Argentina & Bolivia Delay Meeting to Discuss Gas Export Prices

A meeting scheduled for January 6 in Buenos Aires between Argentine government officials and representatives of Bolivia's incoming Morales administration to discuss raising gas export prices has been postponed to January 17, a spokesperson from Bolivia's state oil company YPFB told BNamericas.

The meeting was suspended because president-elect Evo Morales planned to attend the meeting as well, but a conflict in his agenda forced him to postpone the trip, the spokesperson said.

YPFB and other Bolivian officials were invited to the meeting by Argentina's President Néstor Kirchner.

The new hydrocarbons law in Bolivia establishes the state oil company as aggregator of natural gas export contracts, meaning it will sign agreements with gas offtakers in neighboring countries while signing back-to-back contracts with gas producers in Bolivia.

Bolivia currently exports about 7.7 million cubic meters a day (Mm3/d) of gas to Argentina at a price of US$2/MBTU. The accord was scheduled to expire at end-2005, but in July 2005 was extended through end-2006.

This price, however, is less than a fourth of what gas could fetch at international market prices, according to the Henry-Hub index, which currently values gas at US$9.22/MBTU, and Bolivia is aiming to raise gas export prices to Argentina.

"There will be no more discounted price for natural gas that Bolivia exports to Argentina," VP-elect Álvaro García, who was also scheduled to attend the meeting, was quoted as saying by local papers.

The meeting was also expected to address the proposed US$1bn Gasoducto del Nordeste Argentina (GNA) pipeline that would ship 20Mm3/d of gas initially from Bolivia's gas-rich Tarija department to northeastern Argentina and which would also satisfy demand in Paraguay and Uruguay, Argentine newspaper Ambito Financiero reported.

This project has been put on hold pending an agreement between the two countries on gas prices and a resolution to the uncertainty regarding the impact of the new hydrocarbons law on hydrocarbons investments in Bolivia.

Morales takes office January 22.

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