Bolivia, Argentina agree to build $1.2 billion gas pipeline

Rio de Janeiro (Platts)--15Aug2006

The governments of Bolivia and Argentina agreed late Monday to build a
new, $1.2 billion gas pipeline linking southern Bolivia to northern Argentina,
in a plan to boost gas exports to Argentina to as much as 27.5 million cubic
meters per day, from 5-6 million cu m/d now, Bolivia's government news agency
ABI reported.
An international contract tender will be carried out in December to
determine which companies will engineer and build the pipeline, Bolivia's
Vice-president Alvaro Garcia and Argentine Planning Minister Julio de Vido
said at a meeting in Santa Cruz, eastern Bolivia, according to ABI.
In addition, the countries agreed to build a $250 million gas separation
plant near the Bolivia-Argentina border, he said. The projects are to be
funded solely by Argentina, the report said.
It wasn't immediately clear when the new pipeline could be operational,
although past estimates have forecast build-time of around two years. The
existing pipeline linking gas-rich southern Bolivia to Argentina has a maximum
capacity of around 7.5 million cu m/d.
Argentina agreed to begin paying in mid-July $5.00/MMBtu for Bolivian
gas, up from earlier prices of around $3.30/MMBtu, until the end of the year.
Bolivia hopes to implement a further price increase on the gas it sells to
Argentina next year in a new long-term contract.
Argentina is looking to boost Bolivian gas imports to fuel surging gas
demand even as Brazil, the region's largest economy, cancels its earlier plans
to more than double Bolivian gas imports. Brazil's retreat comes due to the
higher costs of producing and exporting Bolivian gas following a May 1
nationalization of the Andean country's energy industry.

 

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