The two multinationals will continue selling the gas to their own subsidiaries in Argentina, but at a price of US$2.08/mBTU at the border, up from US$1.60/mBTU, Bolivia's hydrocarbons minister Guillermo Torres said. This is the price used to calculate royalties, Argentine newspaper Cronista reported.
Bolivia's wellhead price will increase to US$1.86/mBTU from US$1.37/mBTU, which is a similar price to what Brazil pays for gas imports from Bolivia of 20 million cubic meters (mm3/d), Torres said.
The price increase is effective from January 1 to January 31 this year, after which the price will vary monthly under a mechanism established by YPFB and the private gas producers.
Bolivia had previously threatened to cut off gas exports completely if Argentina did not agree to a price increase. However, Argentina and Bolivia reached a deal on Friday to extend supply contracts to December 2005, and the price agreement was announced Monday.
Gas exports to Argentina will increase to 6.5 million cubic meters a day (mm3/d) from 4mm3/d at present by end-2005, in line with an agreement signed in October 2004 by President Carlos Mesa and Argentina's President NÚstor Kirchner.
The proposed Gasoducto del Noreste (GNA) will add another 20mm3/d of gas exports by 2007.
Repsol YPF and Petrobras will be selling the gas to their own affiliates in Argentina, where the respective sister companies will not be permitted to pass the price increase on to industrial clients in northeastern Argentina. Repsol YPF and Petrobras will therefore have to pay the higher price of the gas themselves, newspapers reported. "The local market will not be affected by the price increase," newspapers quoted Argentina's planning minister Julio de Vido as saying.
Gas imports from Bolivia will supply the northeastern provinces of Argentina, taking some of the pressure off gas production in the south, which could in turn benefit gas supplies to Chile. Argentina has increased gas export restrictions to Chile in recent days after the government ordered more gas to be re-directed to Buenos Aires to meet rising power demand during a heat wave.
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