exchange Commission (“SEC”) and representing 5 shares each) on the New York Stock Exchange.

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English translation of the original prepared in Spanish for publication in Argentina

TRANSPORTADORA DE GAS DEL SUR S.A.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND COMPARATIVE INFORMATION

(Stated in thousands of pesos as described in Note 3, unless otherwise stated)

b)Acquisition of treasury shares 

During the six-month period ended June 30, 2023, the Company has not acquired treasury shares.

As of June 30, 2023, the Company holds 41,734,225 treasury shares, representing 5.25% of the total share capital. The acquisition cost of the treasury shares in the market amounted to Ps. 16,461,240 and the Additional paid-up capital amounted to Ps. 4,775,260, which, in accordance with the provisions of Title IV, Chapter III, Article 3.11.c and e of the Rules, restricts the amount of the 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.

In accordance with current exchange regulations and in order to have access to the exchange market, for the payment of dividends to non-resident shareholders of Argentina, the Company must require the prior approval of the BCRA.

21. LEGAL CLAIMS AND OTHER MATTERS

Between January 1, 2023 and the date of issuance of these Condensed Interim Consolidated Financial Statements, there were no news regarding legal claims and other matters. For more information regarding the claims and legal matters of the Company, see Note 20 “Legal claims and other matters” to the Consolidated Financial Statements as of December 31, 2022.

22. BALANCES AND TRANSACTIONS WITH RELATED COMPANIES 

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 six-month periods ended June 30, 2023 and 2022 were Ps. 403,435 and Ps. 390,906, respectively.

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English translation of the original prepared in Spanish for publication in Argentina

TRANSPORTADORA DE GAS DEL SUR S.A.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND COMPARATIVE INFORMATION

(Stated in thousands of pesos as described in Note 3, unless otherwise stated)

Balances and transactions with related parties

The detail of significant outstanding balances for transactions entered into by tgs and its related parties as of June 30, 2023 and December 31, 2022 is as follows:

As of June 30, 2023, tgs holds Ps. 4.232.397 corresponding to dollar-linked notes issued by CT Barragán S.A. that accrue an annual rate above the exchange rate established in BCRA Communication "A" 3500.

The book value of the notes is disclosed within the caption “Other financial assets at fair value through profit or loss”.

The detail of significant transactions with related parties for the six-month periods ended June 30, 2023 and 2022 is as follows:

Six-month period ended June 30, 2023:

Six-month period ended June 30, 2022:

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English translation of the original prepared in Spanish for publication in Argentina

TRANSPORTADORA DE GAS DEL SUR S.A.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND COMPARATIVE INFORMATION

(Stated in thousands of pesos as described in Note 3, unless otherwise stated)

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 has a 49% shareholding in this company, while Pan American Sur S.A. has a 20.40% shareholding, Shell Argentina S.A. has a 25.50% shareholding and Wintershall Dea Argentina S.A. has a 5.10% shareholding.

TGU:

TGU is 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 holds 49% of its common stock and Pampa Energía holds the remaining 51%.

EGS (liquidated company):

In September 2003, EGS, a company registered in Argentina, was incorporated. The ownership is distributed between TGS (49%) and TGU (51%).

EGS owned a natural gas pipeline, which connects TGS’s main pipeline system in the Province of Santa Cruz with a delivery point on the border with Chile.

In October 2012, ENARGAS issued a resolution which authorizes EGS to transfer the connection pipeline and service offerings in operation to TGS. On November 13, 2013, the sale of all the fixed assets of EGS to TGS for an amount of US$ 350,000 was made, the existing natural gas transportation contracts were transferred and the procedures to dissolve the Company were initiated.

The Board of Directors Meeting held on January 13, 2016, approved to initiate the necessary steps for the dissolution of EGS. The Special Shareholders Meeting held on March 10, 2016 appointed EGS’ liquidator.

The liquidating board of directors of EGS held on March 31, 2023 reported the Final Distribution Project of the liquidation proceeds. On June 26, 2023, the Extraordinary General Meeting of EGS approved the final liquidation balance sheet for the irregular fiscal year ended March 31, 2023 and approved the cancellation of the corporate registration of EGS before the General Inspection of Justice. As of the date of issuance of these interim consolidated financial statements, the distribution project was executed by the liquidator. The proceedings for the registration of the liquidation and its cancellation are still pending before the General Inspection of Justice.

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.

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English translation of the original prepared in Spanish for publication in Argentina

TRANSPORTADORA DE GAS DEL SUR S.A.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND COMPARATIVE INFORMATION

(Stated in thousands of pesos as described in Note 3, unless otherwise stated)

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”), 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.

24.INFORMATION REQUIRED BY ARTICLE 26 OF SECTION VII CHAPTER IV TITLE II OF CNV RULES 

In order to comply with General Resolution No. 629/2014 tgs informs that, as of August 7, 2023, supporting and management documentation related to open tax periods is safeguarded by Bank S.A. at its facilities are located at Ruta Panamericana Km 37,5, Province of Buenos Aires.

As for commercial books and accounting records, they are situated in the headquarters of the Company in areas that ensure its preservation and inalterability.

The Company has available in its headquarters to CNV details of the documentation given in safeguard to third parties.

25.SUBSEQUENT EVENTS 

There were no existing significant subsequent events between the closing date of six-month period ended June 30, 2023 and the date of the approval (issuance) of these condensed interim consolidated financial statements.

         Luis Fallo

Chairman of the Board of Directors

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