South American Presidents to Discuss Energy Agreement

The respective presidents of Bolivia, Argentina and Brazil - Carlos Mesa, Néstor Kirchner, and Luiz Inácio Lula da Silva - plan to meet in the Bolivian city of Santa Cruz to discuss developing a regional energy bloc based in Bolivia, Bolivia's government news agency ABI reported.

The meeting will occur sometime before July 18, which is the date set for Bolivia's national referendum on gas exports.

Brazil and Argentina are both interested in projects near their respective borders with Bolivia that would add value to Bolivian gas.

Brazil is interested in building a petrochemicals plant and thermoelectric plants near the Bolivian city of Puerto Suárez, while Argentina wants to import Bolivian gas through the Gasoducto del Noreste Argentino (GNA) project to supply gas to northern Argentina.

Bolivia stands to earn some US$500mn a year by exporting gas to Argentina and US$100mn in royalties for the government, ABI reported.

Argentina currently has a contract to import 4mcm/d of gas from Bolivia, but that contract is only for six months.

The GNA project consists of a US$1bn, 1,500km pipeline, which would initially transport 10mcm/d, and could be enlarged to 30mcm/d. Construction should start by July and wrap up in 2006.

Argentina is also interest in building a natural gas liquids separation plant near the border.

Despite the projects depending on the July referendum's success, Bolivia's government is confident that people will "respond in a positive way to export this energy resource and count on more income for the country's multiple needs," deputy hydrocarbons minister Freddy Escobar said.

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