20.

BALANCES AND TRANSACTIONS WITH RELATED COMPANIES

Technical, Financial and Operational Assistance Agreement

Pampa Energía is TGS’s 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. Pursuant to the agreement, Pampa Energía also provides financial advice. For these services, the Company pays a monthly fee based on a percentage of the operating income of the Company. In December 2017, after having obtained the prior approval of ENARGAS, TGS and Pampa Energía renewed the Technical Assistance Agreement for a three-year term as of December 28, 2017, due on December 28, 2020.

For this service, TGS will pay Pampa Energía the higher of: (i) a fixed annual amount of U.S.$ 3.0 million or (ii) 7% of annual comprehensive profits (before financial results and income tax and after deducting also the aforementioned fixed sum) of TGS.

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.

On November 1, 2016, Pampa Energía assigned to YPF the operation of the Río Neuquén area and related contracts, which until that date were disclosed as transactions with related parties in the Other Services business segment.

Financial transactions.

Loan agreement with Pampa Energía

On October 5, 2011, TGS granted a U.S.$26 million loan to Pampa Energía. Proceeds from the loan were used by Pampa Energía to exercise the option contained in the “Call Option Agreement”. Additionally, to guarantee compliance with its obligations, Pampa Energy S.A. created a pledge on the rights that correspond to the arbitration actions of Ponderosa Assets LP and Enron Creditors Recovery Corp. against Argentine Government acquired upon exercise of the option mentioned above. For more information, see Note 17.a.

After several extensions of the maturity, on May 7, 2013, the Board of Directors approved the amendments of certain terms and conditions of the loan granted to Pampa Energía, among others:

•

Extended the expiration date until October 6, 2014, with option of an automatic renewal for one additional period of one year. For this reason, the expiration date was October 6, 2015.

•

The applicable interest rate was equivalent to 6.8% annual plus VAT.

On September 30, 2015, the Board of Directors of the Company approved the acquisition of the Rights of the arbitration proceedings. For further information, see Note 17.a

Financial leasing with Pampa Energía

As mentioned in Note 13 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, 2017 and 2016 were Ps. 52,643 and Ps. 39,409, respectively.

Acquisition of CTG

On August 8, 2017, the Company acquired the entire shareholding of CTG from Pampa Energía for Ps. 100. The purpose of this company is to carry out various activities related to electric power.

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, 2017 and 2016 is as follows:

	2017				2016
Sociedad	Accounts receivable		Accounts payable		Accounts receivable		Accounts payable
Controlling shareholder:
CIESA		39		-		44		-
Associate which exercises joint control on the controlling shareholder:
Pampa Energía ⁽¹⁾		15,681		987,062		114,039		883,781
Associate which exercises significant influence on the controlling shareholder:
Link		520		-		425		-
EGS		-		460		-		602
TGU		-		2,968		-		2,529
Other related companies:
Petrolera Pampa S.A.		-		-		-		2,634
Refinor		-		3,534		-		-
Pampa Comercializadora S.A.		1,882		-		943		-
Petrolera Entre Lomas S.A.		-		-		17		-
Oleoductos del Valle S.A.		1,338		-		297		-
Central Térmica Piedrabuena S.A.		5,189		-		1,224		-
Transener S.A.		30		-		727		-
Total		24,679		994,024		117,716		889,546

⁽¹⁾Accounts payable includes Ps. 891,365 and Ps. 848,181 corresponding to the financial leasing recorded as "Loans" as of December 31, 2017 and 2016, respectively .

The detail of significant transactions with related parties for the years ended December 31, 2017, 2016 and 2015 is as follows:

Year ended December 31, 2017:

			Revenues						Costs				Financial Results
Company	Natural Gas Transportation		Production and commercialization of liquids		Other services		Gas purchase and others		Compensation for technical assistance		Revenues for administrative services		Interests expenses
Controlling shareholder:
CIESA		-		-		-		-		-		92		-
Associate which exercises joint control on the controlling shareholder:										-
Pampa Energía		27,681		57,234		70,492		135,833		354,518		-		65,076
Jointly control entity:
UT		-		-		-		-		-		1,397		-
Associates with significant influence:
Link		-		-		4,587		-		-		-		-
Other related companies:
Petrolera Pampa S.A.		-		-		-		24,850		-		-		-
Refinor S.A.		-		-		-		3,534		-		-		-
Petrolera Entre Lomas S.A.		-		-		-		11,017		-		-		-
Oleoductos del Valle S.A.		4,618		-		958		-		-		-		-
Pampa Comercializadora S.A.		6,647		-		-		-		-		-		-
Central Térmica Piedrabuena S.A.		11,031		-		-		-		-		-		-
Central Térmica Loma La Lata S.A.		-		-		244		-		-		-		-
Experta ART		-		-		-		7,326		-		-		-
Total		49,977		57,234		76,281		182,560		354,518		1,489		65,076

Year ended December 31, 2016:

			Revenues						Costs				Financial Results
Company	Natural Gas Transportation		Production and commercialization of liquids		Other services		Gas purchase and others		Compensation for technical assistance		Revenues for administrative services		Interests expenses
Controlling shareholder:
CIESA		-		-		-		-		-		122		-
Associate which exercises joint control on the controlling shareholder:
Pampa Energía ⁽¹⁾		21,653		1,140		178,056		81,421		168,008		-		24,464
Associates with significant influence:
Link		-		-		3,924		-		-		-		-
Other related companies:
Compañía Mega S.A.⁽²⁾		1,641		82,590		17		-		-		-		-
Experta ART		-		-		-		2,346		-		-		-
Braskem Netherlands BV ⁽²⁾		-		19,511		-		-		-		-		-
Petroleo Brasileiro ⁽²⁾		-		265,236		-		-		-		-		-
Petrolera Pampa S.A.		-		-		-		165,771		-		-		-
WEB S.A.		-		-		-		3,325
Oleoductos del Valle S.A.		2,418		-		-		-		-		-		-
Pampa Comercializadora S.A.		3,603		-		-		-		-		-		-
Petrouruguay S.A. ⁽²⁾		551		51		-		-		-		-		-
Central Térmica Piedrabuena S.A.		7,618		-		-		-		-		-		-
Petrolera Entre Lomas S.A.		-		-		188		24,740
Total		37,484		368,528		182,185		277,603		168,008		122		24,464

⁽¹⁾	Until July, 27, 2016 includes transactions with P etrobras Argentina S.A. From that date, as a consequence of the merger between P ampa Energía and P etrobras Argentina, includes transactions with both parties.

⁽²⁾	As of July 27, 2016, those companies are not considered as related parties due to the acquisition of P etrobras Argentina shares by P ampa Energía as described in Note 1.

Year ended December 31, 2015:

			Revenues						Costs				Financial Results		Other operating income
Company	Natural Gas Transportation		Production and commercialization of liquids		Other services		Gas purchase and others		Compensation for technical assistance		Revenues for administrative services		Interests earned		Acquisition of the rights of the arbitration procedding⁽¹⁾
Controlling shareholder:
CIESA		-		-		-		-		-		122		-		-
Associate which exercises joint control on the controlling shareholder:
Petrobras Argentina		27,681		2,414		99,481		112,135		52,481		-		-		-
Associate which exercises significant influence on the controlling shareholder:
Pampa Energía		-		-		-		-		-		-		11,348		324,390	⁽¹⁾
Associate with significant influence:
Link		-		-		3,087		-		-		-		-		-
Other related companies:										-		-		-		-
Compañía Mega S.A.		1,176		63,591		30		-		-		-		-		-
Petrobras Global Trading BV		-		44,058		-		-		-		-		-		-
Braskem Netherlands BV		-		132,101		-		-		-		-		-		-
Petroleo Brasileiro		-		95,618		-		-		-		-		-		-
Petrolera Pampa S.A.		-		-		-		41,332		-		-		-		-
Total		28,857		337,782		102,598		153,467		52,481		122		11,348		324,390

⁽¹⁾	See Note 17.a)