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Argentina's largest electricity provider, Pampa Energia SA (PAMP.BA, PAM), said Monday it will pay $29 million to acquire Enron Pipeline Company Argentina SA.

"The purchase is part of Pampa's broader plan to become an important player in Argentina's natural gas industry," a person familiar with the company's plans said.

The pipeline company owns 10% of Compania de Inversiones de Energia SA, or Ciesa, which controls 55.3% of the gas distributor Transportadora de Gas del Sur SA, or TGS.

The acquisition of the company, which has been up for sale since its parent company, Enron, filed for bankruptcy, depends on regulatory approval.

Earlier this month, Pampa moved to expand its control over the country's power grid, putting up $276 million to buy a handful of electricity companies from U.S.-based Ashmore Energy International, or AEI.

Pampa Energia will take a 90% stake in Empresa Distribuidora de Energia Norte SA, or Eden, which has the concession for the north and central areas of Buenos Aires province.

Pampa will also get a 77.2% stake in Empresa Distribuidora Electrica Regional SA (EMDE.BA), or Emdersa, which controls regional power providers in San Luis, La Rioja and Salta provinces.

Pampa said it will pay $140 million for the four companies and $136 million for all the bonds defaulted on eight years ago by Ciesa.

Pampa has a controlling interest in electricity distributor Edenor SA (EDN, EDN.BA), which provides power to the northern areas of the capital Buenos Aires.

"The company has spent a lot on electricity and it's looking to diversify," the person said.

Purchasing the pipeline company would put Pampa on roughly equal footing with Brazil's Petroleo Brasileiro SA (PBR), which owns 50% of Ciesa through its local unit Petrobras Argentina SA (PESA.BA).

Last month Pampa said it had partnered with Petrobras Argentina to develop a gas field in the province of Neuquen that will guarantee the fuel supply of its massive Loma de la Lata electricity generation plant.

The two companies have entered into an agreement to develop the El Mangrullo field, under which Pampa Energia will acquire rights to 43% of the hydrocarbons produced at the field in exchange for investing $16 million to drill wells.

-By Taos Turner, Dow Jones Newswires; 5411-4103-6728; taos.turner@dowjones.com