Commission to Complete Gas Pipeline Report by End-Nov - Bolivia, Paraguay

A bi-national commission known as Grupo Bolivia-Paraguay plans to complete by end-November a report on a proposed 600km gas pipeline connecting Bolivia and Paraguay, the energy director at Paraguay's mines and energy department, Fabio Lucantonio, told BNamericas.

The report will outline the technical, judicial, economic and environmental aspects of the cross-border project, Lucantonio said.

Local press reported the commission had 120 days to complete the report, but Lucantonio said it could be completed earlier in November.

The timeline was established on September 14 when Grupo Bolivia-Paraguay met in Paraguay's capital Asunción. Paraguay's mines and energy department head Héctor Ruiz Díaz and Bolivia's ambassador to Paraguay, Alfredo Seoane, also attended the meeting.

The pipeline would run from Bolivia's hydrocarbons rich Tarija department to Paraguay's Puerto Casado.

Paraguay would grant Bolivia a special economic zone in Casado port, some 700km from Asunción, local papers reported.

Initially the gas would mainly be used for power generation, but later it could be used in fertilizer plants, petrochemicals complexes or converted to liquefied natural gas (LNG) for export to other markets at a later stage, Lucantonio said.

Preliminary studies also include the construction of a US$65mn, liquefied petroleum gas (LPG) plant/synthetic gasoline plant in southern Bolivia that could supply Paraguay with approximately 300 tons a day (t/d) of fuel. The exact location of that project has not yet been determined, Lucantonio said, adding that the project's financing scheme is still under discussion.

Two private sector Paraguayan companies - Electrogas and Termo Asunción - have submitted proposals to Paraguay's mines and energy department and Grupo Bolivia-Paraguay for construction of the pipeline, Lucantonio said. Other companies are also interested in the project but have not yet submitted proposals, he added.

Grupo Bolivia-Paraguay would hold an international tender for the project and alternatives being considered include construction by section of the pipeline, by country or the entire pipeline, he said.

Details of the tender will be decided once the commission's report is completed and Bolivia establishes its price for the gas under the country's new hydrocarbons law approved last May, he said.

Electrogas' proposal is to import 7 million cubic meters a day (Mm3/d) of Bolivian gas to Paraguay, while Termo Asunción's is to import 44Mm3/d.

Both companies would mainly use the gas to generate from 700-5,000MW of thermoelectric power, which would then be exported to Brazil and/or Argentina, Lucantonio said, adding that these companies have been involved in PPA discussions with distribution companies.

Paraguay would export all the power generated as the country already has guaranteed supply through 2030, he said. At present Paraguay has about 7,000MW of installed capacity, with peak demand reaching only about 1,400MW.

Bolivia has the second largest gas reserves in South America of over 50 trillion cubic feet. Paraguay's mines and energy department is part of the public works and communications ministry.

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