Petrobras Raises Gas Pipeline Investment to US$4bn

Brazil's federal energy company Petrobras (NYSE: PBR) has raised to US$4bn from US$3.2bn the amount of investment in the country's natural gas pipeline networks through 2010, local press reported.

"The company's directors met and detailed the plans for the gas sector just about 20 days ago," a Petrobras spokesperson told BNamericas.

Total investment in the gas and energy sector under the company's 2004-2010 strategic plan is pegged at US$6.1bn, the spokesperson said.

Petrobras did not detail the increase in the budget, only saying it resulted from the final construction plans, according to the spokesperson.

The project plans to add about 4,700km to the country's existing 5,600km gas transport network, mainly by linking different regions and guaranteeing the gas flow from gas-producing regions to urbanized regions. The main project is the 1,200km Gasene pipeline that links the gas-producing southeast to the energy-deficient northeast. The pipeline would have capacity to transport 20 million cubic meters a day (mcm/d) that would allow gas-fired plants to start producing power.

The US$1bn Gasene project, however, is still awaiting a preliminary environmental license from the federal environmental protection agency Ibama. The license is under analysis and has been given priority following the conclusion of the 27-day strike ended on October 26, an Ibama official told BNamericas.

Only the Campinas-Rio de Janeiro pipeline has been awarded a license. Ibama is also analyzing the gas pipelines projects in the northeast in several different stretches.

The other projects in the company's strategic plan include US$743mn investment in lines from the Urucu gas fields in the western Amazon region south to Porto Velho and east to Manaus, estimated investments of US$270mn in a 600km pipeline between Uruguaiana-Porto Alegre in the south of the country, and the Malhas project. Malhas includes a second 350km US$440mn pipeline linking São Paulo state's second largest city Campinas to Rio de Janeiro, as well as doubling the 1,270km existing pipeline network in the northeast, budgeted at US$770mn.

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